They’re not yet built, but already Ires Reit is fielding calls for its first construction project of 68 apartments in Sandyford, further highlighting the tightness of today’s rental market.

The Maple, a development of four one-bed, 55 two-bed and nine three-bed apartments adjacent to Beacon South Quarter in Sandyford, south Dublin, won’t be completed until next July. According to Ires Reit chief executive David Ehrlich, however, the property investment company is already taking calls from interested tenants wishing to put down a deposit.

“It’s further evidence of the supply and demand imbalance,” he says, adding that the fund is not yet accepting deposits but will kick off a marketing campaign for the development in the new year. In the meantime, prospective tenants can register their interest on the company’s website.

‘Great market’

Ires Reit, Ireland’s largest residential landlord, with a portfolio of some 2,377 apartments, has benefited significantly from rocketing rents, which recently reached a new historic peak.

“It’s a great market,” Ehrlich agrees, “We’ve never seen rental increases like this in any jurisdiction that we’re aware of”.

The fund is hoping to bring its stock up to 5,000 by constructing its own developments, and in addition to the Maple has applied for planning permission for about 500 apartments at nearby Rockbrook in Sandyford.

It’s also considering the construction of townhouses, something its Canadian investor, Capreit, has had success with in Canada, as well as student housing in Sandyford. Something for retirees is also a possibility, but high occupancy rates are likely to preclude this in the short term.

“The problem is we could do that with one development or part of one, but we’ve so much demand . . . we’re 99 per cent occupied, so we have very few vacant suites to do that with,” says Ehrlich, adding that such a development would need facilities such a concierge, common areas for card games, buses to local shopping centres, etc.

Nama development

Ires Reit is also in the market to buy existing blocks that come on the market.

According to Mr Ehrlich, it’s eyeing up the Grange in Stillorgan, south Dublin, completed by the National Asset Management Agency.

“We have been waiting for that to come to market. It’s a beautiful development, so we’ll see what the price is on it,” he says, expecting that the bidding process will be “competitive”.

Ires Reit has reported annual rental increases of about 10 per cent since it launched in Ireland in 2014, and with about 70 per cent of its portfolio up for review under the two-year rule next year (10 per cent in the first quarter), further rent increases are likely.

“I expect they will [ie rents will increase], but I don’t want to speculate [by how much],” Ehrlich says.

Not all of Ires Reit’s portfolio is subject to the two-year rule, with 25 per cent of the investment company’s apartments turning over after a year. It’s less than the 35 per cent reported in Canada but significant nonetheless, given the dominance of Dublin in relation to the rest of the country.

“We’ve been surprised at the number. We’re not sure why that’s happening; we thought it would be less,” Mr Ehrlich says. See full interview: page 4