Rents are going to keep rising the countries biggest landlord told its investors yesterday as they announced a surge in profits.
IRES REIT, a Canadian vulture fund who count apartment blocks in Tallaght (Priorsgate, Tallaght Cross West and The Laurels) among their massive Dublin portfolio of 2,300 properties, say their profits are up 25 per cent to €33.3 million in the first six months of the year, on the back of higher rents and the Irish housing crisis.
In a statement released yesterday they also say rents will continue to rise with all indicators showing that “a resolution of the housing shortage is a number of years away” and “with Ireland’s economic outlook remaining positive, the path of least resistance for prices and rents still remains to the upside.”
They acquired most of their properties at knock down prices from NAMA in the last three years and now collect an average rent of €1,459 a month from tenants, 4.3% more than the €1,399 that it charged during the same period in 2016.
As well as the rent increases a further kick in the stomach for both Irish tenants and tax payers alike is IRES REIT pay 0% tax to this country on all rental income and likewise pay 0% on any capital gains.
CEO David Ehlirch (who is not tax resident in Ireland and contributes nothing to the Irish exchequer) said the company is looking to convert and increase the intensity of its housing units.
“Despite a recent uptick in completions, the most striking feature of the Irish housing market remains a significant mismatch between supply and demand.
“This situation looks set to continue to the end of the decade at least.”
The statement also assures investors that IRES strives to increase rents as market conditions permit and subject to applicable laws as well as acknowledging the 4% ceiling on rent increases introduced by the Government in December slowed the rate at which the charges rose to 7.9% in the first half from 9.6%.
This is the same David Ehrlich who moaned after the IRES REIT AGM in May that he was “tired of us being called a vulture fund.”
Speaking to the press he said:
“There is nothing wrong with vulture funds.
“They perform a valuable service when banks need to unload a lot of debt off their books.
“But we are the opposite of a vulture fund.
“We are in Ireland for the very, very long term.”
By his logic if you rip off Irish people over a short spell you’re a vulture, if you do it over a number of years you’re not?!