Results for the Year Ended 31 December 2024

20 February 2025

Final Results

Irish Residential Properties REIT Plc

RESULTS FOR THE YEAR ENDED 31 DECEMBER 2024

Earnings growth underpinned by strategic progress

Key Highlights

• A return to earnings growth with Adjusted EPRA earnings increasing 1.4% and Adjusted Earnings (excluding fair value movements) growing to €30.5 million, an increase of 8.7% in 2024.
• An intention to return excess capital and commence a share buyback programme with a maximum aggregate consideration of up to €5 million.
• Disposal programme progressing well with 66 disposals completed during the year generating total gross proceeds of c. €19 million, and a €1.6 million gain versus book value achieved through 21 individual unit sales.
• In the second half of 2024, yields stabilised resulting in like for like valuations broadly in line with 30 June 2024.

Irish Residential Properties REIT plc (“I-RES” or the “Company”), the leading provider of rental homes in Ireland, today issues its annual results for the twelve month period from 1 January 2024 to 31 December 2024.

Eddie Byrne, I-RES’ Chief Executive Officer, said:

“2024 has been a year of solid progress for I-RES. 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. 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. As an Irish long-term investor with permanent capital at our disposal, we are uniquely positioned to navigate the evolving market landscape and deliver sustainable growth into the future.”

Financial and Operational Highlights

• Earnings growth of 1.4% for the year with Adjusted EPRA earnings of €28.9 million (2023: €28.5 million) and adjusted EPRA EPS of 5.5 c (2023: 5.4c). Adjusted Earnings (excluding fair value movements) growth of 8.7% to €30.5 million in 2024 (2023: €28.1 million), reflecting  the success of our ongoing asset recycling programme in generating sales premia significantly ahead of book values.
• The portfolio continues to be effectively fully occupied at 99.4% (31 December 2023: 99.4%) which reflects both our highly effective operating platform and the continued strong underlying demand for high quality rental properties in Dublin.
• Like-for-like revenue growth of 1.7% in 2024, driven by both organic rental increases and ancillary revenue through new initiatives across the portfolio despite HICP being persistently below the 2% cap throughout H2. Reported revenue for the period of €85.3 million reduced by 2.9% versus prior year, reflecting the impact of 66 unit disposals successfully completed in 2024 as part of our ongoing asset recycling programme and the disposal of c. 5% of the portfolio in H2 2023.
• Delivered a Net Rental Income (“NRI”) margin of 76.8% for 2024 (2023: 77.3%), with NRI margin in H2 incrementally improving compared to H1. NRI for the year of €65.5 million reduced by 3.6% versus the prior period, driven by the impact of our ongoing asset recycling programme and 2023 H2 disposals. On a like for like basis NRI margins were broadly in line with 2023, reflecting the impact of rigorous cost management initiatives in the period and moderating inflation in Ireland during 2024.
• Financing costs reduced by 12.4% to €23.4 million, reflecting both the deployment of disposal proceeds to reduce variable debt and the impact of a reducing global interest rate environment.
• Non-recurring costs of €3.4 million were recorded during the year, with the majority relating to Shareholder Activism and the completion of the Strategic Review which concluded in August.
• Disposals under the Company’s Strategic Review initiatives were strong, both in terms of the number of units sold at 66 and the premium achieved against book of c. 25% or €1.6m for the 21 units which were sold individually.
• The Company recorded a loss before tax of €6.7 million for the year driven by a yield expansion of c. 20bps in H1 which resulted in a non-cash fair value reduction for the year of €33.7 million. This resulted in an IFRS NAV per share of 126.2 cents at 31 December 2024 (31 December 2023: 131.7 cents).

Balance Sheet and Capital Allocation

• As at 31 December 2024, I-RES’ portfolio had a total value of €1,232 million (31 December 2023: €1,274 million) with the change in the period primarily driven by asset disposals and a fair value reduction due to expansion of yields in H1 partially offset by positive net rental growth. In the second half of the year yields have stabilised resulting in like-for-like valuations broadly in line with 30 June 2024.
• The portfolio maintained its EPRA net initial yield of 5.1% in line with 5.1% at 30 June 2024 and compared to 4.9% at 31 December 2023. Stable yields in H2 reflect the wider residential market dynamics in Ireland and the impact of cost reduction initiatives on asset profitability.

• Net LTV stood at 44.4% at 31 December 2024, down from 45.4% at 30 June 2024, at the higher end of internal targets but is comfortably below our debt covenants and the limits set by Irish REIT legislation.
• Proceeds from the ongoing asset recycling programme are expected to be deployed towards continuing to actively manage LTV within the target range of 40% to 45%. Thereafter we will prioritise excess capital towards enhancing shareholder returns through an efficient return of capital to shareholders.
• Consistent with the above capital allocation strategy and also recognising the current discount between the Company’s share price and its Net Asset Value per share, the Company today confirms its intention to return excess capital through a share buyback programme with a maximum aggregate consideration of up to €5 million. The quantum is funded by the Company’s excess reserves and represents the premium to book that the Company has achieved in 2024 and expects to achieve over the next 15 months from its asset recycling programme and is broadly the maximum that can be acquired at present in an efficient manner and in line with our capital allocation strategy outlined above.
• In line with Irish REIT legislation, the Board intends to declare a dividend of 2.20 cents per share for the six months ended 31 December 2024, bringing the total dividend for 2024 to 4.08 cents per share, in line with the requirements of Irish REIT legislation and representing the company’s dividend policy of paying out 85% of EPRA earnings.

Continued Progress on Strategic Review Initiatives

• The Company completed the disposal of 41 units in total in 2024 as part of the previously announced target of 315 units across a 3-5 year period, selling 21 individual units achieving sales premiums on average of c. 25% and a further 20 units in line with book value through a bulk sale. We also completed the bulk sale of a further 25 units outside of the 315-unit programme, also in line with book values. Together this takes the total number of units disposed of to 66 in 2024. Disposals completed during the year generated total gross proceeds of c. €19 million and a €1.6 million gain versus book value.
• The Company expects to complete the disposal of at least a further 50 units in 2025, at an average sales premium of between 15% and 20%, generating total gross proceeds of c. €18 million. As at 31 December 2024, the Company had 13 units in a sales process which we expect to complete in the coming months.
• The Company is implementing additional income generating and cost reduction initiatives as identified in the Strategic Review and to date has successfully executed initiatives across c. 6% of the portfolio, with an expected annualised NRI increase of 8-10% for these units. We continue to review which other units in the portfolio could also benefit from similar initiatives and will continue to build on our progress in 2025.
• The Company completed a strategic exit from the Cork market. This is an important step towards improving cost structures and margins. Focusing on the greater Dublin area maximises efficiencies and the future operating leverage of the Group.
• Following the Irish general election in November 2024 the Company has continued to advocate for the advancement of a new regulatory system that gives protection and certainty to renters while also delivering a viable investment case for the development of new private rental accommodation at scale to address the chronic undersupply of rental housing which currently exists in the Irish market. The Company welcomes the Irish government’s commitment in the Programme for Government to encourage institutional investment, continue with its commitment to review rent regulations and attract private capital to its STAR scheme.

Outlook

• The Company remains well placed to deliver on its strategic objectives, drive growth and shareholder value with long term structural drivers of growth continuing to drive demand for rental accommodation coupled with an improving economic landscape.
• The Company will continue to focus on executing strategic initiatives to maximise shareholder value whilst also continuing to pursue revenue generating and cost reduction initiatives, with a strong focus on optimising the operational performance of the business.
• The Company will maintain a disciplined approach to capital allocation, focusing on long-term value creation, balance sheet management, while seeking to deliver attractive returns to shareholders through the ongoing ordinary dividend, supplemented by periodic returns of excess capital. 
• A new Government with a significant majority was elected in January 2025 on a five-year mandate, which is positive news for the real estate sector as a long-term focus is necessary for housing policy. There is an improving sentiment from policy makers towards implementing a more balanced regulatory structure aimed at delivering more homes while protecting renters, as outlined in the Programme for Government.

Financial Highlights