Capreit, a property investment firm from Canada and the original founder of Ires Reit, has parted with its remaining stake of 9.7% in Ireland’s biggest private residential landlord, based on statements from the stock exchange. This development occurs as Ires Reit proceeds with a strategic evaluation, following the cessation of hostilities in April with Vision Capital. The latter is a Canadian investor who owns a 5% stake and had been advocating publicly for a year for the company to be sold or divided.
As part of the settlement, Vision has managed to gain two seats on the board. In 2014, Capreit was responsible for putting together Ires’ primary portfolio comprising of 338 flats and for managing its IPO. It initiated the decrease of its 18.7% stake in the Dublin-based firm back in February. As of Wednesday evening, the buyer of the stock was unknown.
Earlier in February, Capreit had supported Vision’s unsuccessful attempts to replace five Ires directors and convince the shareholders to agree on a sale or division of the firm, which now possesses 3,734 residential units, within the span of two years. Capreit received nearly €50 million in fees from Ires for asset and property management from the IPO until two years ago, when Ires decided to handle management internally.
Real Estate Investment Trusts (REITs) like Ires Reit are usually established with the founding property company managing the assets by contract via a fund management vehicle. The strategic review, which was initiated by Ires Reit in late February, is currently under the supervision of the new chairman, Hugh Scott-Barrett, and CEO, Eddie Byrne.
In late April, the company expressed that disposing of all the apartment owner’s assets in the current climate would pose a challenge to enhance value for shareholders in the short-term, whilst continuing to evaluate its future strategically and its shares persist trading at a significant discount. Although the board is positive about the medium-term prospects for the Irish private rental industry (PRS), issues like increasing interest rates, restrictive regulation including rent regulation, a lack of deal activities, and concerns regarding the upcoming general election, continue to pose short-term challenges.