Paul O'Donoghue

THERE IS NO getting around it – rent hikes are on the way for thousands of Dublin apartments.

Ires REIT, Ireland’s biggest private landlord, is set to be bought out by US investment firm Barings in a €726 million deal.

The new owner will almost certainly move as quickly as possible to raise the rents charged to tenants in an effort to generate higher profits.

After all, this opportunity is likely the single biggest reason why Barings is interested in Ires and its 3,600 properties in the first place.

What happens once Barings takes over will be a live test case of the impact of Ireland’s new rent rules.

These allow landlords to reset rents to market value between tenants, getting around rent caps.

Essentially, this will allow Barings to slowly raise prices across the Ires portfolio as old tenants leave and new ones move in.

The government has repeatedly said that the aim of the new rules is to stimulate private investment in the rental market. I.e., get private investors to build more rental properties and boost supply.

But the case of the Ires sale will function as a test of what happens when a company already owns thousands of apartments.

Will the new owner use the opportunity to reset rents to invest in its business?

Or will it just siphon off the extra profits to executives and shareholders? Let’s look at some of the key issues.

In 2024, Ires REIT was in the doldrums. Its share price was down, and its own investors were trying to oust the company board. Its stock went as low as about €0.84, giving the business a value of around €445 million – well below what Barings is now paying.

So, why the uptick in its value?

As alluded to, the key reason is the change in Ireland’s rent rules.

This has been well covered previously, but the long and short of it is that previously, a rent cap applied to large areas of the country. Landlords could only raise prices by a maximum of 2% per year. This, of course, included Dublin, which is where almost all of Ires’s portfolio is located.

This cap is well under the rate of general rent price inflation, which has been somewhere between 5% and 8% per year since 2021.

As a result, the prices across the Ires portfolio have increased at a rate lower than what they could have. The company charges an average monthly rent of about €1,850 to its tenants. It reckons this is about 20% to 25% below the market rate. This implies that prices could theoretically rise to somewhere between €2,200 and €2,300 before impacting demand. Ires has zero problem here – 99.5% of its apartments are occupied, which indicates that it has plenty of scope to raise rents.

Minister for Housing James Browne Alamy Stock Photo Alamy Stock Photo

This year, the government introduced new rules which allow landlords to ‘reset’ rents between tenancies (if the previous tenant left voluntarily or breached obligations) or at the end of a 6-year tenancy cycle.

‘Reset’ here effectively means ‘raise the price’. For example, a tenant could be paying a rent of €1,900 per month in an Ires apartment. Once they leave, Ires (or now Barings) could ‘reset’ the price to the going market rate. In most cases for the Ires apartments, the market rate will almost certainly be significantly higher – say €2,300.

It will take some time for the company to do this. It essentially has to wait for old tenants to leave before it can charge the higher prices. Ires estimates that somewhere from 10% to 14% of its ‘turns over’ like this per year.

But already, we can see how investors are salivating at the thought of hiking prices.

Ires’s profits tripled in the first half of 2026 versus 2025. This was driven largely by a revaluation of its assets, showing optimism that the company’s portfolio is more valuable now with the new rent rules in place.

Ires has also said the new rules can boost its rental income ‘with additional minimal costs’.

Barings has not said much publicly about what it intends to do with the Ires portfolio. But it will almost certainly proceed down the path which Ires laid out to investors – raise rents by as much as it can, as quickly as it can.

Where will the profits go?

What will be interesting is what will happen to the extra cash generated from these rents.

Ires was already generating earnings of about €30 million per year after costs from its portfolio, before the rent rule change.

If the rent it charges at 10% of its tenancies rises by 20% – 25%, the company stands to get an extra €2 million a year, give or take.

Ires previously said that this extra money will allow for “more apartment building”.

But will Barings follow suit?

The rent cap of 2% applies to existing properties but not to homes where construction started after June 2025. Alamy Stock Photo Alamy Stock Photo

As a REIT, Ires had to distribute 85% of its property earnings to shareholders. Barings will not face the same restrictions, giving it more flexibility on how to spend the cash the apartment portfolio produces annually.

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The new rent rules have an important clause. The rent cap of 2% applies to existing properties. But it does not cover homes where construction started after June 2025.

The idea is to “attract investment in apartments and increase rental supply”, the government has said, by essentially allowing investors to charge higher rents in new-build homes.

If Barings gets an extra €2 million per year from the Ires portfolio, on top of the €30 million or so it already generates, will it use that cash to build new homes?

Or just sweat the existing 3,600 Ires properties, while investing as little extra money as it can?

There is also a question around investment in the old Ires portfolio.

The properties have an average age of 18 years. While that is not old, all properties need money for maintenance to prevent them falling into poor condition.

The Society of Chartered Surveyors Ireland previously estimated that apartments should budget €2,000 per year for a sinking fund to cover major repairs. For the 3,600 strong Ires portfolio, this works out at about €7 million annually.

And owners, such as Ires and Barings, could face additional costs.

These could include replacing kitchens and bathrooms, or redecorating.

Ires has spent under €10 million on capital investment over the last two years. The company has not necessarily under-invested – again, 18 years is relatively young. The buildings may not need much work to service.

But it is an area where the extra money from higher rents could be well-spent, boosting standards for tenants while increasing asset values for Barings.

This is the heart of the tension with Ireland’s new rent rules. They essentially guarantee that prices will significantly rise at many apartments, such as those Barings will soon own.

But the real question is where the money will go after that.

The hope will be that it either flows into building new apartments, or improving standards in existing ones.

But the pessimists out there may suspect that the extra money will simply flow back to Barings and its owners.

Either way, the deal will present a major test of what impact Ireland’s new rules have on the rental market. As the country’s biggest private landlord, a host of politicians, analysts and economists will be watching closely.