Commercial Property

Mixed fortunes for Ireland's biggest private landlords

Cantillon: Kennedy Wilson’s take slips as Ires Reit reaps healthy revenues from Irish units

The Capital Dock building on Sir John Rogerson’s Quay in Dublin’s docklands. It was just 56 per cent let at the end of June. Photograph: Dara Mac Donaill

Sat Aug 7 2021 - 05:07

The State’s two biggest private landlords published trading updates this week, though with slightly different outcomes.

Kennedy Wilson was first out on Wednesday night. The US investment group had 2,067 units generating revenue here at the end of June. The results show that its occupancy rate declined by 4.6 percentage points to 92.2 per cent for the first six months of the year, while its revenue in the period fell by 4 per cent to $13.7 million (€11.5 million using its own exchange rate). The average rent was just over $1,100.

Kennedy Wilson’s results also state that Capital Dock, the tallest residential block in Dublin with 190 high-end apartments, was just 56 per cent let, three years after construction was completed on the 4.8 acre site. The pandemic and the mass migration of office workers from the city centre won’t have helped.

Rent of €1,641

Dublin-listed Ires Reit, meanwhile, returned to the black in the first half of the year, posting a profit of €27.4 million.

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Its average rent was up 1 per cent year on year to €1,641 across its 3,836 units. And while existing tenants were not hit with rent rises, 10 per cent of the units were turned in the period, with the “majority of the units” having their rents increased by 4 per cent, the maximum allowed.

Occupancy rose to 98.6 per cent from 97.9 per cent a year earlier, and it collected 99 per cent of its rents, on par with 2019.

Rent pressure zones

The value of its portfolio rose by 5.6 per cent to just under €1.5 billion. Interestingly, the Government’s decision in May to increase the rate of stamp duty on the multiple purchase of 10 or more family houses caused a one-off reduction in the value of Ires’s portfolio at the end of June of €8.6 million.

Ires also noted that the decision in July to link increases in rent pressure zones to inflation, rather than the current 4 per cent cap, could lead to “lower rent increases in line with general inflation”.

This might not bring much relief to tenants if the anecdotal evidence of post-pandemic price inflation becomes a reality.

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