Irish Residential Properties (I-RES), the country's largest private residential landlord, reported a slight decline in revenue for the first half of the year.

Revenues decreased 0.4 per cent to €42.6m despite average rents increasing by 1.5 per cent to €1,823 since the same period last year.

Net rent income for the period of €33.3m increased by 1.6 per cent versus the same period last year. Net rental income (NRI) margin increased 150 bps to 78 per cent as I-RES continue to manage costs and improve operating efficiency.

I-RES sold approximately two per cent of its portfolio (16 units) at around 25 per cent above market value during the six-month period.

Adjusted earnings excluding fair value movements grew 9.5 per cent to €16m, reflecting those property sales, which generated total gross proceeds of €6.6m and €1.5m in gains versus book value.

As of the end of June, I-RES had a further 16 units up for sale and has since completed the disposal of four additional units while signing contracts on another two units.

The company remains on track to sell 50 units in 2025 at an average premium of 20 per cent, up from the previous expectation of 15 per cent. The group has a three to five-year target of 315 sales.

Occupancy remains high at 99.5 per cent, down marginally from a year ago (99.6 per cent).

The group reported adjusted earnings from operating activities of €14.5m for the first half of 2025, an increase of 23.2 per cent per cent year-on-year, and credited the elimination of non-recurring costs for the significant bump.

The group also completed a successful debt refinancing in the period and now has a revolving credit facility in place until March 2030 with the option of two one-year extensions, bringing the its average cost of interest to 3.73 per cent.

“The first six months of the year have seen a step change in our operational and financial performance leading to significant improvements in margins and earnings," said Eddie Byrne, chief executive of I-RES.

"We have made real progress on our strategic initiatives including leveraging our operational capabilities to deliver 150 bps margin improvement.

"We have executed on our asset disposals programme achieving in excess of 25 per cent premium to book value whilst maintaining a focus on delivering shareholder value through our capital allocation framework.

"We are well positioned to capitalise on the improving regulatory and market backdrop and we are excited to build on the progress we have made.”  

The I-RES portfolio is now valued at €1,230m, down 0.2 per cent from €1,232m in December following the disposals. Yields remained broadly flat during the period at 5.2 per cent.

Net loan to value (LTV) stood at 45 per cent in June, up from 44.4 per cent in December and below the 50 per cent maximum allowed. Proceeds from sales will be deployed towards managing LTV within the target range of 40 to 45 per cent.

I-RES said the announcement of new rental regulations by the government had improved its outlook, describing the measures as "a positive step in addressing the issues of viability that are facing new apartment developments".

"Although the proposed new rules will not take effect until the March 1 2026, the company believes the proposed changes which allow units to be relet at the market rate on tenant turnover will be positive for the business, enhancing returns on the existing portfolio by enabling it to capture the significant reversion embedded in the portfolio," I-RES said.

"Under the new rules each unit in the portfolio, with a lease commencement after March 1 2026, that has a turnover will be eligible to be relet at market rent. I-RES rents are currently estimated by independent valuers to be 19 per cent below market.

"The company will review the draft Bill carefully upon its publication as legislation is not yet drafted regarding the proposed amendments and will need to go through the legislative process to be enacted."

(Pic: File)