IRES sell off downplayed in review update

A sell off of Irish Residential REIT’s portfolio is looking less likely as its strategic review outlines a range of revenue-generating options. The firm said analysis of options to maximise value for shareholders completed to date confirmed the board’s view that the company’s investment case was “underpinned by a modern portfolio of high-quality residential assets in attractive growth locations” and that it had a “market-leading platform which continues to deliver a strong operational performance”. The board added that it believed the medium-term outlook for its market and its assets was positive, with expected population growth continuing to drive increased PRS demand considerably above the current level of supply. IRES said any “accelerated sale” of its assets would be challenging because of current market dynamics and a low volume of liquidity. It added that it had also not received any offers for the company but would continue to consider a potential sale as part of the ongoing review. The review has identified several initiatives with the potential to unlock the inherent value contained within the IRES operating platform, however. These include further potential of revenue generation from car parking and “value maximisation” through selective asset recycling of individual units which are accretive to value. The company said it had conducted extensive tax analysis as part of the review, including a review of the REIT structure. While it found that the Irish REIT structure provided liquidity and tax efficiency, it noted that certain elements of the Irish REIT framework remain restrictive. IRES said its focus remained on “operational efficiency initiatives and recycling capital” and that it remained “open minded to all value maximising options”.