Third quarter trading update | 22.11.24

Irish Residential Properties REIT plc

Third quarter trading update

Continued strong operational results, good progress on strategic initiatives

November 22, 2024, Dublin | Irish Residential Properties REIT plc (“the Company” or “I-RES”), Ireland’s largest provider of private rental accommodation, today provides a trading update for the three months ended 30 September 2024 (the “Third Quarter” or “Q3”), together with a progress update on initiatives announced as part of the Company’s Strategic Review (“the Strategic Review”), which was completed in August.

Operational highlights

• The occupancy rate across the portfolio remains strong and stood at 99.4% as of September 30, 2024 (June 30, 2024: 99.6%). The market-leading occupancy rate reflects the high quality of our properties, the efficiency of our operating platform and the exceptional demand for rental properties in Dublin.

• The Company remains on track to deliver a full year 2024 net rental income margin (“NRI”) broadly in line with the margin reported in the first half of the year (H1 2024: 76.5%), including the impact of strategically identified divestments completed during the year.

• The company continues to be in a strong financial position, supported by a robust balance sheet. Reflecting the impact of the divestments below, LTV1 has fallen to 45.0% on November 21 2024 (45.4% as at 30 June 2024), well below the 50% limit set by the Company’s debt covenants and Irish REIT law.

Progress on strategic evaluation initiatives

• The company has made significant progress in advancing strategic review initiatives, including the following:
  • The company has now completed the sale of a total of 37 units as part of the previously announced target of 315 units, with 20 assets sold in accordance with book value in a bulk sale and a further 17 units sold to individual buyers achieving sales premiums.2 from c. 25%.
  • Completion of investment sales of 25 units outside the 315 unit program, also in line with book values2.
  • The company expects to complete sales of an additional 50 units in 2025, at an average sales premium2 between 15% and 20%.
  • In total, the above divestments are expected to generate total gross sales proceeds of between €35 and €37 million.
  • Based on the initial success of the program, the company is actively exploring how best to accelerate and scale the scale of the program, delivering shareholder value aligned with strategic objectives and sound asset management.

• The company is in the early stages of implementing additional revenue-generating and cost-saving initiatives, as identified in the Strategic Review, and has successfully executed initiatives in c. 4% of the portfolio, with an expected annualized NRI increase of 8-10% for these units.

• The company has now completed a strategic exit from the cork market. This is an important step towards improving cost structures and margins. Focusing on the greater Dublin area will maximize the Group’s efficiency and future operational impact.

Capital allocation

• The Board remains committed to maximizing shareholder value and addressing the discount between the company’s current market capitalization and intrinsic value. In line with this objective, the proceeds from the previously announced recycling program are expected to be used for:
  • Continuing to actively manage the LTV within the bandwidth of 40% to 45% envisaged by the Council, and subsequently;
  • Prioritize excess capital to improve shareholder returns through the efficient return of capital to shareholders.

• Management will continue to focus on the capital allocation strategies mentioned above as long as the stock price trades at a steep discount to intrinsic value.

• The company expects to provide shareholders with a further update on progress on the level of excess capital and how it will be deployed in relation to the above initiatives when it publishes its 2024 annual results in February 2025.

Eddie Byrne, CEO of I-RES, commented:

“We are pleased to report strong progress on our strategic review initiatives and are encouraged by the company’s positive momentum. The implementation of our recycling program is ahead of our expected timeframe and will further strengthen our financial position. While we will continue to consider all opportunities to enhance shareholder value, we are confident in the long-term market opportunities supported by our high-quality portfolio and market-leading operating platform.”

1 LTV after cash deduction, based on portfolio valuation as of June 30, 2024

2 Based on book values ​​as of June 30, 2024

END

For more information please contact:

For investor relations:

Irish Residential Properties REIT plc

Luke Ferriter, Director of Investor Relations [email protected] Tel: +353 (0) 1 563 4000

Eddie Byrne, Managing Director Tel: +353 (0) 1 557 0974

For media queries:

Jonathan Neilan, FTI Consulting [email protected] Tel: +353 (0) 86 231 4135

Sam Moore, FTI Consulting Tel: +353 (0) 87 737 9089

About Irish Residential Properties REIT plc

Irish Residential Properties REIT plc (“I-RES”) is a growth-oriented Real Estate Investment Trust delivering high-quality, professionally managed homes in sustainable communities in Ireland. The Group owns 3,672 privately rented apartments and houses in Dublin. I-RES aims to be the supplier of choice to the Irish residential sector, renowned for its excellent service and responsible business practices, minimizing environmental impact and maximizing contribution to the community. The Company’s shares are listed on Euronext Dublin. Further information at www.iresreit.ie.

This note applies if and to the extent there are any forward-looking statements contained in this announcement.

This announcement may contain forward-looking statements, which are subject to risks and uncertainties because they relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends, and similar statements about matters that are not historical facts. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company or the industry in which it operates to be materially different from any future results, performance or achievements. or implied by such forward-looking statements. The forward-looking statements referred to in this paragraph speak only as of the date of this announcement. Unless required by law or an applicable regulatory authority, the Company undertakes no obligation to release publicly any revision or update to these forward-looking statements to reflect future events, circumstances, unanticipated events, new information or otherwise give.