Results for the Year Ended 31 December 2022

24 February 2023

Final Results

Irish Residential Properties REIT Plc

RESULTS FOR THE YEAR ENDED 31 DECEMBER 2022

Irish Residential Properties REIT plc (“I-RES” or the “Company”), an Irish real estate investment company focused on residential rental accommodation, today issues its annual results for the year from 1 January 2022 to 31 December 2022.

Key Financial and Operational Highlights

• I-RES continued to experience strong demand for its high-quality properties, with occupancy across its portfolio increasing to 99.4% (99.1% at 31 December 2021), generating strong recurring cashflows.
• Broadly stable operating performance despite the ongoing inflationary environment, with net rental income margin of 77.5% for the full year.
• Delivered portfolio growth, adding 238 units during the year through the purchase of 108 units at Ashbrook and the successful delivery of 69 units at Tara View and 61 units at the School Yard, which have leased up quickly.
• I-RES continued to deliver on its value maximising portfolio management and recycling strategy with the disposal of 128 units at Hampton Wood at an attractive yield of 3.5%, above the value at December 2021 and original cost. This proactive capital management brings our LTV at year end to 43.3%.
• As of 31  December 2022, I-RES’ portfolio comprised 3,938 high-quality residential rental homes and ancillary commercial space (31 December 2021: 3,829), with a total value of €1.5 billion at a gross yield of 5.9%, representing a slight yield expansion of 0.3% on 2021 and resulting in IFRS NAV per share of 160.0 cents (2021: 166.5 cents).
• Total revenue grew by 6.5% to €84.9 million for the year driven by I-RES’ portfolio growth, organic rental growth and strong occupancy levels. I-RES’s portfolio is a competitive value offering with professional service provided to residents and rent estimated to be c.11% below market.
• Net rental income increased to €65.7 million, representing an increase of 4.3% from the previous year. Adjusted EPRA earnings were €36.6 million, down 1.1% on 2021 due predominantly to increased interest costs as a result of the increasing interest rate environment in the second half of the year.
• I-RES recently entered into interest rate hedging arrangements in relation to its Revolving Credit Facility (‘‘RCF’’) which has resulted in 72% of the Company’s total drawn debt being fixed. In addition to the hedging arrangement, I-RES has no debt maturities until April 2026 and which extend out to 2032.
• The Board intends to declare a dividend of 2.81 cents per share for the period ended 31 December 2022 on, or about, 24 February 2023.
• Demonstrated strong governance with addition of further expertise to the Board and delivered progress on ESG commitments, including refinement of strategy, carbon reduction plans and social impact initiatives.

Margaret Sweeney, I-RES’ Chief Executive Officer, said: “2022 represented another year of delivery for I-RES. Despite the challenging macroeconomic backdrop, the financial and operational performance of the business was strong, demonstrating the resiliency of our business model and the commitment of our people. Our occupancy levels increased year-on-year to 99.4%, supported by the robust market demand for our high-quality professionally managed apartments. We also continued to execute on our growth strategy, adding 238 homes with strong sustainability credentials in excellent locations. This portfolio growth, coupled with our strong occupancy levels and organic rental growth delivered overall revenue growth of €84.9 million for the year, a 6.5% increase on 2021 and an increase in net rental income of 4.3% to €65.7 million.

We successfully completed the internalisation of the management company – a significant strategic milestone for the business. I-RES is now a fully integrated Irish company and operating platform which is unique in the Irish market. This has allowed us to invest in our people and technology, place an enhanced focus on our resident service standards and further embed sustainability across all aspects of the business. This investment will enable us to enhance our resident experience, while also delivering for all our stakeholders.

There is a significant shortage of good quality private rental accommodation available as highlighted in recent reports, to service a continually strong and growing population, economy and jobs market. We are pleased to have added 130 new homes at an investment of c.€70 million in 2022. With our strong balance sheet and disciplined capital management including recycling of capital, I-RES is committed to delivering on its mission of investing in the provision of professionally managed quality homes for the Irish market. Allied with supportive market fundamentals, the Company remains in a resilient position due to its high quality, irreplaceable property portfolio in proven locations, and our more affordable pricing proposition provides additional resilience through the cycle.

As we look ahead, we are strongly placed to continue to execute on our vision for the business. Our experienced team, high-quality portfolio, robust balance sheet and strong liquidity levels mean we are very well positioned to navigate an uncertain new landscape, whilst continuing to deliver for our investors and our stakeholders.”