Ireland's Biggest Landlord 'Well Placed' To Ride Out Inflation Storm

The chief executive of Ireland's biggest landlord has said that it is “in good shape” to cope with the twin pressures of inflation and higher interest rates as it revealed 6.7% revenue growth in 2021.

Ires Reit chief executive Margaret Sweeney told Bisnow that internalising processes previously provided by Canada’s Capreit as well as investing in new technology will “deliver long term value for shareholders” and help overcome inflationary issues which could rear their head during 2022. 

“So inflation was running at 5.5% in December, becoming much more a feature now than it would have been over the last 10 years," Sweeney said. "So everyone's talking about the cost of living, in particular with energy costs. Integration in relation to operating costs will allow us to achieve more economies of scale and efficiencies to manage risk."

She also pointed to the potential rise in interest rates that could be precipitated by inflation.

“I think our balance sheet is in good shape," she said. "It was in good shape coming into 2020 with Covid-19 with good liquidity and long maturity on our debts. About 30% of our debt is hedged fully, and the maturities range from 2026 to 2032.”

Ires owns and manages just over 3,800 homes in Dublin and Cork with a portfolio value of  €1.5B as of 31 December 2021. The chief executive refused to disclose where its next targets lay, except to say that Ires is focussing on multiple investment strategies from acquisitions to forward purchase contracts. 

Deals competed during the year included 146 homes at Phoenix Park Racecourse in January 2021, 152 homes in Ashbrook, Clontarf last month and the forthcoming delivery of 130 new apartments this year at the Bakers Yard scheme.

Ires has managed to maintain rental occupancy levels at 99.1% for the year to 31 December with rent collections at 99.2%. The REIT took ownership of 146 residential properties over the past twelve months.

It stated that adjusted EPRA Earnings increased by 1.9% to €37.0M. 

Sweeney noted that the REIT has an average property age of only eight to 12 years, with an ESG rating of C, which she said would help insulate its tenants against rising energy costs.

“We should be able to try and achieve economies of scale and hopefully do a sharing of benefits with the tenants around energy provision, totally as a way to try and manage that cost pressure that's going to come across everyone on energy costs going forward," she said.