Ireland needs institutional investment to significantly expand housing supply - IIP New research from Irish Institutional Property suggests significantly expanded housing supply not possible without substantial funding support from institutional investors. Ireland needs to attract more international development capital in the years to come if it is to meet the housing needs of its growing population according to new research. Notwithstanding the expanded role of the State and continued funding from a smaller domestic banking sector, approximately 60% of the necessary funding must come from international investors. The research is from Irish Institutional Property (IIP), the voice of institutionally financed investors with significant international backing in the Irish real estate market. Among the research's key findings are. 2022 saw the highest annual housing output in the State since 2006. International capital has played a significant role in that increased output. A combination of macroeconomic forces and local factors - such as the continued dysfunction in our planning system and the current rental cap – have negatively impacted institutional investor sentiment towards Ireland. The rental cap in particular is not in line with international best practice and discourages investment in, and provision of, increased housing supply. There are significant volumes of institutional capital available and ready to be deployed when the overall investment climate improves - volumes which cannot be replaced by domestic sources. An increase in housing output will require a disproportionate increase in international investment capital, as domestic sources are limited by definition. The findings come on foot of ESRI estimates of total housing output in 2023 of 32,500 units. Speaking upon the publication of the research, IIP Chief Executive Pat Farrell said; This new research from IIP shows that while state investment is at a record high- and rightly so- international capital, like that provided by IIP members, accounted for most of the finance provided to develop housing in Ireland. More importantly, perhaps, the research shows that as we attempt to ramp up housing output in the years ahead, so too the need to attract institutional capital investment will intensify. Whilst the State's flagship Housing for All policy targets 40,000 units per annum by the end of the decade, a number of informed sources- including Taoiseach Leo Varadkar in July of this year - said that the targets should be around 60,000 per annum. In this latter scenario, our research estimates that total investment capital of €18.5bn would be needed annually to deliver this target, over 61%, or €11.3bn of which would have to be provided by institutional investors. This provides further evidence of the need for policy stability and predictability which supports the continued deployment of international capital here to ensure we can effectively tackle the housing crisis and deliver the required output of homes needed to provide a sustainable housing sector which meets the needs of all who require a home. ENDS About IIP IIP is the voice of institutionally financed investors with significant international backing in the Irish real estate market. IIP members manage c.€20bn of Irish property. IIP members directly employ over 6,000 people. IIP members indirectly employ a further c.23,000 people * IIP tenant companies employ more than 36,000 people. IIP members include four of the largest 20 stocks on Euronext Dublin (formerly known as Irish Stock Exchange) *Estimate based on indirect and induced jobs within European listed real estate sector. Source: EPRA & PwC Media contact Steve Lynam Q4PR 087-2354126

IIP Pre-Budget Submission - 2024 Irish Institutional Property (IIP) is the voice of institutionally financed investors and real estate providers with significant local and international backing in the Irish real estate market. The mission of IIP is to promote the development of a progressive world class real estate sector in Ireland, which benefits members, the economy and wider society. IIP members are backed by a diverse group of investors, including Irish and international pension funds, among others. Post the Global Financial Crisis (“GFC”), institutional capital has become a significant component of both the global and Irish real estate markets, providing stable long-term funding to enable sustained delivery of the required supply of critical infrastructure, housing and workplaces. This capital has now largely re-structured and replaced the “highly leveraged” model of the past, supported by government policies which enabled the establishment of REITs and other tax transparent structures. These developments were necessary to put Ireland on par with other OECD countries that recognises capital intensive activities such as real estate, need stable and more conservative capital structures to avoid the debt fuelled boom and busts of the past. Since 2015 IIP members, have collectively invested c.€20bn in delivery of critical real estate in the Irish market Download Report

IIP Opening Statement to Oireachtas Housing Committee – 14/02/2023. Irish Institutional Property (IIP) is the voice of institutionally financed investors and real estate providers with significant local and international backing in the Irish real estate market. The mission of IIP is to promote the development of a progressive world class real estate sector in Ireland, which benefits members, the economy and wider society. IIP members are backed by a diverse group of investors, including Irish and international pension funds, among others. Post the Global Financial Crisis (GFC) institutional capital has become a significant component of both the global and Irish real estate markets, providing stable long-term funding to enable sustained delivery of the required supply of critical infrastructure, housing, and workplaces. This capital has now largely re-structured and replaced the “highly leveraged” funding model of the past. These changes in the funding model were necessary to put Ireland on a par competitively with other OECD countries that recognises capital intensive activities such as housing and related real estate, need stable and more conservative capital structures to avoid the debt fuelled boom and busts of the past. Download Report

Pre-budget submission 2023. Irish Institutional Property (IIP) is the voice of institutionally financed investors and real estate providers with significant local and international backing in the Irish real estate market. Download Report for IIP Budget Submission 2023

Pre-budget Submission 2021. Irish Institutional Property (IIP) is the voice of institutionally financed investors and real estate providers with significant local and international backing in the Irish real estate market. Download report for IIP Pre Budget submission 2022

Irish Institutional Property welcomes publication of Housing for All  2 September 2021 Irish Institutional Property (IIP) welcomes today’s announcement by the Government which marks the most significant commitment of investment ever by the State in housing provision. While institutional investors and the private market generally will continue to play a central and dominant role in the provision of housing, it is only through a complementary public sector effort of the scale signalled today that we can successfully tackle the current housing deficit and begin to deliver on our shared objective; to generate the sustained levels of housing output needed to fully meet the needs of a growing population. However, while Housing for All represents a welcome fresh start, in order to ensure the right conditions for success both the public and private sector must in the short to medium term overcome a number of critical challenges if we are to achieve success. In that regard, the Government needs as a priority to radically overhaul the current planning system to ensure it is fit for purpose and clear bottlenecks impeding the roll out of critical housing related infrastructure.

IIP Statement on role of Institutional funds in Housing Issued 07 May, 2021. The controversy of recent days has served to again sharpen political and media focus on the role of institutional investors in the housing market. Given the importance of the topic and its impact on all our lives this is very understandable in the circumstances. However, its important that the current debate is informed by facts rather than the emotion of the moment. If we are to effectively tackle our housing challenge institutional investors are part of the solution not part of the problem. Irish Institutional Property (IIP) members have to date invested over €14bn in the Irish market, providing much needed offices and workplaces, retail, hospitality, and most importantly housing. Our approach to the housing market is focused on providing much needed supply and we are long term investors. We do not believe it is acceptable to offer houses for sale to the general public, inviting people to start to plan their finances to buy a house and then to withdraw them at short notice. Where it is viable to do so, we would support the concept of a percentage of houses in a residential estate development being required to be available for sale to first time buyers and individual home purchasers generally. Institutional investment is critical to Ireland's economic and social progress and this capital is not available from any other source. Ireland today needs to source 80% of all real estate capital from internationally backed institutional investors. Our dependency on such capital will be further heightened following the announced departure of both Ulster Bank and KBC from the market shortly. Likewise, we need to be equally mindful of the stresses and demands weighing on the State’s balance sheet post the pandemic. Investors, whether they invest directly in property or via an “institutional structure” ultimately pay all taxes. The institutional structure, however, allows for smaller investors and pension investors to access more professionally managed and larger investments, than if they invested directly themselves. These tax measures were introduced some years ago to attract more local and international capital into “collective investment” structures, moving away from the highly leveraged risky models that led to the property bubble and subsequent crash. Prior to their introduction, pension funds and international investors were not attracted to invest here because they would have been subject to double taxation. The tax regimes and structures applicable here for institutional funds are similar to those existing in other developed economies and across Europe who like us compete for international capital to fund their real estate needs. Without them access to international capital would virtually dry up. This is something Ireland cannot afford. Institutional investors are funded , in the main by pension funds who take a long-term view and are seeking moderate returns over that timeframe. Institutional investors began entering the market around 2010 and many have now been here for over a decade and plan to be here for decades to come. They are not short-term investors as has wrongly been portrayed by some commentators. Institutional investors are net sellers of additional new homes to the Irish market both for sale and for rent and that would otherwise not be built. IIP members include the largest house builders in the State who have currently in planning or course of construction 12,000 homes, approaching over 50% of total private market output. The majority of this output is for sale to individual home owners. It is important that the ongoing debate on housing is informed by facts rather than emotion and that public policy responses to address the housing issue are similarly informed. To do otherwise will set back our objective of effectively addressing our current housing challenge by decades.

Pre-budget submission 2021. Irish Institutional Property (IIP) is the voice of institutionally financed investors and real estate providers with significant local and international backing in the Irish real estate market. Download Report

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