Dublin’s largest landlord of privately rented accommodation, Irish Residential Properties REIT (IRes), has cut its interim dividend due to the impact of costs associated with the internalisation of its external property management company.

The public company said it expects to return to its 'stable and progressive dividend policy' at year end.

I-Res reported revenue growth of 6.7% for H1, up to €42.1m, and a net profit of €22.9m, down from €27.4m.

This means the company is extracting a net profit of over 50% from its tenants.

The company owns 4,000 rented residential units, and average rent achieved was €1,690 per month.

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In South Dublin, the average rent at I-Res apartments currently runs to €1,840 per month.

In the H1 period, IRes acquired 108 dwelling units at Ashbrook in Clontarf and completed 61 units at The School Yard. It has targeted a development of 69 units at Tara View for acquisition and is to sell 128 units at Hampton Wood.

Chief executive Margaret Sweeney said: “Occupancy grew to 99.3%, demonstrating strong market demand for our high-quality professionally managed apartments.

“Housing in Ireland remains challenging, primarily due to a significant lack of supply, and so we are pleased to be adding much-needed new homes to the market. We also expect to close on a further 69 new homes in the Tara View development shortly.

“As at 30 June 2022, the valuation of our assets was €1,550m, at a gross yield at fair value of 5.6% and stable relative to 31 December 2021 valuation. This was an increase of €59m for the 6 months due to new investment and capital expenditure on the existing portfolio. There was a c.€9m uplift in the fair value of the total asset base with a significant element of this driven by our new School Yard development.”

IRes claims that its average rent for the entire portfolio is running at about 10% below market rates nationally, and in Dublin about 16% below the Residential Tenancies Board’s recent quarterly index.

This was largely due to the capping of rent increases at 2% annually in Rent Pressure Zones under 2021 legislation, so the increased rental growth in the half-year is down to new schemes coming online at market prices, and renewals capped as per the legislation.

Sweeney added: "We continue to see strong fundamentals due to low availability and strong demand for high quality rental accommodation in the Irish market driven by a rising population and strong employment.”