Shares in Ires Reit slid almost 5 per cent on Friday as the board saw off an attempted boardroom coup by activist investor Vision Capital at an extraordinary general meeting (egm) – dampening speculation that the company behind 3,734 apartments and houses may be put up for sale as a whole or in lots. For now, at least.
But the head of the Toronto-based investment group, Jeffrey Olin, set off for Dublin Airport on Friday afternoon knowing he has a good chance of still winning a war that has been waged openly between both sides for the past 10 months, after he failed to convince the company behind closed doors to go down the road of a sale or break-up.
Ires’s incoming chairman Hugh Scott-Barrett, who takes charge after the company reports full-year results next week, told reporters after the showdown egm that he aims to give investors a “substantive update” by early May on a strategic review that the board has pledged to carry out.
Unlike a “review of strategy” carried out in private by Ires in 2022 at the behest of Vision Capital – which resulted in the maintenance of the status quo – the “strategic review” to which the board is now signed up will play out under the full gaze of investors.
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It will look, as Ires puts it, at a “full range of strategic options” to maximise value for shareholders, including consolidation, mergers, a review of the company as a listed Reit, the sale of the company or disposal of its assets. The board will settle down to business knowing that 40 per cent of investors who voted at the egm on Friday cast ballots in favour of the sale proposal put forward by Olin.
The other three Irish reits that listed on the market over the past decade or so – Green, Hibernia and Yew Grove – have since been bought out at values equating to or exceeding their net asset values. But the jury is out on whether a disposal of Ires or its properties could bridge the gap between where the stock is currently trading, at €1.04, and its underlying net tangible asset value, put at €1.48 per share by Ires as of last June. There has been a spike in interest rates since the last of the other reits was bought out, in June 2022.
A shareholder argued at the egm that Ireland was in the middle of a “hot” residential property market (residential prices rose by almost 3 per cent nationally in the 12 months to November, according to the latest Central Statistics Office data). However, outgoing chairman Declan Moylan highlighted that the market for blocks of occupied apartments “is anything but hot”.
While central banks are expected to ease official rate this year, rents in so-called pressure zones are currently capped at 2 per cent, and there are also concerns among institutional property investors about potential policy changes following the next general election.
For now, Ires and Vision Capital each committed after the egm – which involved heated exchanges between Olin and Moylan – to engaging “constructively” with the other.
Olin indicated to The Irish Times on Friday afternoon what he sees as a first step. “Forty per cent of shareholders [who voted] share our view. It is appropriate that they have representation on the board,” he said.
Ires currently has a nine-person board. “I hope that [Ires[ are sincere about their commitment to engage with us constructively. We take them at face value.”
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