Ires net loss widens amid higher interest rates

Ireland’s largest private-sector landlord sold €96.5m of property last year to help keep its debt burden under Reit limit of 50%

Ires Reit, the apartment owner that has been the subject of a public campaign by an activist investor since last April, saw its net loss widen last year as it took a €141.8 million charge against the value of its property portfolio amid heightened interest rates.

The Dublin-listed company’s loss for the year amounted to €116 million, up from a shortfall of €11.8 million in 2022, when it weathered an initial €45.6 million hit against the value of its apartments and houses as central bank and market interest rates started to soar following an era of ultra-cheap credit.

Adding in €96.5 million of property disposals last year – including a development site in Sandyford in south Dublin and almost 200 residential units in west Dublin to a housing association – in an effort to lower its debt burden, the total value of Ires’s assets fell to €1.27 billion in December from €1.5 billion a year earlier.

The loan-to-value ratio on the portfolio stood at 44.3 per cent at the end of last year, up from 43.3 per cent a year earlier, but below the maximum 50 per cent allowed under Irish real-estate investment trusts (reits) rules.


The company’s net asset value per share fell to just below €1.32 from €1.60, but remains well above the level of about €1 at which the shares were trading on Friday.

The discount at which Ires has been trading in recent times has been one of the main reasons why 5 per cent shareholder Vision Capital has waged a campaign for the Dublin-listed public company to put itself up for sale or dispose of its assets, mainly comprised of 3,374 apartments and houses.

Toronto-based Vision failed to secure enough backing at an extraordinary general meeting (egm) last week to replace five directors, including Ires’s outgoing chairman Declan Moylan and chief executive Margaret Sweeney. Nor did it get enough support to push through a resolution calling on Ires to pursue a sale or break-up of the business within two years.

Still, the pressure from Vision – which secured about 40 per cent support for most of its resolutions – led to Ires committing in early January to carrying out a strategic review. It has pledged to look at a “full range of strategic options” to maximise value for shareholders, including consolidation, mergers, a review of the company as a listed Reit and the sale of the company or disposal of its assets.

The review will now commence, led by a committee under newly-appointed chairman Hugh Scott-Barrett. It will be supported by property advisory firm Savills and Ires’s existing international financial advisers, known to include investment bank Rothschild, and brokers.

“The board plans to provide shareholders with a substantive update on the progress of the review in advance of the company’s [annual general meeting] to be held in May 2024,” it said.

Ires said last week it would “engage constructively” with Vision. The head of Vision, Jeffrey Olin, told The Irish Times after the egm that he would push for board seats commensurate with the 40 per cent level of support most of his resolutions achieved.

Meanwhile, Ires’s founding shareholder, Canadian property group Capreit, has continued to drip-feed shares in the company into the market since the egm. Capreit had voted in line with Vision on the resolutions. Capreit’s stake now stands at 17.2 per cent, down from 18.7 per cent when it started to sell shares last month.

Recent shareholder dissent has taken the focus off Ires’s operational performance, which continued to be strong last year. Occupancy levels across its properties stood at 99.4 per cent in December, while the company increased its revenues by 3.5 per cent to €87.9 million, driven by the full-year impact of new supply in 2022 and organic rental growth across the portfolio.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times