IRES REIT

cooperguy

What are peoples opinion on IRES as a mechanism for getting exposure to the property market? A good option for property investing without the hassle of tenants?

newacc2015

Their PE is massive relative to other Irish REITs. They are very residential AFAIK which means they are quite limited in scope for rent increases, so is commerical. But rules for rent hikes are less restrictive. You don't see much development by them. Where as Green and Hibernia are mad for redeveloping.

I personally think Green is the best of the REITs. They are actually developing decent properties such as the industrial estate beside the airport

I get the impression that IRES have just brought a ton of distressed property and their vision of growth is not as ambitious as say Green.

1st dalkey dalkey

I think they are part owned by a Canadian company, CAPReit (Canadian Apartment Properties Reit).

They run to a particular business model in Canada, and very successfully.

If they can repeat their success here through Ires, it could be a good bet.

There are differences, though, in the political, legal and financial environment which may make it more difficult to implement their model here.

In the short term the danger is stricter rent controls. In the longer term it is the political attitude to housing provision.

Will future governments get involved in direct housing provision as they did in the past with Local Authority housing?

philippoc93

Don't forget the 4% cap that just came in on rental properties. I think 1st dalkey is speaking about it above, but thought I'd be explicit. Has to be a major blocker on their growth over the next three years.

ABC101

Indeed... 4% a year rental increase... however if I am correct, rent can only be increased every 27 months (24 months + 3 months notice).
Which works out at 1.77% rental increase on average / year.
Assuming my sums / interpretation is correct?

AlmightyCushion

ABC101 wrote: »

Indeed... 4% a year rental increase... however if I am correct, rent can only be increased every 27 months (24 months + 3 months notice).
Which works out at 1.77% rental increase on average / year.
Assuming my sums / interpretation is correct?

Nope, the 2 year limit on rent increases is gone, it's now only 1 year. You could be correct about the extra 3 months though..

ABC101

AlmightyCushion wrote: »

ABC101 wrote: »

Indeed... 4% a year rental increase... however if I am correct, rent can only be increased every 27 months (24 months + 3 months notice).
Which works out at 1.77% rental increase on average / year.
Assuming my sums / interpretation is correct?

Nope, the 2 year limit on rent increases is gone, it's now only 1 year. You could be correct about the extra 3 months though..

O.k. that is interesting.....
I'm a bit surprised that they allowed 4% rise / year.   I would have thought they would go for average national inflation rate.
For a Tenant.... 4% rise is a bit on the steep side IMO.

newacc2015

ABC101 wrote: »

O.k. that is interesting.....
I'm a bit surprised that they allowed 4% rise / year.   I would have thought they would go for average national inflation rate.
For a Tenant.... 4% rise is a bit on the steep side IMO.

There is no inflation at the moment. If you were going to link rents to inflation, I imagine you would have had a mass exodus of landlords. If a tenant moved in at €800 per month in the middle of the recession and had not got a rent increase since. The rent control was introduced, you have a tenant living there at €800 (about €500 below market rate) and no increases in sight. If I was that landlord, that tenant would be evicted and the property sold. There be tens of thousands of landlords with the same attitude.

4% is not steep at all. Irish wage growth is quite strong. In Germany, where wages are flat. Rents are increasing by about 4% per year. It was so wrong capping rents at 4% when the Government ad hoc changes landlord tax policies.

techman1

https://www.irishtimes.com/business/2023/04/15/could-countrys-biggest-landlord-be-put-up-for-sale/

I see some of IRES reit institutional shareholders not happy with the board of IRES , they are going to vote against the re appointment of Margaret sweeney as ceo and other board members. They want to take Ires private in order to realize the full value of its property portfolio

tesla_newbie

https://www.boards.ie/discussion/comment/120543425#Comment_120543425

I’ve voted by proxy through my broker , voted to oppose Sweeney being re-elected, she’s been a dismal failure

techman1

https://www.boards.ie/discussion/comment/120549883#Comment_120549883

But it also said in the article that the likelihood of the revolt against the board succeeding is not great. Most of the shareholders in ires are institutional investors ,but why would institutional investors vote in favour of re electing the board , surely it is in all shareholders interests that the board be voted out and the option of taking ires private be taken up?

tesla_newbie

https://www.boards.ie/discussion/comment/120550283#Comment_120550283

Pension funds take a very long term investment view, very different to activists like vision capital , they probably think ousting the board would result in instability

techman1

https://www.boards.ie/discussion/comment/120550630#Comment_120550630

but the original investor that started Ires, CapReit of Canada tried to sell its stake in Ires last year surely they would be in favour of taking it private and getting their capital back out?