Irish Life is preparing its first incursion into the Irish residential property market. The pensions and fund manager has indicated it is at an "advanced" stage of entering the build-to-rent market with an announcement expected over the coming year.
Patrick Burke, managing director of Irish Life Investment Managers (ILIM), said that the company is "very interested" in entering the residential investment market, and would likely look to develop such a project itself, in conjunction with some partners. While he would not disclose the size of the likely investment, it's expected to be significant.
Such a move could see the life company follow in the footsteps of other institutional investors, such as Ires Reit and Kennedy Wilson, by entering the build-to-rent market via the construction of an apartment block or student accommodation.
‘Right investment’
Mr Burke said that Irish Life would have to first acquire the land, and did not rule out a development outside of Dublin provided that “it was the right investment opportunity”.
Meanwhile the life company, which has some €82.7 billion in assets and 1.3 million customers, is also gearing up for a significant business boost on the back of auto-enrolment. The Government is expected to compel employees to take out a private pension over the coming year, following the example set by New Zealand, Australia and the UK. Given that less than one in two adults in Ireland are currently members of a private pension, the opportunity for pension providers such as Irish Life could be vast.
David Harney, chief executive of the Great-West Lifeco owned group, said Irish Life is "very keen" to play a pivotal role in the creation of a new auto-enrolment product, which could be designed around a PRSA or trust structure, noting that it would in effect "double the market". However, he added that given that savers would be starting off with zero balances and low contributions, it wouldn't lead to hefty "profit gains" initially.
The average size of an Irish Life member’s defined contribution plan is currently of the order of about €120,000, and will give an income in retirement of just 18 per cent of salary.
Health insurance
Consumers have seen steady rises in health insurance premiums in recent years, and Irish Life did not rule out further hikes over the coming year.
Jim Dowdall, managing director of Irish Life Health, said that while the insurer has "no plans to increase premiums at this stage", he does foresee a "relatively small increase" on the back of factors such as continuing medical inflation.
Mr Dowdall said that Irish Life is not considering a foray into private hospital ownership. Late last year it was disclosed that State-owned health insurer VHI is thought to be looking at acquiring or buying into private hospitals. Irish Life has a relationship with primary care provider Affidea, and Mr Dowdall doesn’t expect the insurer to move beyond this.
