A shareholder in Ires Reit, the State’s largest private residential landlord, said it plans to vote against the re-election of the company’s chairman and a number of other directors at its upcoming annual general meeting (agm), saying its pleas to explore a sale of the “undervalued” company have been ignored.
The shareholder, Vision Capital Corporation, with a 5 per cent stake, said in an open letter to fellow investors, published on Wednesday, that the real-estate investment trust (Reit) should become a private company “with a different corporate and capital structure”.
“It is noteworthy that the Irish Reit market never flourished as it was hoped it would when legislation was passed in 2013 and has, to the contrary, contracted with the privatisation of Green Reit and Hibernia Reit, as well as the sale of Yew Grove Reit,” Vision Capital said.
“A dedicated investor base has never emerged and, as a result, European investors have not been incentivised to focus on Irish Reits as they became a very small part of core European benchmarks.”
The board of Ires said that it “notes the open letter” and that it “will respond in due course”. The agm is due to take place on May 4th.
Ires shares rallied almost 4 per cent on Wednesday, to 97.7 cents, but remain down 35 per cent over the past 12 months.
Vision Capital said that it has been a shareholder in Ires since 2014 and has been privately airing its concerns with the company since July 2021. It highlighted that the stock has been trading for some time well below its underlying net asset value, with its 94 cents closing price on Tuesday representing a 44 per cent discount to its own year-end assessment of its value.
“The initial communication in July 2021 set forth Vision’s thoughts and observations and the need for fundamental change at Ires, requesting that the Board formally resolve, and publicly announce its intention, to explore value-maximising transactions for the benefit of all Ires shareholders and retain financial advisors to do so, given the current market value of the ordinary shares at the time did not reflect the market value of the REIT’s portfolio and its platform,” it said.
Vision Capital said that it had planned to table resolutions at Ires’s agm last year, including one that the company put itself up for sale, but withdrew these when the chairman promised to address the investor’s concerns.
It claimed that the decision to pull the resolutions was “based on the understanding that the company was to consider a strong, shareholder-aligned candidate” as a director and provide an update to the market by last summer “on all options and activities in relation to the board addressing the concerns that Vision had been expressing since July 2021″. This did not happen, it said.
