The chief executive of Ireland’s largest residential landlord has said it does not want to see rents “shooting up” if the Government scraps the rent pressure zones (RPZ) regime but believes the Coalition must arrive at a more “balanced” policy that supports investment and tenants.
Eddie Byrne, chief executive of Ires Reit, told The Irish Times on Thursday that the sector must give the new Coalition “space to do its research and consultation” and to “come up with the right answers”.
His comments come after Taoiseach Micheál Martin signalled in early February that the rent cap system may be changed, or even removed, this year. The Fianna Fáil leader’s remarks sent shares in Ires to their highest level in eight months.
Analysts say the rent cap has contributed – along with a surge in interest rates – to the underperformance of Ires’s shares in recent years.
On Thursday, Mr Byrne, a former Anglo Irish Bank executive who was appointed to the top role at Ires last year amid boardroom upheaval, said the new Coalition’s policy should be “about getting the balance right” between investors and tenants.
“Just to be clear, as a business, we support regulation,” he said.
“There was a lot of comment about the Government tearing up the RPZs and rent levels shooting up. That’s absolutely not something we would support. We believe there is a place for regulation and for steady growth.”
Asked, however, whether he was pleased by the composition of the new Coalition and its attitude towards the private rented sector, Mr Byrne said: “We have said for a long time that the balance in rent regulation needs to be looked at. I think that’s all that the Government has said: that they also believe there needs to be a balance between protecting tenants and encouraging investors.
“So, if that’s pleased, then the answer is yes because that’s something we have been saying needs to be looked at.”
Mr Byrne was speaking following the publication of full-year results for Ires, which saw a return to growth in its earnings in 2024 as a strategic review started to yield results.
However, the State’s largest residential landlord recorded a loss before tax of €6.7 million for the whole of 2024. That was attributed to a yield expansion of around 20 basis points (0.2 per cent) in the first half of the year that saw a non-cash fair value reduction for the year of €33.7 million.
Like-for-like revenue growth was 1.7 per cent for the year, with organic rental increases and ancillary revenue from new initiatives contributing.
Reported revenue for the period was €85.3 million, down almost 3 per cent year on year due to the impact of disposals the company has committed to placate disgruntled investors.
Earnings growth for the year was 1.4 per cent, with adjusted EPRA earnings – a measure of the underlying operating performance of an investment property company that excludes fair value gains, property disposals and other noncore items – of €28.9 million. That was slightly higher than the €28.5 million it recorded in 2023.
Ires said its portfolio was effectively fully occupied at 99.4 per cent at the end of the year, reflecting strong underlying demand for rental properties in Dublin.
The company’s portfolio is worth an estimated €1.23 billion, down slightly from 2023 as asset disposals and a fair value reduction more than offset positive net rental growth.
Net rental income margin was down to 76.8 per cent from 77.3 per cent in the previous year.
Ires Reit was hit by non-recurring costs of €3.4 million during the year, mainly related to shareholder activism and its strategic review. The company had been fighting opposition from Vision Capital, which wanted to oust much of the board and break up the business.
But financing costs fell amid declining global interest rates and the deployment of disposal proceeds to reduce variable debt. The property group is now planning a share buyback programme.
In a statement, Mr Byrne said 2024 was a year of “solid progress” for the company.
“Following the conclusion of our strategic review in August, we delivered improvements across key performance metrics, including achieving earnings growth in 2024.
“Our ongoing asset recycling programme remains a key value driver, delivering strong sales premiums, improving portfolio composition, and providing us with excess capital to deploy against our menu of accretive growth options, including through the share buyback programme which we intend to launch shortly,” he said.
“Looking ahead, our clear focus is to maximise value for shareholders through the implementation of our strategic initiatives. We will also continue to engage constructively and consistently with Government as it reviews the rental regulations.”
The board will declare a dividend of 2.2 cent per share for the six months to the end of December last, bringing the total dividend for 2024 to 4.08 cent per share.
