IRES REIT, the largest residential landlord in Ireland, has recently rejected a proposal to sell the company to a private buyer. The decision sparked mixed reactions and debate among shareholders, with some criticizing the board’s reluctance to explore potential offers while others applauded the move as safeguarding the interests of long-term investors. In this article, we will delve deeper into the reasons behind the rejection and the implications it has for IRES and the broader Irish property market.
The board of Ires Reit has declined a call from one of its largest shareholders, Vision Capital, to sell the company due to poor stock market performance. In response to an open letter from the Canadian fund, which holds a 5.01% stake in Ires, the board stated its belief that the current share price did not reflect the company’s value, and that it was pursuing alternative ways to deliver value to shareholders. The board also announced plans to dispose of €100m worth of non-core assets in the short-term and return excess capital to shareholders. However, the board did not agree that the best way to unlock value was to sell the company to a private buyer, as suggested by Vision. The fund had been frustrated in its attempts to have its concerns addressed since last year, and said it would vote against the re-appointment of four directors and urge others to vote down key resolutions at the upcoming AGM. Vision CEO Jeffrey Olin criticised Ires’ listing, claiming the net value of its properties was higher than its €500m stock market valuation. The board argued that this was due to interest rate hikes, inflation, geopolitical issues and rent caps in Ireland, where the company owns around 4,000 apartments. Nonetheless, it pointed out that Ires had outperformed the European listed real estate sector by 6.4% since December 2021.
In summary, the board of Ireland’s largest real estate investment trust, Ires Reit, has rejected a call to sell the company to a private buyer. While some shareholders may have been hoping for an immediate payout, the board’s decision to focus on long-term strategic planning demonstrates a commitment to sustainable growth and shareholder value. As Ireland’s property market continues to fluctuate, it will be interesting to see how Ires Reit’s management navigates these challenges while identifying new investment opportunities. Only time will tell if the board’s decision was the right one, but for now, Ires Reit remains firmly in control of its future.
