Ireland’s largest private landlord says it has made “significant progress” in advancing initiatives identified by a recent strategic review, including the sale of dozens of properties that are expected to generate total gross sales proceeds of up to €37 million by the end of next year.
Ires Reit said in a trading statement on Friday for the three months to September 30th that it had completed the disposal of 37 units – part of its target of 315 units.
The company said it sold 20 assets “in line with book value” in a bulk sale, and sold a further 17 units to individual purchasers, achieving sales premiums of 25 per cent.
The group also completed the investment sale of 25 units outside of the 315-unit programme, also in line with book values. The company said it expects to complete the disposal of at least a further 50 units in 2025, at an average sales premium of between 15 per cent and 20 per cent.
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In total, these disposals are expected to generate total gross sales proceeds of between €35 million and €37 million, the group said.
In a long-awaited strategic review, Ires Reit in August ruled out a substantive sale of the group or its assets after months of boardroom tension over the future of the company. However, the board committed to a “capital recycling programme”, which it said would include the disposal of 315 apartments over a three- to five-year period, about 8 per cent of its total portfolio. This was expected to generate between €110 million and €115 million.
“Based on the initial success of the programme, the company is actively reviewing how best to accelerate and increase the scale of the programme where value for shareholders can be achieved in line with strategic objectives and good asset management,” Ires Reit said.
The company is also in the early stages of implementing additional income generating and cost reduction initiatives identified in the strategic review. It said it has successfully executed initiatives across about 4 per cent of its portfolio, with an expected annualised net rental income increase of 8-10 per cent for these units.
Ires said it has now completed a “strategic exit” from the Cork market. “This is an important step towards improving cost structures and margins,” it said. “Focusing on the Greater Dublin Area maximises efficiencies and the future operating leverage of the group.”
Chief executive Eddie Byrne said he was “pleased to report strong progress with our strategic review initiatives and are encouraged by the positive momentum of the business. The execution of our recycling programme is ahead of our expected time frame and will further strengthen our financial position,” he added.
“While we will continue to consider all opportunities to enhance shareholder value, we are confident about the long-term market opportunity which is underpinned by our high-quality portfolio and market leading operating platform.”
Occupancy levels across the group’s portfolio continue to remain strong, standing at 99.4 per cent at the end of the quarter. The group said the figure reflected “the exceptional demand for rental properties in Dublin”.
It said it remains “on course” to deliver a full-year 2024 net rental income margin broadly in line with the margin reported in the first half of the year (76.5 per cent), which includes the impact of the disposals completed during the year. The company said it remains “in a strong financial position, underpinned by a robust balance sheet”.
Reflecting the impact of the disposals, portfolio loan-to-value has fallen to 45 per cent as of Thursday, down from 45.4 per cent at the end of June, and below the 50 per cent limit set out by the company’s debt covenants and legislation.
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