A report from the Department of Finance shows that 50 “large residential landlords” own more than 40,000 rental units built or under construction in Ireland, and that these landlords, often investment funds, own 46% of apartments built between 2017 and 2023, while private households own just 13%.
The report, Providing stability and certainty for investment in property in Ireland, from the Department of Finance said that “sourcing verifiable data was a significant challenge” and that “to this end the Review Team has built a dataset of the ownership of housing units in Ireland by large residential landlords, working in conjunction with Knight Frank; verifying data through a mini-survey of a cross-section of large landlords; and cross-checking with Tailte Éireann, the Building Control Management System and company records in Ireland and Luxembourg”.
“The Review Team’s dataset includes roughly 50 landlords owning 34,000 completed rental units with a further 6,600 under construction as at April 2024. The dataset is extremely valuable but is incomplete as there may be large landlords not included and for those who are included some data may not be verified, or verifiable,” the report said.
“The dataset estimates that 20,500 units of private rental stock have been built from 1 January 2017 to 30 April 2024 for, or by, these large landlords, consisting of around 19,000 (92.5%) apartments and 1,500 houses (7.5%).”
“The 17,000 apartments built between 2017 and 2023 accounts for 46% of the 37,500 apartments built during that time.200 A further 13% were sold to households leaving 41% as a residual, the vast majority of which will have been built for social or affordable uses by AHBs and local authorities,” it outlined.
Looking at the scale of investment funds domiciled in Ireland, the Department said that “the size of the investable commercial property sector is unknown”.
“The Central Bank estimates that the value of professionally-managed, portfolio investible CRE market could be in the range of €55-60 billion. This figure includes €29 billion held by Irish investment funds (a subset of which are IREFs), €3 billion by insurance companies and €1.3 billion by REITs.”
An IREF is an Irish Real Estate Fund which can be made up of Irish or international investors.
“Separately, Revenue data from the IREF returns shows that €28 billion of Irish property assets were held in IREFs at end 2022, €8 billion of which was residential. This excludes any investment funds domiciled outside Ireland,” the report said.
“Feedback from stakeholder engagement and reports published by property agents indicate that a material quantum of the investors in residential assets since 2017 are pension funds and insurance firms investing for a stable income. This is in contrast to distressed credit investors who invested in non-performing loans in Ireland from 2009 to 2016,” the report continued.
“The current investor base includes, APG (Dutch pension fund), Hesta195 (Australian pension fund), Nuveen-TIAA (Canadian pension fund), Allianz (German insurer), Patrizia (German asset manager), M&G (division of Prudential), Abrdn (UK investment manager) and the ILIM managed Irish Residential Property fund on behalf of its investor clients. Axa Real Estate is a co-investor in IREFs managed by Kennedy Wilson.”
They said that funding for property in Ireland “also comes from investment funds managed by asset managers, mainly headquartered in the US – examples include Hines, Starwood Capital, TPG Angelo Gordon and Ares – which are, in turn, funded by pension funds, insurance firms, corporates, SWFs and HNWIs.”