Ires Reit, which owns 4,000 homes in the Republic, said its revenue grew 4.9 per cent in the first quarter and that it “remains well positioned” to deal with challenges facing the sector, even as a group of dissident shareholders plot to lead a revolt against management and directors at its annual general meeting (agm) on Thursday.
The Republic’s largest private residential landlord said in a trading statement on Wednesday that its occupancy levels and rent collections remained high, with both topping 99 per cent in the first three months of the year.
The company highlighted that it raised €18 million of gross proceeds from asset sales, including its Rockbrook development site in Sandyford, Dublin 18, which has planning permission for more than 400 apartments.
This helped lower the loan-to-value ratio on its portfolio marginally to 43.1 per cent to 43.3 per cent at the end of last year – compared to a 50 per cent limit under Irish Reit legislation and the company’s own lending covenants.
Canadian activist investor Vision Capital has been waging an open battle against Ires for the past three weeks, after Ires resisted its calls, initially made in private, to put itself up for sale as its stock has traded consistently at a discount to the value it puts on its assets.
Vision, which owns 5 per cent of the company, has enlisted the support of Ires’ founder, Toronto-based property group Capreit, which has an 18.7 per cent stake, and a number of other investors as it seeks to thwart the re-election of the Irish company’s chief executive Margaret Sweeney, chairman Declan Moylan and a number of other directors at the agm in Dublin.
Vision last week took aim at Ires’ plans to sell its upmarket Marker apartment block in Dublin’s docklands to lower its debt burden, saying asset disposals should be halted until “a clear, longer-term strategy that benefits from shareholder-aligned board of directors representation is advanced and communicated”.
Ires has been in talks to sell the block to Irish Life Investment Managers, with a price tag of about €70 million.
It is estimated that about 30 per cent of shareholders have signalled their intention to back Vision’s stance in advance of the agm.
Even if management and board members secure enough general support at the agm, Vision has threatened to follow up with a call on the company to hold an extraordinary general meeting (egm) on selling the company.
Calling an egm under Irish company law requires the agreement of the owners of just 10 per cent of a company’s share capital.
“The macroeconomic environment of rising interest rates and inflation continues to weigh heavily on listed real estate company valuations,” said Ms Sweeney in the trading statement. “However, Ires remains well positioned to navigate this with our high-quality portfolio, disciplined capital allocation and successful execution on its strategy, delivering consistent returns to our shareholders over the long-term.”
Shares in Ires have rallied from an all-time low of 93 cents last month to 1.03 cents as of early trading on Wednesday morning. However, it continues to change hands at a 36 per cent discount to its net asset value.
“Overall, it was encouraging to see the strength of Ires’ operational performance, yet again, in this trading update for first-quarter 2023. However, this has to be expected given the continued dearth of supply in the Irish residential lettings market and attractiveness of Ires’ modern portfolio,” said Goodbody Stockbrokers analyst Colm Lauder.
