Rents are poised to keep rising as the squeeze on housing continues according to the Chief Executive of Ires Reit, David Ehrlich.
Profits at apartment block owner Ires Real Estate Investment Trust (Ires Reit) surged 25% to €33.3 million in the first six months of the 2017, on the back of higher rents and a jump in the value of its properties.
Ires collected an average rent of €1,459 a month from its tenants in the first half of this year, 4.3% more than the €1,399 that it charged during the same period in 2016.
The total rent collected in the first half of this year grew 22% to €21.7 million from €17.9 million in the same period in 2016.
After costs, the company’s net rental income increased at the same rate to €17.1 million.
Chief executive David Ehrlich said the average monthly rent increased due to rental growth on renewals and turnovers.
The company’s statement notes that it strives to increase rents as market conditions permit and subject to applicable laws.
It also acknowledges that 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 per cent.
Ires owned 2,381 apartments in blocks throughout Dublin at the end of June. Almost 99% of them were let. The value of its properties increased by €19.3 million during the first half.
The increase in both rents and value combined to give the company an operating profit of €33.3 million in the first half, just under 25% more than the €26.6 million it earned during the same period last year.
Ires intends to return €10.4 million in dividends to its backers for the first half of the year.
Irish law requires real-estate investment trusts to pay dividends to shareholders, subject to them having the reserves to cover this.