Irish Residential Property REIT, the newly-incorporated real estate investment trust controlled by Canada’s largest residential landlord CAPREIT, has completed its maiden gross capital raise of €200m and listed on the Irish Stock Exchange today.
Cornerstone investors in IRES REIT comprise: €30m by Fir Tree Partners, the New York-based Investment Trust; €25m by Franklin Templeton, the California-based investment group; €24.24m by Irish Life Assurance Ireland’s largest life assurance Company and part of Great West Group.
In addition, significant initial share acquisitions have also been subscribed to by Schroder Investment, Starwood Real Estate and Setanta Asset Management.
IRES REIT will acquire, hold and manage investments primarily focused on multi-unit residential real estate and ancillary and/or strategically located commercial property for third party rental in Ireland.
The company commenced operations in Ireland in September 2013 when it acquired an initial portfolio of 338 residential apartments across four separate locations in the Greater Dublin area for €42.4m.
CAPREIT funded the acquisition of the seed portfolio with a €45m intercompany loan, which will be repaid with the net proceeds of the capital raising which is €192m.
The balance of the capital, at around €149m, will be used to acquire property investments in accordance with the IRES REIT investment policy.
Last Thursday (April 10), CoStar News reported that CAPREIT had progressed to the second round of the bidding process for Danske Bank’s residential and development property portfolio, dubbed Project Circle, which if won could ultimately be acquired through IRES REIT. Guide price is between €80m to €100m.
Project Circle is comprised of almost 600 individual homes and a small number of development plots across two separate tranches, came to market in early March (see second story).
In a prepared statement, David Ehrlich, chief Executive, IRES REIT, said: “We are delighted to have secured strong institutional support for IRES REIT, the first Irish-based REIT that will focus primarily on the multi-unit, residential rental sector in Ireland.
“The ompany intends to use the funds raised to acquire a strong portfolio of multi-unit residential properties in Dublin and the other major urban centres and to offer tenants and investors the benefits of the professional approach that has proved so successful for CAPREIT in Canada.”
Colm Ó Nualláin, chairman, IRES REIT, said: “We are very pleased with the encouraging response from investors to participate in the creation of a professionally-run, multi-unit residential sector in Ireland with the support of CAPREIT, the leading provider of residential accommodation across Canada.”
IRES REIT is seeking to build a multi-unit residential portfolio comprised across the affordable, mid-tier and luxury accommodation sectors and ancillary commercial property located in the greater Dublin area and other urban centres on the Island of Ireland.
Furthermore, IRES REIT will target multifamily residential assets and portfolios with short and medium-term value active asset management plays, which contribute to a gross rental income target of 8.6% to 10%.
All investments will be subject to a leverage ceiling of 50% on current loan to value.
CR Fund Management is IREIT’s investment manager, with the team including Thomas Schwartz, Michael Boyce and Simon O‘Sullivan.