Irish residential property investment is showing signs of a revival after several difficult years, and Irish Residential Properties REIT CEO Eddie Byrne expects the recovery to gather pace as rental regulations begin to feed through into valuations and returns.

“It’s early days, but we are starting to see the benefits of the new residential rent regulations,” Byrne told Bisnow in an interview after first-half results.

The company said operational performance improved, meaning its total accounting return rose to 6.8% from 2.8% a year earlier.

“That’s also starting to be reflected in our portfolio valuation,” Byrne said. “We’re still trading below net asset value, but the gap is closing.”

IRES, Ireland’s largest private residential landlord, has more than 3,600 homes, predominantly in Dublin. Its latest results were published Friday, showing a 5.8% increase in EPRA earnings per share in the first half.

Like-for-like annualised passing rents increased 2.1%. The residential landlord also improved its net rental income margin to 78%.

The stronger operating performance fed through to shareholder returns, with net asset value per share rising 5.4% to 139 cents.

IRES announced the acquisition of 77 new homes, forward-funded through proceeds from its ongoing asset recycling programme.

The improving backdrop is visible in the wider investment market. CBRE Ireland reported that residential was the second-largest real estate sector after offices in the first half, accounting for about 31% of H1 investment, with activity spanning private rented, social and student housing.

For Byrne, the significance is not simply the increase in transaction volumes but also the long-awaited return of institutional capital.

“Across the industry, first-half sales were up at their highest since 2022, and I expect to see that momentum continue going forwards,” he said.

“One of the things we wanted to see is more international money attracted to Ireland, and there is early evidence that that’s the case,” Byrne said, adding that the company was still interested in potential joint ventures.

IRES REIT intends to remain selective about acquisitions, with the size and quality of individual opportunities more important than any arbitrary portfolio target, Byrne added.

He said he hopes to see more forward-funding deals in the pipeline, whereby IRES can commit capital to developments and allow developers to progress construction.

“We will definitely look to do more forward funding, because that’s an easy process for us using our own capital, and it enables developers to get on with construction and move forwards with their next projects, which also means we can play our role encouraging more development,” he said.

The strategy also reflects the structural shortage of rental housing in Ireland. IRES has said the new rental rules should stimulate investment and development by allowing rents to reset to market levels when tenancies change, while existing tenancies remain subject to the new six-year framework.

The company has said its rents were around 20% below market value and that the embedded reversion could gradually increase rental income over at least a decade.

Byrne is also looking to use asset recycling to upgrade the quality of the portfolio. It is selling off energy performance certificate C- and D-rated homes, on which it is achieving a yield of around 4%, and buying A-rated properties at around a 5.25% yield, he said. It announced two years ago that it would look to sell around 300 properties in the subsequent three to five years, and it has stayed on that track.