IRES Reit's pre-tax profits up over 50%...
IRES Reit's strong financial results for 2016 show that the country’s largest landlord has been benefitting from the unprecedented rent increases reported early this week.
Net rental income rose by 50% to €30.6m for the year to December, though the company did acquire or bring on stream more than 700 new apartment units during that period.
Pre-tax profits rose by just over 50% to €47m
Average monthly rental income increased by 8.6%, with IRES pointing out that many of its properties were covered by the two-year rental cap last year and will see rents rise in the current year.
Occupancy rates were at a very strong 98.8%.
The specialist investment vehicle was listed on the Irish stock market in 2014.
Basing itself on the successful Canadian model of its largest shareholder, CAP Reit, IRES has become the country’s largest landlord in that short three-year period with just under 2,400 apartments at the end of last year – all in the Greater Dublin Area.
IRES not only acquires large apartment blocks, it is also building or renovating blocks on its own behalf, including 460 units in three tower blocks in Sandyford.
It was recently required by Dún Laoghaire - Rathdown County Council to reduce the height and number planned there but IRES has said that this won’t affect yield significantly as the lower potential rental income will be offset by lower construction costs.
The company has a strong balance sheet and says it plans to continue growing its portfolio of rental properties – even within the context of the new 4% rental cap in our major cities.
According to Daft.ie's latest quarterly rental report, rents rose by an average of 13.5% in the year to December 2016.
This is the largest annual increase in rents ever recorded by the property website, which has been reporting on it since 2002.
In Dublin, the annual rate of rent inflation was 14.5%, the second highest rate on record since 2002. Rents in the capital are now 13.7% higher than their previous peak in early 2008 – or an average of almost €200 a month.