8 August 2024 I-RES H1 2024 Results Irish Residential Properties REIT plc Underlying revenue growth of 2.1% and continued strong occupancy of 99.6% Irish Residential Properties REIT plc (“I-RES” or the “Company”), the leading provider of residential rental accommodation in Ireland, today issues its results for the six-month period from 1 January 2024 to 30 June 2024. Financial and Operational Highlights Like-for-like revenue growth of 2.1%, driven by both organic rental growth across the existing portfolio and enhanced ancillary revenue generation. Reported revenue for the period of €42.8 million, reducing versus prior year by 3.3% driven by the impact of asset disposals completed during the second half of 2023 which represented c. 5% of our portfolio. Continued strong occupancy of 99.6% at 30 June, reflecting the effectiveness of our leasing operations and the continued strong demand for our high-quality portfolio of modern properties. NRI margins broadly stable on a like for like basis, demonstrating the positive impact of moderating inflation levels in Ireland and continued rigorous cost control by management. NRI for the period of €32.7 million (30 June 2023: €34.3 million), with the reduction again driven by the impact of 2023 asset disposals. Financing costs reduced by 10.0% as disposal proceeds were deployed to reduce higher cost debt during 2023. The Company continues to have excellent visibility of future financing requirements, with 83% of our drawn debt fixed at a blended rate of 3.27%. Non-recurring costs of €1.5 million were recorded in the period associated with Shareholder Activism. A further €0.9 million was incurred in relation to the Strategic Review. Adjusted EPRA Earnings of €14.2 million and resulting Adjusted EPRA EPS of 2.7c, down from 2.8c in H1 2023. Hugh Scott-Barrett appointed as Chair and lead of the Board’s Strategic Review in February 2024, having served as non-executive director since September 2022. Experienced real estate executive Eddie Byrne appointed as CEO in May 2024 with direct input into the Strategic Review since his appointment. Enhanced our vertically integrated digital platform “I-RES Living” through the launch of our new resident and corporate website. This launch is part of our wider operational and digital transformation strategy of enhancing our offering to customers and driving efficiencies in the business. In line with Irish REIT legislation the Board intends to declare an interim dividend of 1.88 cents per share for H1 2024 representing 85% of our relevant distributable earnings in the period. Moving forward we intend to continue to pay, in line with REIT legislation of 85%, relevant earnings as a dividend to shareholders. Asset Portfolio Valuation and Balance Sheet Management As at 30 June 2024, I-RES’ portfolio had a total value of €1,243 million (31 December 2023: €1,274 million) with the change in the period driven by modest yield expansion, and partially offset by positive rental growth. The portfolio has an EPRA net initial yield of 5.1% representing a yield expansion of 0.2% since 31 December 2023 and resulting in an IFRS NAV per share of 126.4 cents (31 December 2023: 131.7 cents). This yield expansion resulted in a non-cash fair value revaluation adjustment of €32.5 million and a loss before tax for the period of €20.3 million. Net LTV was 45.4% at 30 June 2024, comfortably below our debt covenants and the limits set by the Irish REIT legislation. The Strategic Review has identified c. 315 units suitable for an asset recycling programme which is expected to generate proceeds of between €110 and €115 million (based on estimated current OMV
[1]) over a 3 to 5 year period, with the proceeds to be deployed in line with our capital allocation policy. In the latter part of H1 2024, we completed 6 individual unit disposals, generating c. €2 million of net proceeds, with disposals completed at a significant premium to latest book values. Strategic Review We have separately announced this morning the conclusion of our Strategic Review, which commenced in February 2024 and was led by Chair Hugh Scott-Barrett and a dedicated Board subcommittee including CEO Eddie Byrne and non-executive directors Denise Turner, Philip Burns, and Richard Nesbitt. The Review was supported by international financial and real estate advisors. The Board has unanimously concluded that, following rigorous market testing, a sale of the Company or its assets is unlikely to maximise shareholder value. No proposals were received to acquire the Company during the course of the Review. The Strategic Review has identified the following initiatives or actions which the Board believes will drive value maximisation for shareholders over the medium-term: Executing a selective capital recycling programme which is accretive to value, including the disposal of c. 315 units which is expected to generate between €110 and €115 million of proceeds over a 3 to 5 year period (based on estimated current OMV). Disposals are expected to take place over a 3 to 5 year period as turnover of current tenancies is a prerequisite for the disposal of these units under Irish law. This represents c. 8% of the total portfolio and c. 23% of the Company’s market capitalisation
[2]. Generation of supplementary revenue streams consistent with existing Irish regulations. Optimising the Company’s cost structure to maximise Net Rental Income Margin and Adjusted EBITDA Margin to ensure the Company is best placed to leverage future growth opportunities. Taking advantage of the significant growth and consolidation opportunities which exist in the Irish PRS market over the medium-term, and for which I-RES is uniquely positioned to capitalise on. Continuing to work constructively with stakeholders, including government, to push for positive change in the Irish residential regulation system. Continuing to advocate with the relevant Irish authorities for changes to the Irish REIT regime to better align with progressive REIT systems in other European jurisdictions. Exploring attractive opportunities to partner, inter alia, with Irish government bodies to deliver new supply to the affordable housing market including the Secure Tenancy Affordable Rental (“STAR”) scheme. Commenting on the results, Eddie Byrne, Chief Executive Officer, said: “I am pleased to report my first set of results as CEO of I-RES. It has been an active period for the Company with the delivery of another strong operational performance and the completion of our Strategic Review. I joined the Company at a very exciting time and it is clear that significant opportunities exist for I-RES in an exceptionally strong Irish PRS market. While overall we believe the outlook is positive, the current Irish rental regulatory structure remains the single most inhibiting factor for our business. The 2% cap on rental increases has had a profound impact on the supply of new build-to-let properties in the market and is an impediment to critical international investment. We believe that a more progressive and evidence based regulatory framework that is fair and equitable to both the resident and the property owner, will attract institutional capital and help to alleviate the current supply shortage while also providing safe and secure tenancy for residents. We are continuing to engage constructively with stakeholders to encourage reform of PRS regulation in Ireland, and welcome recent publications from the Departments of Housing and Finance and the Housing Commission, which all point towards a change of tone that the current regulatory structure requires significant reform. We are also engaging with Irish government bodies on initiatives such as the Secure Tenancy Affordable Rental programme to support the delivery of new supply to the affordable housing market. Looking ahead, we will focus on implementing the operational initiatives identified by the Strategic Review which will help to optimise our portfolio, drive value maximisation for shareholders, and improve our financial performance over the medium-term.” Financial Highlights
| For the six months ended | 30 June 2024 | 30 June 2023 | % change |
| | | | |
| Operating Performance | | | |
| Revenue from Investment Properties (€ millions) | 42.8 | 44.3 | (3.3%) |
| Net Rental Income (€ millions) | 32.7 | 34.3 | (4.6%) |
| Adjusted EBITDA (€ millions) (1) | 26.6 | 28.7 | (7.3%) |
| Financing Costs (€ millions) | (11.9) | (13.3) | (10.0%) |
| | | | |
| Adjusted EPRA Earnings before non-recurring costs (€ millions)(1) | 14.2 | 15.0 | (5.3%) |
| Deduct: Non-recurring costs (€ millions) (1)(2) | (2.4) | — | |
| EPRA Earnings (€ millions)(1) | 11.8 | 15.0 | (21.3%) |
| | | | |
| Add: Decrease in fair value of investment properties (€ millions) | (32.5) | (56.5) | |
| Add: Gain/(Loss) on disposal of investment property (€ millions) | 0.4 | (0.7) | |
| Add: (Loss)/Gain on derivative financial instruments (€ millions) | (0.1) | 0.1 | |
| Loss before tax (€ millions) | (20.3) | (42.1) | |
| | | | |
| Basic EPS (cents) | (3.8) | (8.3) | |
| EPRA EPS (cent) | 2.2 | 2.8 | (21.3%) |
| Adjusted EPRA EPS (cents)(1) | 2.7 | 2.8 | (5.3%) |
| Proposed Interim Dividend per share (cents) | 1.88 | 2.45 | (23.3%) |
| | | | |
| Portfolio Performance | | | |
| Total Number of Residential Units | 3,728 | 3,930 | (5.1%) |
| Overall Portfolio Occupancy Rate(1) | 99.6% | 99.5% | |
| Overall Portfolio Average Monthly Rent (€)(1) | 1,796 | 1,772 | 1.4% |
| As at | 30 June 2024 | 31 December 2023 | % change |
| | | | |
| Assets and Funding | | | |
| Total Property Value (€ millions) | 1,243.5 | 1,274.4 | (2.4%) |
| Net Asset Value (€ millions) | 669.3 | 697.3 | (4.0%) |
| IFRS Basic NAV per share (cents) | 126.4 | 131.7 | (4.0%) |
| Group Net LTV | 45.4% | 44.3% | |
| Gross Yield at Fair Value | 7.0% | 6.7% | |
| EPRA Net Initial Yield | 5.1% | 4.9% | |
| | | | |
| Other | | | |
| Market Capitalisation (€ millions) | 481.9 | 587.7 | |
| Total Number of Shares Outstanding | 529,578,946 | 529,578,946 | |
| Weighted Average Number of Shares – Basic | 529,578,946 | 529,578,946 | |
(1) For definitions, method of calculation and other details, refer to the Financial Review and Glossary. (2) The non-recurring costs include €1.5 million associated with Shareholder Activism and a further €0.9 million for the Strategic Review, totalling €2.4 million of non-recurring costs at 30 June 2024 and general and administrative expenses of €6.0 million at 30 June 2024 that total the general and administrative expense costs of €8.4 million reflected in the Condensed Consolidated Interim Financial Statements for the six months ended 30 June 2024. For further information please contact: Investor Relations: Eddie Byrne, Chief Executive Officer Tel: +353 (1) 5570974 Luke Ferriter, Director Investor Relations email:
investors@iresreit.ie Media enquiries: Padraig McKeon, I-RES PR and Communications Tel: + 353 (0) 87 231 2632 Jonathan Neilan, FTI Consulting
ires@fticonsulting.com Tel: +353 (0) 86 231 4135 Results Presentation: webcast and conference call details: I-RES will host a live audio webcast and conference call of the results presentation this morning at 09:00am BST. Access details are listed below: Ireland: +353 (0) 1 691 7842 UK: +44 20 3936 2999 Global Dial-In Numbers: click
HERE Access Code: 793317 Webcast Link:
https://www.investis-live.com/ires-reit/667536841c01ae0c0019053b/bfwe This report and a copy of the presentation slides will also be available to download on the investor relations section of the I-RES website at 07:00am BST:
https://www.iresreit.ie/investors About Irish Residential Properties REIT plc Irish Residential Properties REIT plc (“I-RES”) is a growth oriented Real Estate Investment Trust providing quality professionally managed homes in sustainable communities in Ireland. The Group owns 3,728 apartments and houses for private rental in Dublin and Cork. I-RES aims to be the provider of choice for the Irish living sector, known for excellent service and for operating responsibly, minimising its environmental impact, and maximising its contribution to the community. The Company's shares are listed on Euronext Dublin. Further information at
www.iresreit.ie. Forward-Looking Statements This Report includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “may”, “will”, “should”, “expect”, “anticipate”, “project”, “estimate”, “intend”, “continue”, “maintain”, “forecast”, “potential”, “target” or “believe”, or, in each case, their negative or other comparable terminology, or by discussions of strategy, plans, objectives, trends, goals, projections, future events or intentions. Such forward-looking statements are based on the beliefs of management as well as assumptions made and information currently available to the Company. Forward-looking statements speak only as of the date of this report and save as required by law, the Irish Takeover Rules, the Euronext Dublin Listing Rules and/or by the rules of any other securities regulatory authority, the Company expressly disclaims any obligation or undertaking to release any update of, or revisions to, any forward-looking statements or risk factors in this report, including any changes in its expectations, new information, or any changes in events, conditions or circumstances on which these forward-looking statements are based. Due to various risks and uncertainties, actual events or results or actual performance of the Company may differ materially from those reflected or contemplated in such forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of and no reliance should be placed on, such forward-looking statements. There is no guarantee that the Company will generate a particular rate of return. Chair Statement Strong Operational Start to 2024 I was pleased to take over as Chair of I-RES in February 2024, having served as a non-executive director on the Board since 2022. Since my appointment, I have had the opportunity to visit a number of the I-RES properties and all of the regional offices and engage with the wider team which has given me a real sense of the strengths of the business. I-RES has been very active in the first half of 2024, delivering another strong operational performance and completing our Strategic Review which has evaluated all options available to maximise value for shareholders. The exceptionally strong dynamics of the Irish residential market, which is currently characterised by a chronic supply and demand imbalance, continues to support the execution of our strategy to be the market leading provider of mid-market rental accommodation in Ireland. The Irish economy is set to continue its strong growth trajectory, with demographic changes such as rapid population growth and changes in average household size expected to provide structural demand tailwinds for our business in the short to medium term. In contrast, the current regulatory landscape continues to provide an ongoing challenge for the sector. The 2% cap on rental increases continues to restrict institutional capital investment for new rental properties in the market, further exacerbating the imbalance between supply and demand. A recent publication from the Housing Commission has corroborated our view that reform of the current regulatory structure is required to provide a fair and equitable system that both incentivises investment in supply and provides secure, sustainable tenancy for residents. The Department of Housing also cited several limitations and unintended consequences resulting from the current regulatory environment in their review of the PRS sector published in July. As the largest provider of rental accommodation in Ireland, I-RES continues to maintain an active programme of engagement with stakeholders and policymakers to push for change to current regulation. Our scalable operating platform, which is unique in the Irish market, produced another strong operational performance in the first half of 2024, as evidenced by our sector leading occupancy rate of 99.6%. Our underlying business continued to exhibit a solid financial performance, with Revenue and Net Rental Income both increasing year over year on a like-for-like basis. Our financing costs also reduced in the first half of the year, reflecting the positive impact of the strategic asset disposal programme completed in 2023, the proceeds of which were used to reduce our higher cost debt. Our business model continues to be highly recurring and cash-generative in nature, supporting our commitment to the payment of regular dividends to shareholders. In line with Irish REIT regulations, I-RES is required to distribute at least 85% of its Property Rental Business income each financial year to shareholders, assuming sufficient distributable reserves. In compliance with REIT regulations, for the six months ending 30 June 2024, the Company proposes to declare an interim dividend of 1.88 cents per share representing 85% of our relevant distributable earnings for the period. Moving forward we intend to continue to pay, in line with REIT legislation, 85% of relevant earnings as a dividend to shareholders. Building a sustainable business in adherence to ESG principles remains a core component of our strategy. We are committed to minimising our environmental footprint, promoting sustainable living, and building communities where we operate. I-RES is committed to achieving Net Zero Carbon by 2050 and our ambition is to reduce our carbon emissions in line with the Paris Climate Agreement as we believe it is our responsibility to limit carbon impacts of our assets and meet this significant industry challenge. During the first half of 2024, we published our dedicated ESG report which highlights the significant progress we have made in our sustainability journey during 2023, including reductions in our GHG emissions and further improvement in our ESG agency ratings. Appointment of CEO We were pleased to announce the appointment of Eddie Byrne as CEO of the Company in May. Eddie has brought a significant degree of real estate and transactional experience to the role and has a 20+ year track record across both the Irish and international real estate markets. Since joining I-RES, Eddie has had a clear focus on the operations of the Company and has been able to provide valuable and complementary insight as part of the Board sub-Committee which has overseen the Strategic Review. Conclusion of Strategic Review We have separately announced this morning the conclusion of our Strategic Review which commenced in February and explored all strategic options available to maximise value for shareholders. The Review was overseen by a Board sub-Committee, led by myself, and including newly appointed CEO Eddie Byrne and non-executive directors Denise Turner, Philip Burns and Richard Nesbitt since his appointment to the Board on May 10, 2024. The Board sub-Committee was supported by international financial and real estate advisors. Following on from our update provided to the market on 25 April, we are pleased to announce the findings from the comprehensive analysis of the Review. As indicated in our update on 25 April, despite the public announcement of the Strategic Review, and following further rigorous market testing with capital markets and industry participants, the Board has unanimously concluded that a sale of the Company or its assets is unlikely to result in a maximisation of shareholder value in the short-term. This conclusion is based on several factors, in particular the challenges presented by the current regulatory structure in the Irish rental market, as well as the prevailing higher interest rate environment and the resultant impact on financing potential leveraged takeovers. The Irish residential real estate market also continues to be characterised by historically low liquidity levels, with approximately €240 million of transactions completed in 2023, c.73% below the historical 10-year average. Therefore, an accelerated sale of the Company’s assets in the direct market including to occupiers and social providers such as the government, would be challenging to maximise value for shareholders in the short-term. The Strategic Review has identified the following initiatives which the Board feels will drive value maximisation for shareholders over the medium-term: A programme to drive value accretion and improve portfolio composition by recycling c. 315 units and releasing between €110 and €115 million of value over a 3 to 5 year period (based on current estimated OMV). The programme represents c. 8% of the current portfolio and c. 23% of the Company’s market capitalisation
[3]. Disposal proceeds are expected to be deployed in line with our capital allocation priorities, initially strengthening our Balance Sheet and actively managing our LTV by reducing higher cost debt, whilst retaining flexibility for opportunities that are accretive to our earnings profile over time. Generation of supplementary revenue streams that are consistent with existing Irish regulations. Optimising the Company’s cost structure to maximise Net Rental Income Margin and adjusted EBITDA Margin to ensure the Company is best placed to leverage future growth opportunities. Exploit the very significant growth and consolidation opportunities which currently exist in the Irish PRS market. The Board believes that I-RES is uniquely positioned to take advantage of these opportunities and is actively exploring these opportunities and other commercial ventures. Continuing to work constructively with stakeholders, including government, to push for positive change in the Irish residential regulation system, most particularly the current acute restrictions on annual rent increases which, the Board believes, have had a severe negative impact on the supply of new product into the Irish rental market. Continuing to advocate with the relevant Irish authorities for changes to the Irish REIT structure to better align with progressive REIT systems in other European jurisdictions. Exploring attractive opportunities to partner, inter alia, with Irish government bodies to deliver new supply to the affordable housing market; the most relevant scheme for the Company is the Secure Tenancy Affordable Rental programme (“STAR”) and the Company is in dialogue with government agencies to support the development of a workable scheme. The Board believes the current REIT structure offers shareholders advantages over non-REIT structures, including increased liquidity, tax efficiency, and access to the exceptional dynamics of the Irish PRS market. However, certain elements of the Irish REIT structure remain restrictive when compared to other European countries, and the Company is determined to maintain active engagement with policymakers and advocate for reform. Following the conclusion of the Strategic Review, the Board remains committed to regularly and carefully assessing the suitability of our strategic direction for prevailing market conditions and remains open minded to all the options analysed as part of the Review. Co-Operation Agreement & Board Changes As announced on 8 April 2024, I-RES entered into a Co-Operation agreement with Vision Capital (“Vision”) following a period of public shareholder activism which commenced in 2023 and included the requisition of an EGM in February 2024. Vision had also submitted resolutions for inclusion at the 2024 I-RES AGM, seeking to put forward three nominees for appointment to the Board and seeking to have I-RES fund the costs of its activism campaign against the Company. Under the terms of the Co-Operation agreement, Vision withdrew its 2024 AGM resolutions and undertook to vote in favour of I-RES Board recommended resolutions (excluding those concerning material transactions) at general meetings of the Company until after the Company’s 2025 AGM. Vision also agreed to a standstill on initiating or participating in any further shareholder activist campaigns during that period. Also under the terms of the agreement, the Board recommended the appointment to the Board of two Vision nominees, Richard Nesbitt and Amy Freedman, both of which were approved at the 2024 AGM along with the proposed incumbent Board Directors. Since their appointment, Richard and Amy have participated in all Board meetings and have brought capital markets, real estate and governance skills which have complemented the existing Board skillset. Richard also directly participated in our Strategic Review, having joined the Board sub-Committee following his appointment. The agreement also provides that should Vision’s shareholding in I-RES reduce below 3%, one of the Board Directors nominated by Vision would be required to resign. Under the Company’s constitution the maximum permitted number of Directors on the Board is nine. To facilitate the appointment of Richard and Amy, executive director Brian Fagan did not seek re-election to the Board at the 2024 AGM. Mr Fagan’s position as CFO was not impacted by this change. Outlook The outlook for our business remains positive. The demand for high-quality residential rental accommodation in Ireland is set to remain robust for the medium-term, underpinning the delivery of revenues and our business model moving forward. Whilst challenges remain with regards to regulation, we believe that a more balanced and progressive system would benefit all stakeholders. We look forward to embarking on our new strategic direction as guided by the Strategic Review, whilst recognising that the divergence between the Net Asset Value of the Company and its market capitalisation remains a key challenge for the Board. As the leading scale player in the Irish residential property market, and the only company with an autonomous operating platform, we are well placed to capitalise on the many growth and consolidation opportunities which are expected to arise in the short to medium term. We look forward to the remainder of the year and engaging with shareholders on the outcomes of the Strategic Review. Hugh Scott-Barrett Chair Chief Executive’s Statement Introduction I was delighted to be appointed as CEO of I-RES in May 2024 and I believe that I have joined the Company at a very exciting and opportune time. We announced the conclusion of our Strategic Review this morning, and as we embark on our new strategic pathway what is clear to me is that significant growth and consolidation opportunities exist over the medium-term for I-RES in an exceptionally strong Irish PRS market. We look forward to implementing the findings of the Strategic Review through the remainder of 2024 and beyond. We delivered another strong operational performance in the first half of the year, driven by our scalable and best-in-class operating platform and our high-quality portfolio of assets. Our balance sheet position remains robust, and we have begun to execute our asset recycling programme which will be value enhancing for shareholders. We continued to drive our sustainability agenda in the first half of 2024 and this remains a strategic priority for the Company. Strong Operational Performance in H1 2024 Our market leading and scalable operating platform has underpinned the delivery of another strong and resilient operational performance in the first half of 2024. Vacancies across our residential portfolio remained at a negligible level, with an occupancy rate of 99.6% at 30 June 2024. Our continued sector-leading occupancy rates reflect both property management efficiencies and the underlying strength of demand for high-quality mid-market rental accommodation in Dublin. Portfolio Average Monthly Rent increased in line with our expectations by 1.4% to €1,796 at 30 June 2024 and is now estimated by our independent valuers to be c.16% below current market levels. The high reversionary potential of the portfolio, which has grown since the imposition of the 2% cap on rental increases in Ireland and represents a significant opportunity for potential future growth. Revenue, on a like-for-like basis, increased by 2.1% for the 6 months to 30 June 2024, driven by organic rental increases and supplementary revenue generation. H1 2024 reported revenue reduced by 3.3% to €42.8 million, reflecting the impact from the strategic disposal of c. 200 units completed during the second half of 2023, the proceeds of which were used to strengthen the Company’s Balance Sheet. Net Rental Income (“NRI”) increased by 1.9% on a like for like basis in H1 2024, with margins broadly in line with H1 2023 on the same basis. This illustrates the positive impact of moderating inflation levels in Ireland and continued rigorous cost control by management. The impact of 2023 disposals resulted in reported NRI reducing by 4.6% to €32.7 million. Our market leading platform retains considerable operating leverage and is well positioned for increased scale in the future. The EBITDA generation from our underlying business continues to be robust and demonstrates the cash generative and highly recurring nature of our business model. Income associated with the 2023 strategic asset disposals, the impact of which is expected to be less pronounced in the second half of 2024, and a slight increase in temporary General & Administrative costs, saw Adjusted EBITDA decline by 7.3% to €26.6 million. These headwinds have been offset by an improved inflationary environment and ongoing robust cost control initiatives including ongoing digitalisation of our service offering. The impact of higher prevailing interest rates during the first half of 2024 compared to the corresponding period in 2023 negatively impacted financing costs but this was offset by a reduction of higher cost debt through the deployment of proceeds from the strategic asset disposal programme in 2023. Finance costs decreased by 10.0% to €11.9 million in the period while Adjusted EPRA earnings decreased by 5.3% to €14.2 million. The portfolio saw a marginal outward shift in yields during the first half of 2024, stemming principally from expectations of slower than anticipated cuts to interest rates. Our ability to meaningfully offset movements in yields through rental growth and realisation of the portfolio’s reversionary potential remains restricted by current government regulations, which continue to cap increases in Rent Pressure Zones at 2%. Capital Management and Portfolio Optimisation The Group’s Balance Sheet remains robust, with excellent visibility of future financing requirements. 83% of our drawn debt is fixed against interest rate movements at an attractive blended rate of 3.27%, with no debt maturities until April 2026 and laddering thereafter out to 2032. We are pleased to maintain our dividend payout policy of 85% of distributable earnings in line with Irish REIT regulation and have proposed an interim dividend for 2024 of 1.88 cents representing 85% of our relevant distributable earnings in the period. Moving forward we intend to continue to pay, in line with REIT legislation, 85% of relevant earnings as a dividend to shareholders. Our Net LTV at 30 June 2024 stood at 45.4% (31 December 2023: 44.3%), comfortably below the 50% limit set by Irish REIT regulations and our debt covenants. The impact of marginal yield expansion during the period was partially offset by individual unit sales completed at a significant premium to latest book values, the proceeds of which were used to reduce higher cost debt. Post period end, we have successfully contracted and completed for the disposal of another 5 units, also at a premium to latest book values. As outlined in this morning’s announcement which concluded our Strategic Review, we have identified c. 315 units, or approximately 8% of our portfolio, which is suitable for disposal and is expected to generate between €110 and €115 million of proceeds based on current estimated OMV. Disposals are expected to take place over a 3 to 5 year period as turnover of current tenancies is a prerequisite for the disposal of these units under Irish law. Factors contributing to suitability for disposal include assets located in properties that are not wholly controlled by I-RES and assets with upcoming capital expenditure requirements. This ongoing strategy is expected to be value enhancing and optimise overall portfolio quality. Disposal proceeds will be reallocated in line with our capital allocation strategy, initially reducing higher cost debt, actively managing LTV through the cycle and within the required levels of the Irish REIT rules and debt covenants, whilst retaining flexibility for initiatives which are accretive to the Company’s earnings profile over time. Regulation Remains a Significant Challenge Current Irish rental regulation remains the single most inhibiting factor for our business. The 2% cap on rental increases, originally intended to protect residents, has had a profound impact on the supply of new build-to-let properties in the market and is now resulting in significant and sustained open market rent growth. The lack of available rental accommodation also raises questions over Ireland’s position as a leading European destination for FDI. We welcomed the findings of the Housing Commission in May of this year, which recommended in favour of significant reform to the current rental regulatory structure, including a revised system where percentage rent increases would take account of several relevant factors such as management and maintenance costs, interest rates, and affordability. However, noting the complexity of the Irish Housing system, the detail of any new regulatory system is very important. As highlighted in a separate Department of Finance report in June, rental regulation is accepted by capital market investors as part of the housing market in most European countries, but the bluntness of the current 2% cap, which does not allow a reset of rents to market rates when a new tenancy commences at an existing property, makes Ireland an outlier and disincentivises institutional capital investment. We also welcomed the findings of the Department of Housing’s review of the PRS sector in July, which raised several critical observations of the current regul
