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Investor CAPREIT Sells Final Stake In Ires To Focus On Canada

CAPREIT has sold its final stake in Irish apartment specialist Ires REIT.

Canadian Apartment Properties REIT has sold the remainder of its equity interest in Irish Residential Properties REIT to refocus on Canadian investment.

The company had been steadily reducing its holdings in the Irish business it founded, and during the first quarter of 2024, CAPREIT said it had sold Ires REIT shares for aggregate proceeds of around $58M, reducing its ownership from 18.7% to 11.3% as of 31 March.

During the second quarter, CAPREIT confirmed it had sold another $81M of shares, marking the complete disposal of its stake. CAPREIT said in a statement that it intends to use the proceeds to repay amounts drawn on its Canadian credit facility, repurchase CAPREIT units at a discount to net asset value, and acquire “strategically aligned properties.”

The divestment was carried out by Goodbody. With CAPREIT’s exit, several international investors have been building larger stakes in Ires. London-based Asset Value Investors has acquired a 6.3% holding, Dutch investment firm Ophorst Van Marwijk Kooy Vermogensbeheer has increased its stake to 1.5%, Barclays has increased its interest to 1.5%, and Goodbody’s stake has doubled to 2.9%.

CAPREIT assembled the original Ires portfolio of 338 apartments and managed its initial public offering in 2014. Its final tranche of 50 million shares sold at €0.90 each, less than the €1.32 per share Ires valued its net assets at as of the end of last year.

“Our business has historically been rooted in the provision of high-quality rental apartments for Canadians, and that remains our primary purpose today,” CAPREIT CEO and President Mark Kenney said in a statement. “In line with that, we’re pleased to have now completed a full exit from our investment in Ireland.”

The share sale comes amid a strategic review by Ires after it agreed on a truce with activist investor Vision Capital, which secured two board seats as part of a settlement over the company’s future. The latter had been supported by CAPREIT in an unsuccessful bid in February to replace five Ires directors and secure a mandate for the sale or breakup of the company.

Ires REIT’s strategic review is being led by Chairman Hugh Scott-Barrett and CEO Eddie Byrne, and the company warned in late April that any move to sell its assets in this environment “would be challenging to maximise value for shareholders in the short-term.”