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Canada’s Capreit sells remaining shares in Irish property group Ires

Capreit offloads its remaining 9.7% stake in the Ireland’s biggest private landlord

Canadian investor Capreit has sold its remaining shares in Irish property investment company Ires Reit

Joe Brennan
Wed Jun 19 2024 - 18:28

Ires Reit’s Canadian founder, property investment firm Capreit, has sold is remaining 9.7 per cent stake in the Republic’s largest private residential landlord, according to stock exchange filings.

The move comes as the Irish property company continues a strategic review, having entered into a truce in April with Vision Capital, a Canadian investor with a 5 per cent stake that had been waging a public campaign for a year for a sale or break-up of the company.

Vision has secured two board seats as part of the settlement.

Capreit, which assembled Ires’s initial portfolio of 338 apartments and managed its initial public offering (IPO) in 2014, started reducing its then 18.7 per cent stake in the Dublin-based company in February. It was not immediately clear on Wednesday evening who had purchased the stock.

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The Canadian group had backed failed efforts by Vision in February to replace five Ires directors and secure a mandate from shareholders to pursue a sale or break-up of the company, which now has 3,734 residential units, within two years.

Capreit earned almost €50 million in asset and property management fees from Ires between the IPO and a move by the Irish company to bring management in-house two years ago.

Real estate investment trusts such as Ires are typically set up with the founding property company managing the underlying assets by contract through a fund management vehicle.

The Irish Times reported in February that Capreit had sought a significant rise in potential fees from Ires in talks in late 2020 to extend an asset management contract, before the company decided to internalise management of the portfolio.

Ires Reit’s strategic review started at the end of February and is now being led by its new chairman Hugh Scott-Barrett and chief executive Eddie Byrne. The company said in late April that a move to sell all the apartment owner’s assets in the current environment “would be challenging to maximise value for shareholders in the short-term”, as it continues to carry out a strategic review of its future and its shares continue to trade at a deep discount.

While the board said it believes the medium-term outlook for the Irish private rental sector (PRS) “is positive”, it continues to be affected by short-term headwinds such as higher interest rates, restrictive regulation including on rent increases, a lack of deals activity, and concerns about the upcoming general election.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times

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