Mapping Dublin’s growing constellation of company landlords

In the last three years, institutional investment into Dublin’s rental sector has soared.

This means that – while the vast majority of rentals are still owned by landlords with a couple of properties here and there – more big companies based in places like Luxembourg or Frankfurt are pulling together and prepping portfolios of hundreds of homes in Dublin.

In 2017, institutional investment in bulk buys of apartments in the city grew from €0.4 billion in 2017 to €2.4 billion in 2019, shows data from Real Capital Analytics. It fell slightly last year during the pandemic to €1.4 billion.

Mapping the rental properties of 17 of Dublin’s biggest landlords illustrates how a lot of this money has been spent, and the changing make-up of ownership of rentals across the county.

Choose a landlord from the drop-down menu to highlight their properties. Click on a dot/property for details.

Not all of the properties owned by these landlords are mapped. Company records, annual reports and other sources sometimes give numbers of properties but not addresses.

A recent CBRE report estimates that more than 15,550 “residential units” are under institutional ownership in Ireland. (They still account for less than 5 percent of tenancies.)

The properties mapped here include more than 12,205 apartments and homes in Co. Dublin. It isn’t always clear how many apartments fit in some buildings, particularly the older Georgian terraces.

Buying Up What’s There

A February 2019 report from the Department of Finance notes strategies for investors in rentals: they buy existing buildings, buy planned buildings or those under construction through “forward purchase” agreements, or “forward-fund” a developer to build a block.

The UK experience shows that initial investment “tends to focus on purchasing existing stock. Once familiarity with the market is achieved, firms then begin to forward fund and forward purchase new stock”, the report says.

That mirrors the data on the map. Of the 12,205 apartments and homes mapped above, 76 percent already existed when the big institutional investor that now owns them bought them.

Those existing homes include blocks like Wolfe Tone Lofts built in the late 1990s and now owned, after a refurbishment, by Avestus Capital Partners.

They also include older buildings, portfolios of the inner-city Georgian buildings that are carved up into apartments, which are owned by Orange Capital Partners and Heitman and, in some cases, LRC Group.

Orange Capital Partners’ portfolio includes more than 530 apartments in inner-city Georgian terraces, bought in batches from a joint venture made up of Lugus Capital and Bain Capital.

The joint venture bought buildings and refurbished them. In some cases at least, as at 54 and 56 South Richmond Street, it evicted sitting tenants, although those properties have not yet been sold on, according to the Property Price Register.

Heitman has a similar portfolio of small renovated flats in old buildings – bought, it seems, from a different previous owner, but rented out through Grayling Properties, the same property managers used by Orange Capital Partners.

The sales prices for these properties rose massively between their sales to the previous owners and the onwards sale a couple of years later to Orange Capital Partners or Heitman.

Rents have also risen.

In 2017, the average rents for flats at 31 South Circular Road were around €590/mo, figures in a sales brochure suggest. In a recent advert on Daft.ie for a 23sqm one-bedroom at the same address, the rent listed was €1,450/mo.

Other Waves

Beyond that 76 percent of properties of the 12,205 homes on the map that existed when the big players bought them, another 8 percent were new builds by the current owner, and 13 percent were forward-purchase arrangements.

Another 2 percent fell into the “other” category, and included properties such as those only partially built when acquired or apartments converted from space originally meant for creches, and it was unclear for the remaining 1 percent.

That mix may change going forward and – if planning applications are anything to go by – the concentration of the rental market is set to accelerate.

Since 2018, planning permission has been granted for more than 10,800 build-to-rent homes within the Dublin City Council area alone, show figures from the council press office. (They may not all end up being built.)

The CBRE report says that in 2020, 32 percent of deals comprised “standing stock trade”, while “forward-commit transactions” accounted for 54 percent of spend in residential investment, up from 47 percent in 2019.

While there is and will still be interest in existing properties, there aren’t loads to buy, says Marie Hunt, head of research for CBRE Ireland.

“That’s forcing people in turn, if they really want to get their hands on assets, they have to go into these forward-commit or forward-fund processes in order to get their hands on new stock,” she said.

Also, funds coming in have “ESG” at the top of their agenda, says Hunt, meaning “environmental, social, and corporate governance”. “They will want brand new stock where possible, because they don’t want to have to buy all this stuff and retrofit,” she said.

Some of these investors are common to cities across Europe.

Maedhbh Nic Lochlainn, a PhD student at Trinity College Dublin who has been exploring institutional investors’ strategies in the rental market, says she sees two waves of money coming in to Dublin.

“Firstly, the acquisition of existing developments. It doesn’t add supply,” she says, and she thinks that it probably drives up homelessness. “It’s just leveraging value from what’s already there,” she says.

A second wave of money goes into purpose-built rental developments. “It’s very very expensive,” she says. “It’s unaffordable rental supply and it becomes a question of is that what we need in the Dublin market?”

Take Kennedy Wilson’s new builds. At Capital Dock, two-bed apartments are listed at €2,970 a month, one-beds at Clancy Quay are listed for €1,700 a month, and Vantage Apartments new build has one-beds from €1,750 a month.

At Comer Group’s plush new build at One Ballsbridge, meanwhile, rents for two-beds start at €4,000 a month.

Across the city at Northwood Avenue, where Round Hill did a forward-purchase arrangement in 2019 for 216 homes in Santry, rents for available apartments start at €1,920 for a two-bed apartment.

Further out of town, at one of Urbeo’s new developments in City West, rents start at€1,650 for one-bed apartments.

The Central Bank has been working on research examining how institutional investment affects rental-market dynamics.

In particular, researchers are interested in whether institutional landlords differ in rents charged or tenancy lengths, according to the title of a presentation released under the Freedom of Information (FOI) Act.

But that research is still at “an early stage”, said a spokesperson. Most detail of the research so far was blacked out, in a recent FOI response, although there was the odd glimpse into considerations.

“Institutional investors tend to supply apartments at the premium end of the market, unsuitable for people on average incomes,” said one Central Bank researcher in an email to colleagues.

“This preference for constructing and purchasing premium residential properties leads them to charge more due to build quality and it is important that we are able to isolate this effect,” they said.

Which Neighbourhoods?

The Dublin map shows clusters of bigger properties in the Docklands, Sandyford, Tallaght and Santry – but also a smattering of smaller properties around Portobello and Rathmines.

That fits with data from the RTB for the end of 2019 that found that in 12 local electoral areas in Dublin, more than 20 percent of tenants had company landlords.

It also fits with a recent CBRE report that says: “Prime districts such as the Dublin docklands and prime areas of the south suburbs is where we have seen much of the investment and development activity to date.”

“The supply pipeline for the coming years shows a healthy amount of stock oncoming in both the north and west suburbs and we anticipate these locations will see a greater proportion of investment activity going forward,” it says.

Nic Lochlainn says that one danger that comes from the concentration of ownership of rentals in neighbourhoods is the power that gives the big owners over rents.

She saw it in cases in the RTB in 2015 and 2016, she says, when Ires REIT was successful in arguing big increases were in line with market rents as they had similar apartments where people were paying the same.

When big blocks are built, it also tips the balance of market rents away from the lower existing rents towards new-build rents, she says.

More broadly, whether it matters if neighbourhoods are dominated by big complexes comes down to a fundamental question, says Joseph Kilroy, the policy and public affairs manager at the Chartered Institute of Building.

What kind of city do Dubliners want? “You need to ask yourself, what are the kind of city’s values so to speak,” says Kilroy.

You could take the line that lots of build-to-rent apartments means more homes and nothing else matters, so that’s a good thing, says Kilroy.

But “people do seem to value community and kind of long-term residents, and you know, the social capital that people living next to each other for long periods of time creates,” he says.

In a rental sector with fixity of tenure and stable rents, it may not matter so much, he says, as those rental homes would be a sustainable option for people to actually live in over the long term.

But despite Ireland’s rental sector changes in recent years, he says, “it still hasn’t resulted in a rental sector that is stable for people who are living in it”.

Hunt, head of research at CBRE in Ireland, says the investment should be welcomed and that tenants will arguably get a better offering from an institutional landlord.

“Bigger institutional players are expert at managing these, they manage them in other jurisdictions, and they have all of the economies of scale,” she said.

Not all tenants say they prefer big institutional landlords, though, with some raising issues around maintenance requests, confusion over who to contact in cases when there are layers of contractors, and inflexibility around rent relief.

Hunt says there’s also a desire among developers and planners to create mixed-tenure developments, she said.

“So you may well get a large scheme with lots of blocks and lots of units. Part of it could be social leased to the local authority, part of it could be private, you know, built to sell, part of it could be build-to-rent multifamily,” says Hunt.

“And then you have all these different tenures and topologies mixed in together. And that’s better for building sustainable communities rather than over concentration of one particular goal origin and one type of housing,” she says.

Paradoxically, says Nic Lochlainn, the PhD researcher at Trinity, more concentration of ownership may also mean tenants organising more easily.

“Institutional landlord developments are a concentration of tenants with kind of a one target against whom to organize in many ways,” she says.

A Look Ahead

Mick Byrne, a lecturer in the school of social policy at University College Dublin, said he recently reviewed about 50 industry reports on market trends. His takeaway?

There is an enormous appetite for international capital to invest in the private-rental sector, he said.

The institution-owned private-rental sector wasn’t impacted that badly by Covid, based on vacancy levels and rent collection, he says. “At least not compared to other comparable assets.”

The reports all generally make the point that there’s a supply-demand imbalance for homes, and an affordability problem around homeownership, he says. “And therefore, you’re gonna have, basically, there’s gonna be a long-term demand for rental housing.”

“The other side of the coin is the international monetary policy, the low interest rate environment that is having a huge impact,” he says.

“There’s a lot of talk about PRS [the private rental sector] going from being what they call an alternative asset to be what they call a core asset,” he says.

“I think that potentially quite a big, long term, medium to long term, phenomenon happening,” he says.

Kilroy, of the Chartered Institute of Building, says the context driving this is important. “In comparison to traditionally safe investments, property has become the safest investment.”

Hunt, the head of research for CBRE, says she thinks there’s room for both big and small landlords in Ireland.

“But definitely over the next few years, what you will see is, the small private landlord, or one or two units will start to shrink, and you’ll see more institutional ownership,” she says.

“But still, in the overall scheme of things relative to what proportionality looks like in other jurisdictions,” she says, “we’re still, you know, at the very embryonic stage of this.”

This article was written as part of the project “Cities For Rent: Investigating Corporate Landlords Across Europe”, which was coordinated by Arena for Journalism in Europe.

Its production was supported by a grant from the Investigative Journalism for Europe (IJ4EU) fund.

The map service MapTiler also supported the joint project as a mapping partner.

You can read more stories from across Europe here.