Irish Residential Properties Reit (Ires Reit), the largest private owner of apartments in the State, is in talks to acquire land to build duplex townhouses to take advantage of rising demand for homes in the city, according to its chief executive.
Speaking to reporters after Ires Reit’s annual general meeting in Dublin on Tuesday, chief executive David Ehrlich he is “actively looking at sites” both inside and outside the M50 motorway in Dublin. However, he said many private equity firms that snapped up land during the financial crisis as well as private owners of suitable sites are “just sitting on sites” and unprepared to sell.
Mr Ehrlich told shareholders that he was “tired of us being called a vulture fund”.
“There is nothing wrong with vulture funds,” he said. “They perform a valuable service when banks need to unload a lot of debt off their books. But we are the opposite of a vulture fund. We are in Ireland for the very, very long term.”
Mr Ehrlich also said that Ires Reit, which owns almost 2,400 apartments in greater Dublin, has plans to build 600 apartments in the city, including a scheme of 467 apartments at Rockbrook in Sandyford.
It is currently appealing a decision by Dún Laoghaire-Rathdown County Council in April to refuse permission for the development.
Mr Ehrlich said there is often a “disconnect” between the Government’s desire for more homes to be built and the attitude of some county councils to developers’ plans.
He also criticised aspect of planning laws for apartments – including requirements that half of such homes have “dual aspect” windows offering two different views, as well as parking and density rules – which are adding to the cost of development.
Ires Reit, an offshoot of Canadian investment group Capreit, first got involved in the Irish market in 2014 through Capreit’s purchase of 338 apartments in Smithfield, Inchicore, Sandyford and Tallaght for €42.2 million from Lloyds Banking Group as the lender retreated from the Republic.
The group floated Ires Reit the same year in a deal that raised €200 million. It tapped investors for a further €215 million a year later. CapReit continues to own 15.7 per cent of the Dublin-listed company.
Ires Reit is also currently looking at the potential of investing in Cork, Mr Ehrlich told shareholders at the AGM. However, he indicated that the company would need a minimum of 400 apartments in the State’s second-largest city and a higher potential return than on offer in Dublin to justify such a move.
He revealed that the first apartment complex being developed by Ires Reit, comprising 68 new rental homes that are due for completion in July, will generate a gross yield of between 8.5 per cent and 9 per cent. The Irish Times reported last month that two-bedroom apartments at The Maples development in Sandyford are set to rent from €2,570, setting a possible new record for the area.
