Results for the Year Ended 31 December 2020

RNS Number : 6499P

Irish Residential Prop REIT PLC

19 February 2021

19 February 2021 [1]

LATEST RESULTS

IRISH RESIDENTIAL PROPERTIES REIT PLC

RESULTS FOR THE YEAR ENDED 31 DECEMBER 2020

Irish Residential Properties REIT plc ("I-RES" or the "Company"), an Irish real estate investment company focused on residential rental accommodation, today issues its Group⁽¹⁾ annual results for the year from 1 January 2020 to 31 December 2020.

Key Financial Highlights

The Group delivered continued growth for the year ended 31 December 2020 despite the ongoing coronavirus pandemic ("Covid-19"):

Resilient Operating Performance

• Rental demand has remained strong across the portfolio.

• Occupancy remains robust at 98.4% across the residential portfolio (31 December 2019: 98.3%)

• Residential rent collections rates stable at circa 98.9% for the year (31 December 2019: 99.1%)

• Average Monthly Rent ("AMR") per unit was €1,624 as at 31 December 2020 (31 December 2019: €1,596), representing an increase of 1.8%, driven by the addition of new units at market rates.

Further Growth in Revenue and Distributable Income

• Increase in Net Rental Income ("NRI") of 18.3% to €59.8 million (31 December 2019: €50.5 million), driven by the completion of the 2019 Marathon acquisition, and the further addition of 173 new units during 2020.Strong NRI margin of 80.0% (31 December 2019: 81.4%) despite impact of Covid-19.

• An increase in EPRA Earnings² of 2.7% to €34.0 million (31 December 2019: €33.1 million). Adjusted EPRA EPS (adjusted for non-recurring costs)[2] increased to 7.0 cents (31 December 2019: 6.9 cents).

• Basic EPRA EPS decreased by 5.8% to 6.5 cents (31 December 2019: 6.9 cents) for the year ended 31 December 2020 mainly due to non-recurring costs during the year.

• Continued growth in dividends. Intention to declare an additional dividend of 3.22 cents per share for the year ended 31 December 2020

Continued execution of Growth Strategy and Gain in Portfolio Value

• Portfolio value of €1,380.4 million as at 31 December 2020, up 1.6% on the year due to investments of €45.5 million, revaluation gain of €19.1 million and offset by disposal of assets of €43.5 million.

• IFRS Basic NAV per share increased 3.2% to 160.3 cents (31 December 2019: 155.3 cents), post payment of dividends in March and September 2020.

• EPRA NRV increased from €868 million to €904 million in 2020 due to higher portfolio value and income generated during the year.

Strong balance sheet and liquidity

• Group total gearing at 31 December 2020 was 39.2% (31 December 2019: 39.9%).

• No debt maturities before April 2024 and weighted average debt maturity of 5.3 years (31 December 2019: 4.3 years).

• Completed a successful circa €200 million equivalent notes placement with high quality institutional investors in March 2020 keeping interest rates at attractive levels, and longer maturities.

• The Group has available facilities of €246 million (31 December 2019: €45.0 million) and €11.2 million of cash (31 December 2019: €7.0 million) as at 31 December 2020.

Our Response to Covid-19

The Company and our investment manager, IRES Fund Management ("the Manager"), responded swiftly to Covid-19, initiating the Manager's business continuity plan and the Company's crisis management plan.Our priority has always been ensuring the health and wellbeing of our employees, partners, residents, tenants and suppliers.

IRES's well diversified, high-quality portfolio distributed around Dublin with one asset in Cork and located close to transport hubs, schools and major employers has demonstrated strong resilience despite the challenges posed in 2020. The strength of the balance sheet and our experienced board and management has ensured that the Group was in a strong position to deliver continued strong performance despite the extremely challenging environment that evolved from early 2020.

The pandemic created a situation where everyone's home has become central to every aspect of their daily lives from family living, to work, home schooling and leisure activities. This has added additional importance to Environmental, Social, Governance strategy ("ESG") as an integral part of the Group's strategy.

We take our commitment to support the communities that our residents and employees live and work in seriously. Along with the Manager we increased sanitization and cleaning in all our properties and put in place an ongoing communications programme across all stakeholders groups, including increased support to a highly committed team of people who work for IRES and the Manager. We expanded our community engagement activities during 2020 and worked to deepen our relationships with neighbours, community bodies and residents as well as providing support to healthcare workers and charities.

Commenting on the results, Margaret Sweeney, Chief Executive Officer, said:

"This has been a period of unprecedented social and economic challenge due to the Covid-19 global pandemic. The Company together with our Manager, have focused first and foremost on ensuring the health and wellbeing of our employees, partners, residents and suppliers. We have worked together very effectively to navigate the business successfully through the uncertainty and challenges of this environment.

The results of the Company for the year ended 31 December 2020 reflect the continuing execution of the growth strategy with investment in new assets of €45.5 million in 2020 and revenue growth of circa 20.2% over the last year. These results, which reflect the impact of the Covid-19 pandemic for much of 2020, also demonstrate the strong resilience of the business with net rental income margin achieved of 80.0% and continued strong occupancy across the portfolio of 98.4%. We incurred €2.33 million of non recurring general and administrative ("G&A") costs in this period due to the impact of Covid-19 on planned projects in the first half of the year.

We have continued to deliver on our growth and investment strategy with 173 new homes added during the year, bringing our overall portfolio of homes for rental to 3,688. Since the year end, we have also closed the acquisition of a portfolio of 146 high quality residential units at the Phoenix Park Racecourse on 28 January 2021, further increasing the portfolio size to 3,834 residential units. We continue to invest in line with our growth strategy with ongoing developments at Bakers Yard and the forward purchase contract for Merrion Road. To deliver operational and asset management efficiencies, we successfully completed the disposal of 151 residential units of small holdings across 10 properties in November 2020 for circa €48 million (net of cost), a price circa 6% above their December 2019 valuation levels.

We continuously assess our funding options to support the Company's growth strategy and, during the period, we were pleased to complete a successful circa €200 million equivalent notes placement in March 2020 which strengthened the balance sheet by creating additional liquidity and funding sources while keeping interest rates at attractive levels.

Looking forward, while social and economic uncertainty is likely to continue due to Covid-19, I believe the ongoing supply constraints and resilient demand drivers for housing in Ireland will underpin the performance of the Group for the remainder of the financial year and beyond. With our balanced portfolio of modern assets, together with the operational excellence of the Manager, we are well positioned to continue to deliver on our growth and investment strategy, strong performance and value for shareholders.''

For the year	2020	2019	% change
Operating Performance
Revenue from Investment Properties (€ millions)	74.7	62.1	20.4%
Net Rental Income (€ millions)	59.8	50.5	18.3%

EPRA Earnings (€ millions)⁽²⁾	34.0	33.1	2.7%
Add: Net movement in fair value of investment properties (€ millions)	19.1	56.2
Less: Costs associated with early close out of debt instrument (€ millions)	-	(3.1)
Add: Gain on disposal of investment property (€ millions)	4.5	-
Add: Gain/(Loss) on derivative financial instruments (€ millions)	0.7	0.1
Profit (€ millions)	58.3	86.3	(32.5%)
Basic EPS (cents)	11.2	18.0

EPRA Earnings per share (cents)⁽²⁾	6.5	6.9
Interim Dividend per share (cents)	2.75	2.7
Proposed Dividend per share (cents)	3.22	3.1

Portfolio Performance
Total Number of Residential Units	3,688	3,666
Overall Portfolio Occupancy Rate⁽²⁾	98.4 %	98.3 %
Overall Portfolio Average Monthly Rent (€)⁽²⁾	1,624	1,596
Gross Yield at Fair Value⁽¹⁾⁽²⁾	5.5%	5.6%

As at	31 December 2020	31 December 2019	% change
Assets and Funding
Total Property Value (€ millions)	1,380.4	1,359.2	1.6%
Net Asset Value (€ millions)	841.7	810.2	3.9%
IFRS Basic NAV per share (cents)	160.3	155.3	3.2%
Group Total Gearing⁽³⁾	39.2 %	39.9 %	(1.8%)
Gross Yield at Fair Value⁽¹⁾⁽²⁾	5.5 %	5.6 %
EPRA Net Initial Yield	4.2%	4.4%

Other
Market Capitalisation (€ millions)	785.5	829.5
Total Number of Shares Outstanding	525,078,946	521,678,946
Weighted Average Number of Shares - Basic	522,069,110	478,563,272

(1) Excluding fair value of development land and investment properties under development.

(2) For definitions, method of calculation and other details, refer to pages 19 to 22 of Business Performance Measures under the Business Review section of the Manager's Review.

(3) For definitions, method of calculation and other details, refer to page 18 to 19 of Liquidity and Financial Condition under the Operational and Financial Review.

Robust balance sheet with strong liquidity

· The Company has a revolving credit facility of €600 million (with an uncommitted accordion facility of €50 million). The facility has a fixed interest margin of 1.75% and maturity in 2024, with the option to extend further to 2026 (subject to certain conditions).

· The Group completed a private placement of notes of circa €200 million equivalent in March 2020, with a weighted average interest rate of 1.92% inclusive of swap costs. The notes have a weighted average maturity of 9.0 years as at 31 December 2020, laddered over circa six, nine and eleven-year maturities, with the first repayment due in March 2027.

· As at 31 December 2020, the Company has €11.2 million of cash and €246 million of committed undrawn debt under its revolving credit facility.

· I-RES's Group Total Gearing was 39.2% as at 31 December 2020, below the 50% maximum allowed under the Irish REIT rules and the financial covenants under the Group's debt facilities. The Company also maintains significant headroom on its interest coverage ratio.

· Subsequent to 31 December 2020, the Group's loan to value ratio increased to 41.8% post completion of the Phoenix Park Racecourse acquisition on 28 January 2021.

Investment and operational excellence delivering good results despite Covid impact

· Continued growth in our revenue from investment properties to €74.7 million for the year was driven by acquisitions of new units, and organic rental growth.

· Maintained high residential occupancy levels of 98.4% as at 31 December 2020 (31 December 2019: 98.3%).

· Residential rent collections resilient at circa 98.9% for the year, consistent with residential rent collection of 99.1% in 2019. Total rent collections (including Commercial rent collections) were 98.7% (2019: 99.1%). This represents a very strong outturn under the current exceptional Covid-19 conditions.

· NRI margin of 80.0% for 2020, compared to 81.4% for 2019. The decline is due to higher bad debts and vacancy expenses post declaration of Covid-19 pandemic. A limited number of commercial parking and commercial leases (in total less than 3.5% of total Revenue) have been more negatively impacted due to restrictions and regulations as a result of the pandemic.

· Our growth continues to be supported by continued strong demand arising from population growth and the ongoing supply and demand imbalance in the Irish residential property market.

Continuing to Deliver on our Investment Strategy

· I-RES continued to deliver on its three pronged strategy for growth through the acquisition and development of new assets.

· The Company took delivery of 55 apartments and duplexes at Waterside, Malahide, Co Dublin for a total purchase price of €18.5 million (including VAT, but excluding other transaction costs). The scheme was handed over in two phases at the end of March 2020.

· The Company took delivery of 95 residential units at Pipers Court, Hansfield, Dublin 15 for a total consideration of circa €30 million (including VAT, but excluding other transaction costs) on 1 August 2020.

· In January 2020, the company entered into a development contract to develop 61 residential units for a total consideration of circa €16 million at Bakers Yard. Construction work commenced in January 2020, but has been disrupted by the closure of construction sites for 7 weeks in March 2020 and again as at 8 January 2021 due to Government restrictions because of Covid-19. Expected handover of the residential units is now anticipated to be Q2 2022. The timing is dependent on the current and any future closure of construction sites due to the pandemic.

· Ongoing development under a forward purchase contract for 69 residential units at Merrion Road, Dublin 4 with delivery expected in 2022. This is also dependent on restrictions on construction activity during the Covid-19 pandemic.

· Completion of 18 conversion residential units at Tallaght Cross West and currently awaiting an occupancy approval from the Local Authority.

Disposal

· In November 2020, the Company completed the disposal of 151 non-core residential units across 10 properties, as well as three small commercial units, to deliver operations and asset management efficiencies from the portfolio. The sale price of circa €48 million (net of costs), was in excess of the original acquisition cost and circa 6% ahead of the December 2019 valuations.

Funding

· On 11 March 2020 I-RES successfully closed the issue of €130 million notes and IRES Residential Properties Limited, its subsidiary, closed the issue of USD $75 million notes on a private placement basis (collectively, the "Notes") which was circa €200 million (Euro equivalent) in aggregate. The Notes have a weighted average fixed interest rate of 1.92% inclusive of a USD Euro swap and a weighted average maturity of 9.0 years as at 31 December 2020.

Dividends

· The resilience of our business is reflected in our ability to grow our dividend during this period.

· It is intended to declare a dividend of 3.22 cents per share for the year ended 31 December 2020 on or about 19 February 2021.

· Paid a dividend of 2.75 cents per share during September 2020 for the period 1 January 2020 to 30 June 2020.

· Paid a dividend of 3.10 cents per share during March 2020 for the year ended 31 December 2019.

Chairman's Statement

As we reflect on 2020 and the challenging year that it was, I am happy to say that the Board of Directors of the Company ("the Board") is very satisfied with the Group's performance, under the management of our CEO Margaret Sweeney and the Manager. The Company delivered another strong performance and continued growth in a period of uncertainty, demonstrating the resilience of the multi-family real estate sector.

As we navigate the Covid-19 pandemic the health and wellbeing of our employees, residents and business partners remains our priority. The Group remains focused on delivering the strategic priorities set by the Board and continuing to invest in accretive acquisitions and developments to deliver consistent returns for our shareholders.

Portfolio Performance

As at 31 December 2020, the Group had a portfolio of 3,688 residential units across 34 properties in the Dublin region and one property in Cork. Despite the various public health measures in place as a result of Covid-19, including restrictions on travel and movement, the Group continued to grow its portfolio during the year, with a modest increase of 22 units on the prior year. This modest increase reflects the acquisition of 173 units, offset by the disposal of 151 units as part of a programme to re-cycle and re-deploy capital across the business. The Group also has a further pipeline of 673 residential units, representing circa 18% growth potential in the portfolio which will be delivered over the coming years.

Post year end, the Group added to the growth achieved in 2020 with the acquisition of 146 residential units at The Phoenix Park Racecourse in Dublin bringing the total portfolio to 3,834 units as of the date of this report.

We believe the structural drivers of demand for private rental residential accommodation (including population growth, strong inward investment, economic growth and urbanisation) will continue to underpin strong demand in the market over the long-term. The Board believes that I-RES is strongly positioned to capitalise on this demand and we will continue to evaluate growth opportunities to further strengthen its position as the leading provider of private rented residential homes in Ireland, while maintaining a disciplined approach to capital allocation.

We are very appreciative of our shareholders, our banking syndicate and private placement noteholders who have all strongly supported I-RES and its financing requirements over the course of the last year.

Financial Results

Against a challenging market backdrop, the Group generated strong revenue and NRI growth during the year. Our continued investment in new properties helped deliver rental income growth for the year, while also maintaining a consistently high occupancy rate across our portfolio. As of 31 December 2020, our adjusted EPRA EPS adjusted for non-recurring costs is 7.0 cents which is up on 2019, while our IFRS Basic NAV per share grew by 3.2% to 160.3 cents. This strong performance in 2020, resulted in the declaring of an additional dividend of 3.22 cents per share for the twelve months ended 31 December 2020.

Investment Management Agreement

The Board is extremely pleased with the contributions made by the Manager together with senior management and staff of CAPREIT Limited Partnership (" CAPREIT LP "). CAPREIT LP and the Manager continue to provide staffing and other essential supports including its SAP platform for the business.

In November 2020, I-RES provided an update on the investment management agreement between the Company, I-RES Residential Properties Limited and the Manager (the " IMA ").

The IMA had an initial term of five years which expired on 1 November 2020. In advance of the expiry of the initial IMA term, a committee of the Board, which did not include either Mark Kenney or Phillip Burns given their respective relationships to CAPREIT, was appointed in November 2019 (the " Related Party Committee ") to conduct a scheduled review of the IMA and Services Agreement, evaluate the strategic options available to I-RES in relation to them and consider certain related matters.

On the expiry date of the initial IMA term on 1 November 2020, the Related Party Committee had not reached agreement on new terms for a revised IMA with the Manager. As a result, in accordance with its terms, the IMA has continued under the existing terms. Both parties have termination rights under the IMA which can now be exercised. In conjunction with the rollover of the IMA, I-RES announced that it would augment the management resources of the Company in line with its growth strategy and increased scale.

The Related Party Committee, in conjunction with advisers, continues to evaluate the relative strategic and financial merits of various options available to the Company. The Company is exploring the option to internalize the management of the Company and, if applicable, to apply to the Central Bank of Ireland for authorization as an alternative investment fund manager. The Company appreciates the continuing co-operation and assistance of the Manager and CAPREIT LP in the Related Party Committee's ongoing deliberations on the future management of the Company.

Shareholders should note that at this point, no decision has been made by the Company to internalize, or otherwise, and the IMA continues under the existing terms.

Further announcements will be made by the Company as appropriate.

Governance & Shareholder Engagement

The Board is committed to maintaining high standards of corporate governance.

During 2020, we undertook an external Board review, to analyse the Board's composition and to identify any potential gaps in skills or expertise. Separately, I have assessed the performance of each individual director and I am pleased that every director is committed to their position, provides meaningful input, and contributes sufficient time and energy to effectively complete their Board duties.

We believe that frequent, transparent and constructive engagement with our shareholders helps us to better understand how we can create further long-term value. During 2020, I-RES appointed an external advisor to complete its first independent investor perception study to gain unbiased, independent insights into investors' sentiment towards I-RES and the sector it operates in. During 2020 I-RES appointed Sarah Stokes as Director of Investor Relations and Funding to assist with investor engagement and to continue to expand our investor relations programme and process as the business continues to grow.

ESG

I-RES remains fully committed to aligning environmental, social and governance ("ESG") measures to our business strategy and objectives. Following the formalising of our ESG strategy in 2019, we have remained committed to building on our ESG programme throughout 2020. We recognise that a critical part of our ESG journey is identifying and setting goals that are not just about having enough impact, but the right impact. The commitments set out in our Corporate ESG Policy are aligned with the United Nations Sustainable Development Goals ("SDGs") relevant to our business. 2021 will see us monitor our progress towards each relevant goal and inspire and enable a more impactful performance as we move forward.

Our goal is not just to own buildings but to create communities which are positive places to live and work in, as well as providing a quality resident experience. We have taken this focus to planning for new developments on our owned sites, as well as in our interaction with partners. In that effort, the Board appointed Tom Kavanagh, an Independent Non-Executive Director in 2018, to build the necessary skill sets that will advance our Board-level ESG competency and support the multiyear strategy that will drive a resilient and adaptative performance.

As one of Ireland's largest landlords, our Board collectively holds years of global operational excellence, and we have the experience to leverage and initiate appropriate practices to manage the challenges and opportunities affecting our business. We want to collectively acknowledge I-RES REIT's and the Manager's leadership teams and employees who strive every day to be the employer, landlord and partner of choice. Their combined dedication, passion and commitment are what continuously sets I-RES apart in the marketplace.

To our residents, communities, funders and shareholders, the I-RES REIT Board wishes to thank you for your trust and ongoing support as we collectively navigate through these challenging times. We recognise that many in our communities and wider society have been deeply impacted by Covid-19 and we look for better days ahead.

Outlook

In summary, the Board is extremely pleased with the Group's performance for the year. The quality of our property portfolio, the strength of our balance sheet, together with the experience of our Board, management team and the Manager, has allowed I-RES to navigate the uncertainty caused by the Covid-19 pandemic. Looking ahead, the ever-evolving situation presented by the Covid-19 pandemic, and Government restrictions introduced in order to mitigate its spread, could have impacts on the Group's business which we cannot foresee at this time. Our priority will continue to be the health and wellbeing of our employees, residents, partners and suppliers.

I would like to thank my fellow Board members, our CEO, Margaret Sweeney, as well as the management and staff of IRES Fund Management and CAPREIT LP for their hard work, focus and dedication during the year which ensured that the business continued to perform strongly during these uncertain and challenging times.

Declan Moylan

Chairman

Chief Executive Officer's Statement

I am delighted to report that we have delivered another year of strong performance for 2020. Against a challenging backdrop, I-RES's business has remained resilient, underpinned by our high quality and diverse portfolio of assets, robust financial position and experienced Board and management team. 2020 also saw us continue to deliver on our growth strategy with further investment in supply of new homes, recycling capital through accretive disposition of assets and 9.7% growth in underlying earnings.

Covid-19 Statement

Covid-19 has caused unprecedented social and economic disruption to the Irish economy since the first quarter of 2020. Pandemic related lockdowns and restrictions have impacted many businesses across the country and have changed the way we live our lives. During this time, the priority of the Group, along with our Manager, has been to ensure the safety, health and wellbeing of our employees, residents, partners and suppliers. We have stayed in continuous dialogue with these stakeholders over the past 12 months and worked diligently to support all stakeholders in what was an extremely challenging year.

We have worked together effectively to successfully navigate this unprecedented environment. I am proud to say that our team adapted quickly, transitioning to virtual working seamlessly, ensuring that we were able to support our residents throughout the pandemic as well as continuing to deliver on our business targets. We have maintained an active programme of communications with all residents and continue to support any resident who is facing difficulties due to the pandemic and related restrictions.

As we progress into 2021, Covid-19 continues to present ongoing challenges and the long-term impact is yet to fully materialize. In late December 2020, Ireland entered a third wave of the pandemic, resulting in a third and severe lockdown coming into effect from 1 January 2021, which included the closure of schools, construction, non-essential retail and hospitality. Case numbers are reducing strongly and it is envisaged that some easing of restrictions will evolve in the coming months. There are positive signs emerging on the horizon for 2021 with the commencement of the vaccination programme.

2020 Performance

Revenue from investment properties increased by 20.4% to €74.7 million and Net Rental Income grew by 18.3% to €59.8 million in the period arising mainly from investment in new assets during 2019 and 2020. These results, which include approximately 10 months of the impact of Covid-19 demonstrate the strong resilience of the business.

I-RES's diversified resident profile across our properties and strong demand for professionally managed, high quality rental accommodation in the mid-tier range as well as continued investment in new supply of homes, stable rent levels and efficient operational management has underpinned the resilience of the business during 2020. Despite the uncertain market backdrop, we saw strong occupancy of 98.4% at 31 December 2020 (31 December 2019: 98.3%). Our rent collections for the residential portfolio were consistent at 98.9% for 2020 (2019: 99.0%), and our NRI margin achieved was 80.0%, further underlining the resilient characteristics of the business. This represents a very strong outturn under current market conditions.

Being cognizant of the challenges faced by many arising from the onset of the Covid-19 pandemic, the Group has not implemented any rent increases on renewals since 1st April 2020.

We have also continued to support our commercial tenants (circa 3.5% of revenue) whose businesses have been significantly impacted due to public health measure and lockdowns. We have payment plans in place for affected tenants, representing circa 18% of our commercial tenants.

The Dublin and Irish market continued to attract significant investor demand during 2020 despite the impact of Covid-19 and related restrictions, resulting in further yield compression in residential asset values for good quality assets in the right locations. We reported a fair value gain as a result of the revaluation of our investment properties at 31 December 2020 of €19.1 million over the year.

I am pleased to say that we have continued to deliver strong returns and growing dividends for our shareholders during 2020.

Funding

Managing and maintaining a strong balance sheet with adequate liquidity has been a key priority for us during this period of uncertainty. Our Group Total Gearing as at 31 December 2020 was 39.2%.

Our Revolving Credit Facility ("RCF") of €600 million with our syndicate of five banks which we put in place in 2019 will support the funding of acquisitions and development plans.

In March 2020 the Group completed a private placement of Notes of circa €200 million (Euro equivalent), with a weighted average fixed interest rate of 1.92% inclusive of swap costs. The Notes have provided further flexibility in our funding strategy by adding further lengthening to our debt maturities. The Notes have laddered circa six, nine and eleven-year maturities, with the first repayment due in March 2027.

We are grateful to our shareholders, our banking syndicate and private placement noteholders who have all strongly supported the Group and its financing requirements over the course of the last year and as we continue to deliver on our strategy.

Growth Strategy

Sustainable accretive growth in our residential rental assets portfolio is an integral part of our strategy. We have delivered circa 50% growth in the portfolio unit size over the last 3 years and continue to invest in the supply of accommodation for rent. Due to the limited supply of completed rental accommodation / liquidity of properties of scale that fit our business model and continued growing investor demand, we outlined a three-pronged strategy for growth in 2018. Our strategy remains focused on:

· Continued acquisition of completed assets at accretive yields

· Investing in future supply through development partnerships with local developers and builders

· Development and intensification of I-RES owned sites

This approach allows I-RES to both identify attractive and accretive development opportunities in the market, while also capitalising on the strength and insight of other property developers. These three strategies can also be utilised by I-RES at various points in the cycle to maximise value, ensuring that we continue to deliver enhanced returns for our shareholders.

In 2020, we delivered on this strategy by adding 173 high-quality residential units to our portfolio. We also contracted for a further acquisition of 146 new apartments which were acquired on completion in January 2021. In addition, in November 2020 the Company announced its first disposal, with the sale of a non-core portfolio, comprising 151 residential units across 10 properties, providing effective capital allocation and accretion. The price achieved was in excess of the original acquisition cost and circa 6% ahead of the December 2019 valuation.

As at 31 December 2020, the portfolio consisted of 3,688 high-quality, well-located residential homes along with associated commercial space and development sites (31 December 2019: 3,666 residential units), at a total value of €1,380.4 million. All of our residential units are located in the Dublin area, with one asset in Cork, and are situated near primary transportation links and employment centers.

We have a strong pipeline for growth including:

· In January 2021, completed the acquisition of 146 residential units for €60 million (including VAT and excluding transaction costs);

· A fixed price forward purchase contract for 69 residential units at Merrion Road, Dublin due for delivery in 2022;

· Development of 61 residential units and 3 commercial units currently on owned sites;

· Planning permission in place to develop 543 residential units on existing sites over the coming years.

ESG Strategy

We recognise the importance of responsible investing. Last year we formalised our ESG strategy and we are making significant progress on further evolving this strategy and ensuring it is implemented across the business. Despite the global challenges presented by Covid-19, we continue to place an emphasis on ESG, with a particular focus on our social performance. In that effort, we prioritised the wellbeing of our people, our residents, and the wider community during 2020.

Our commitment remains to build a sustainable and responsible business which is aligned with the long-term approach we take to investing, building and maintaining our properties, supporting and servicing our residents, employees, our vendor partners and the wider community in which we operate. We actively work, supported by our Manager towards aligning our business strategy and objectives with ESG measures that are important to growing a long term sustainable business, meeting the needs of our investors and stakeholders.

Investors and other stakeholders across the real estate industry increasingly expect ESG-based performance disclosures and that during 2020, we submitted our inaugural application to the Global Real Estate Sustainability Benchmark (" GRESB "), an industry-leading global assessor of the ESG performance of real estate assets and their managers. In addition, we initiated our business practice alignment with the European Public Real Estate Association (" EPRA ") sustainable reporting standards. We will be reporting on our progress in more detail in our 2020 Annual Report.

As we continue to evolve our approach to integrating ESG measures across all levels of our business, we are confident in delivering a resilient and adaptive performance that is aligned with our strategic objectives.

Results

Below is a table summarising the Group's financial position as at 31 December 2020 and profit or loss results for the year ended 31 December 2020:

Statement of Financial Position:	As at 31 December 2020	As at 31 December 2019	% change
Investment Properties (€ millions)	1,380.4	1,359.2	1.6%
Net Asset Value (€ millions)	841.7	810.2	3.9%
IFRS Basic NAV per Share (cents)	160.3	155.3	3.2%
Bank Indebtedness and private placement debt (€ millions)	539.1	549.9
Group Total Gearing	39.2 %	39.9 %


Statement of Profit or Loss and Other Comprehensive Income:	FY 2020	FY 2019	% change
Revenue from Investment Properties (€ millions)	74.7	62.1	20.4%
Net Rental Income (€ millions)	59.8	50.5	18.3%
Fair value gain on investment properties (€ millions)	19.1	56.2
EPRA Earnings (€ millions)	34.0	33.1	2.7%
Non recurring costs (€ millions)⁽¹⁾	2.3	-
Adjusted EPRA Earnings (€ millions)⁽²⁾	36.3	33.1	9.8%

Basic EPS (cents)	11.2	18.0	(37.8%)
Diluted EPS (cents)	11.1	17.9	(38.0%)
EPRA EPS (cents)	6.5	6.9	(5.8%)
Adjusted EPRA EPS (cents)	7.0	6.9	1.4%
Interim Dividend per share (cents)	2.75	2.7	1.9%
Proposed Dividend per share (cents)	3.22	3.1	3.9%
(1) Refer to page 17 for further details on non recurring costs. (2) Refer to page 21 for further details on Adjusted EPRA Earnings

Property assets at 31 December 2020 increased by €45.5 million reflecting a combination of acquisitions, development and capital expenditures within our portfolio, a €19.1 million fair value gain on the investment properties held as at 31 December 2020 which is offset by asset disposals of €43.5 million. The main driver of the valuation increase was yield compression, offset by reduction in market rents. I-RES did not put through rent increases on renewals during the pandemic period.

IFRS Basic NAV per share increased by 3.2% to 160.3 cents as at 31 December 2020 from 155.3 cents as at 31 December 2019, post payment of a 3.1 cents dividend per share (€16.2 million) on 23 March 2020, offset by fair value gains on investment properties on revaluations and profits generated in 2020.

The Group decreased its Group Total Gearing to 39.2% at 31 December 2020, from 39.9% at 31 December 2019. The Group's acquisition of 146 units located at the Phoenix Park Racecourse for €60 million (including VAT and excluding transaction costs), which was completed in January 2021, will increase the pro-forma Group Total Gearing to 41.5%.

Average Monthly Rent ("AMR") per unit was €1,624 as at 31 December 2020 (31 December 2019: €1,596).

Despite the impact of Covid-19, our residential occupancy rate has remained strong at 98.4% at 31 December 2020 (31 December 2019: 98.3%), underpinned by strong market fundamentals in the Irish residential rental sector and strong property management.

The NRI margin declined from 81.4% to 80.0% over the 12 months. The decline is due to higher bad debts and vacancy post declaration of the Covid-19 pandemic, compared to prior periods. I-RES has a limited number of commercial parking and commercial leases (in total less than 3.5% of total Revenue), which have been more negatively impacted.

We again delivered a strong earnings performance with Adjusted EPRA Basic EPS before non-recurring costs of 7.0 cents for the period ended 31 December 2020. This was due to organic rental growth and accretive acquisitions.

Dividends

Under the Irish REIT regime, subject to having sufficient distributable reserves, I-RES is required to distribute at least 85% of the Property Income of its Property Rental Business for each financial year to shareholders via dividends.

It is the intention of the Board that the declaration of an additional dividend of 3.22 cents per share (€16.9 million) for the twelve months ended 31 December 2020 be announced by the Company following the filing of the relevant financial statements for the Company in Dublin, Ireland on or about 19 February 2021 and such interim dividend be paid on a subsequent date as notified in such announcement. This follows on from the declaration of an interim dividend of 2.75 cents per share (€14.3 million) paid on 11 September 2020 for the six-month period ended 30 June 2020.

Our ability to continue to deliver a progressive dividend in 2020, despite the challenging market backdrop, reflects the resiliency and counter-cyclical characteristics of the multi-family real estate sector, our high quality and diverse portfolio of assets, and strong financial performance for the year.

Outlook

We remain confident in the future prospects of the business as we continue to deliver housing solutions to the Irish market on a sustainable basis for the long term. The most pressing issue facing the Irish housing market remains the significant shortage of rental accommodation and, while supply has been increasing since 2014, the impact of Covid-19 will see output fall below original expectation for 2020 and below 2019 levels.

Therefore, demand for quality, well located and professionally managed accommodation will remain strong, underpinned by steady population growth. In addition, inward Foreign Direct Investment ("FDI") across key sectors has remained resilient through the pandemic, particularly in ICT, Pharma and Financial Services. The Industrial Development Authority ("IDA") Ireland reported that employment growth of 3.6% was achieved in 2020 in IDA supported companies.

While rent collections across our residential portfolio remained strong during 2020, this may not be indicative of the rate of rent collection in the upcoming months. The ongoing uncertainty related to the Covid-19 pandemic, including uncertainty surrounding measures taken to mitigate the economic impacts could give rise to increases in bad debts and vacancy levels in the future. We will continue the open dialogue with our tenants as the situation progresses.

We will also continue to monitor and assess the potential risks and opportunities for the Group arising from market events such as the recently announced Brexit deal, US policy on FDI in Ireland, as well as taxation and increased regulation risks

We remain confident in the long-term prospects of the Irish multi-family rental market, which has proven itself to be highly resilient and counter cyclical during the pandemic. With our balanced portfolio of modern assets, together with the operational excellence of our Manager, we are well positioned to continue to deliver a strong performance and value going forward. We continue to execute on our growth strategy as well as continuing to monitor all opportunities in the market. Our business is resilient. The Group's financial position and liquidity is strong, and we have the resources and flexibility to manage our way through the various challenges that will inevitably arise.

Finally, I would like to convey my gratitude to each employee in the Company and the Manager as well as our Chairman and directors for their incredible commitment, focus and support over the last year, while dealing with the many challenges that the pandemic delivered to all our lives. The I-RES team has worked relentlessly through this challenging time to ensure that we continue to manage the business successfully and provide excellent service to all our residents. I would like to thank our residents who are the foundation of our business and who have also been living and working under significant restrictions as the country deals with the Covid-19 pandemic. I would also like to acknowledge our many partners and service providers who continue to provide the Group with excellent support and service despite all the challenges that 2020 brought.

Margaret Sweeney

Chief Executive Officer

Investment Manager's Statement

During the current pandemic, we have continued to put an emphasis on protecting the health and safety of our employees, I-RES's tenants, partners and suppliers, and continue to implement appropriate cautionary measures to address potential risks.

The Manager continues to deliver strong results despite these uncertain times. In particular, we have enhanced our capacity to deliver high-quality accommodations and services for residents while continuing to pursue our strategy for growth.

Our highly qualified and talented operations team, which features a member dedicated to each building and offers extensive supports such as a 24-hour emergency line, leads the way in professional management of residential rental accommodation nationally. The team builds close relationships with residents and ensures that our reputation for quality assets is sustained through proactive and attentive maintenance. In the midst of the current pandemic, our team follows all of the Irish Health Service Executive guidelines to ensure the safety of our residents and our employees. We continue to provide communication with our residents to ensure that they feel safe in our buildings. We continued to provide essential repairs and maintenance to the buildings throughout the early stages of Covid-19. It is our objective to ensures that people simply love to live in our buildings, which leads to the consistently high occupancy rates we have delivered year after year.

Our local capabilities are amplified by our access to the global expertise, systems and technology platforms of CAPREIT LP, a Canadian leader in the professional property management of rental accommodation. During 2020, we have a new resident portal to provide an additional channel for our residents to communicate with us. Building on the CAPREIT LP model, which features open and regular communication with residents, best practices in employee development, and innovative strategies for attracting and retaining residents, we continually improve our offerings to residents with the objective to ensure that the services we provide exceeds residents' expectations.

I-RES has a well-diversified, high-quality portfolio distributed around Dublin with one asset in Cork and located close to transport hubs, schools and major employers. In these areas, we have expanded our community engagement activities and worked with local residents to deepen our relationships with neighbours and residents. These activities are all part of our effort to deliver exceptional living experiences that encourage residents to put down roots and stay.

Ireland has remained one of the most resilient economies in the European Union during the pandemic, and the consistently high demand for quality rental properties, combined with a growing appreciation of the value of I-RES' professional property management approach, is perfectly aligned with the I-RES model of long-term commitment to a residential market.

Scott Cryer

Director of IRES Fund Management

Business Review

The Irish residential market continues to see low levels of new apartment buildings against the backdrop of a significant supply and demand imbalance. Accordingly, the rental market remains robust with strong demand.

The I-RES long term strategy for future growth is focused around:

• Continued acquisition of completed assets at accretive yields.

• Investing in future supply through development partnerships with developers of Private Rented Sector (" PRS ") assets.

• Development and intensification of I-RES owned sites.

Acquisitions

Phoenix Park Racecourse, Dublin 15

I-RES completed the acquisition of 146 residential units located in The Phoenix Park Racecourse, Castleknock, Dublin 15 in January 2021. The total purchase price was €60 million (including VAT but excluding other transaction costs).

The property is located in the west Dublin suburb of Castleknock and is adjacent to the Phoenix Park, the largest enclosed park of any European capital city. The scheme occupies an attractive position close to Dublin City Centre (circa 6kms), with easy access to the M50 motorway. There are excellent public transport links to the City Centre, with Ashtown train station and a high frequency bus service close by. Castleknock and the Phoenix Park is a much sought after and mature residential location, providing some of Dublin's finest amenities, including schools, sporting facilities, shopping and employment.

Forward Purchase and Development Contracts

Waterside, Malahide, Co Dublin

I-RES entered into contract in 2019 for the forward purchase of 55 apartments and duplexes at Waterside, Malahide, Co Dublin for a total purchase price of €18.5 million (including VAT, but excluding other transaction costs). The 55 residential units were received by the end of March 2020 in two phases.

Waterside is located close to excellent infrastructure, including transport, schools, retail parks and employment, with Dublin Airport approximately a 10-minute drive away. Large scale employers in the area include Ryanair, Siemens, Kellogg, Fujitsu, C&C, Hertz, Nightline Group and Fyffes. The area is well serviced by Dublin Bus, the DART rail services and the M50 and M1 motorways.

Hansfield Wood, Dublin 15, Phase 2 (Pipers Court)

During 2018, I-RES entered into a contract to acquire a 1.3-acre development site in Hansfield Wood for a total purchase price of €3.3 million (including VAT but excluding transaction costs). The Company also entered into a development agreement to develop 95 apartments and duplexes on the Hansfield Site for a total consideration of

€26.7 million (including VAT, but excluding other transaction costs). I-RES and its technical team monitored the construction of the self-contained block of 95 apartments and duplexes. The handover of the apartments to I-RES was completed on 1 August 2020.

Hansfield is surrounded by excellent infrastructure and amenities including road and rail transport, schools, retail and leisure facilities. The village of Ongar provides all day to day services including supermarket, café, pharmacy and health centre, whilst the close by Blanchardstown Shopping Centre (circa 3.5km), which is one of Ireland's largest shopping destinations, provides 180 shops, restaurants, hotel and leisure facilities.

Located on the west side of Dublin City, the development is 7kms from Castleknock village and 17kms from Dublin airport. The Blanchardstown area provides a population in the order of 75,000 people. Hansfield Train Station lies next to the development and offers a regular rail link to Dublin City Centre (Connolly Station), with a journey time of circa 30 minutes.

Contracts entered in 2018 which are expected to be delivered in 2022

Merrion Road, Dublin 4

I-RES entered into contract for the forward purchase of 69 residential units at Merrion Road in a transaction valued at €47.6 million (including VAT, but excluding other transaction costs). Construction commenced in 2019 with I-RES and its technical team monitoring the ongoing works. It is anticipated that the residential units will be completed and handed over to I-RES in 2022 and made available for leasing. This date may be impacted by restrictions on construction activity during the Covid-19 pandemic.

The property is located circa 7km from Dublin City and is well serviced by Dublin Bus and the DART rail services. The property is located close to good amenities including schools, universities and numerous hospitals (St. Vincent's University and Private Hospitals, Blackrock Clinic) in the immediate vicinity. The area also benefits from a number of leisure facilities with Elm Park Golf and Sports Club, Railway Union Sports Club and Blackrock Park on its doorstep.

Dispositions

I-RES completed the disposal of 151 non-core residential units, as well as three small commercial units, across 10 properties in Dublin in November 2020. The sales price of circa €48 million (net of costs) was achieved following a competitive sales process which attracted significant international and domestic interest. The objective of the sale was to deliver operations and asset management efficiencies from the portfolio. The price achieved was in excess of the original acquisition cost and circa 6% ahead of the December 2019 valuations. I-RES recognized a gain on disposal of investment property of €4.4 million.

The purchaser was a fund managed by Orange Capital Partners, an international investment manager with its office in Dublin and an existing footprint in the Irish market.

Property	Number of Units	Other Land & Property
The Laurels	19	1 Commercial Unit, 190 Sq M
Beacon South Quarter	12
Russell Court	29
Belville & The Mills⁽¹⁾	21
St. Edmunds	18	1 Development Site, 0.16 Ha
The Oaks	14
Spencer House	12
East Arran Street	12
Coopers Court	14	2 Commercial Units, 126 Sq M
Total	151

(1) There are two properties at Belville & The Mills

Development and Intensification of Existing Assets

During the past three years, I-RES submitted planning applications to build circa 679 residential units across 8 existing sites.

Location	No. of Residential Units at Completion	Status
Coldcut (Conversion)	1	Construction Completed in 2019
Priorsgate (Conversion)	5	Construction Completed in 2020
Tallaght Cross West	18	Construction Completed in 2020
Bakers Yard	61	Under Construction
Priorsgate (Bruce House)	31	Planning Permission Granted
Beacon Square South (B4)	84	Planning Permission Granted
Rockbrook	428	Planning Permission Granted
Beacon Square South (B3)	51	Planning Application refused and now appealed to An Bord Pleanála
	679

Developments in 2020

Site B3, Beacon South Quarter, Sandyford

Site B3 which previously has planning for commercial office fronts Blackthorn Drive and is within the Beacon South Quarter mixed use scheme. A planning application was submitted for 51 residential units in June 2020. The application was refused by the local authority and an appeal has been submitted to the An Board Pleanala.

Priorsgate, Tallaght, Dublin 24

The Company has received planning permission for the conversion of unused commercial space into five residential units. Construction commenced in 2020 and was completed in Q4 2020. Three of the five units are now leased and occupied.

Bakers Yard, Portland Street North, Dublin 1

The Company owns a 0.18 ha (0.45 acre) development site at the Bakers Yard scheme. The site is very well located within walking distance of the International Financial Services Centre, Trinity College and the Mater Hospital.

In September 2018, planning permission for the proposed 61 residential unit development was granted. Demolition and clearance of the site was completed in Q2 2019. The Company entered into a contract to commence construction of the 61 units in Q1 2020. Construction work commenced in January and was halted in March due to the Covid-19 pandemic. Construction work restarted in May but closed again on 8 January 2021 due to the latest government restrictions. Due to the unknown factors of when the sites will reopen, I-RES expects that the site will be completed by Q2 2022, at the earliest.

Tallaght Cross West, Dublin 24

In March 2018, the Company received a grant of planning permission for the conversion of unused commercial space to 18 residential units. Construction began in 2019, and the residential units were completed in March 2020. These are currently awaiting occupancy approval from the Local Authority.

Property Portfolio Overview

The following table provides the Group's property portfolio valuation as at 31 December 2020.

		# of Apts.	Commercial Space	Average Monthly Rent Per Apt. as at	Rent	Occupancy
Property Location	# of Buildings	Owned⁽¹⁾	Owned (sq. m.)⁽¹⁾	31 December 2020 ^(1)(2)(3)	(per sq. m. per month)	⁽¹⁾⁽²⁾
Total South Dublin	11	1,062	6,854	€ 1,741	€ 22.7	96.9%
Total City Centre	6	417	2,544	€ 1,752	€ 23.2	97.6%
Total West City	3	409	-	€ 1,617	€ 21.6	98.5%
Total North Dublin	9	897	-	€ 1,563	€ 20.4	99.8%
Total West Dublin	5	853	17,412	€ 1,502	€ 18.2	99.1%
Cork	1	50	-	€ 1,294	€ 16.2	98.0%
Total Portfolio	35	3,688	26,810	€1,624⁽⁴⁾⁽⁵⁾	€ 20.9	98.4%⁽⁴⁾

(1) As at 31 December 2020.

(2) Based on residential units.

(3) Average monthly rent (AMR) is defined as actual monthly residential rents, net of vacancies, as at the stated date, divided by the total number of apartments owned in the property. Actual monthly residential rents, net of vacancies, as at 31 December 2020 was €5,989,312 divided by 3,688 units (which are the total units owned as at 31 December 2020) resulting in AMR of €1,624.

(4) refer to page 20 for further discussion on average monthly rent per apt. and occupancy

(5) IRES's external valuers indicated that IRES's current rents (on a weighted average basis for the portfolio) as at 31 December 2020 is estimated to be approximately below market by 12.5%.

Operational and Financial Results

Net Rental Income and Profit for the Year Ended	31 December 2020 €'000	31 December 2019 €'000
Operating Revenue
Revenue from investment properties⁽¹⁾	74,744	62,097
Operating Expenses
Property taxes	(754)	(669)
Property operating costs	(14,215)	(10,891)
	(14,969)	(11,560)
Net Rental Income ("NRI")	59,775	50,537
NRI margin	80.0 %	81.4 %

General and administrative expenses⁽²⁾	(5,062)	(4,288)
Non recurring costs⁽²⁾	(2,334)	-
Asset management fee	(4,444)	(4,024)
Share-based compensation expense	(322)	(236)
EBITDA⁽³⁾	47,613	41,989
Depreciation of property, plant and equipment	(526)	(32)
Lease interest	(241)	(4)
Financing costs	(12,816)	(12,036)
Costs associated with early redemption of debt instrument	-	3,153
EPRA Earnings	34,030	33,070
Costs associated with early redemption of debt instrument	-	(3,153)
Gain on disposal of investment property	4,432	-
Net movement in fair value of investment properties	19,092	56,234
Gain on derivative financial instruments	709	131
Profit/(Loss) for the Year	58,263	86,282

(1) Includes residential vacancy loss of €1.9 million (31 December 2019: €0.7 million) and commercial vacancy loss of €1.3 million (31 December 2019: €1.1 million) for the year ended 31 December 2020. The residential vacancy was 2.5% (31 December 2019: 1.1%) of the total gross rental revenue for the year ended 31 December 2020.

(2) The non-recurring costs of €2.3 million and general and administrative expenses of €5.1 million incurred in 2020 totals the general and administrative expense costs of €7.4 million reflected on the Consolidated Financial Statements for the year ended 31 December 2020.

(3) EBITDA represents earnings before lease interest, financing costs, depreciation of property, plant and equipment, gain or loss on disposal of investment property, net movement in fair value of investment properties and gain or loss on derivative financial instruments to show the underlying operating performance of the Group.

Operating Revenue

For the year ended 31 December 2020, total operating revenue increased by 20.4% compared to the year ended 31 December 2019, due to a full-year of contributions from prior year acquisitions and completed forward purchases during 2020 and organic rental growth.

Net Rental Income

The NRI margin has been presented as the Company believes this measure is indicative of the Group's operating performance. For the year ended 31 December 2020, NRI increased by 18.3% primarily due to acquisitions completed in the prior period having a full-year impact, and completed forward purchases during 2020. The NRI margin for the current year decreased to 80.0% compared to 81.4% for last year due to higher allowance for bad debt and vacancy costs as a result of the Covid-19 pandemic. I-RES also has a limited number of commercial parking and commercial leases (in total less than 3.5% of total Revenue), which have been more negatively impacted. The allowance for bad debt expenses increased to €1.0 million (1.3% of total operating Revenue) for the year ended 31 December 2020 due to Covid-19, compared to €0.6 million for the year ended 31 December 2019. Given the economic uncertainty resulting from the Covid-19 pandemic, I-RES is paying close attention to the allowance provided for bad debt expenses and has been monitoring tenant receivables on a daily basis. We believe growth in the long term will be supported by the strong economic fundamentals of the Irish economy as well as the continued strong demand arising from population growth and the ongoing supply and demand imbalance in the Irish residential property market.

General and Administrative ("G&A") Expenses

G&A expenses include costs directly attributable to head office, such as executives' salaries, director fees, professional fees for audit, legal and advisory services, depository, property valuation fees and other general and administrative expenses.

Non recurring Costs

The non recurring G&A costs total €2.3 million for 2020. These costs primarily includes costs for transactions that could not be closed due to Covid-19 pandemic and other third party advisory services.

Asset Management Fee

Pursuant to the investment management agreement between I-RES, IRES Residential Properties Limited and IRES Fund Management effective on 1 November 2015, as amended and restated from time to time (the "Investment Management Agreement"), I-RES pays 3.0% per annum of its gross rental income as property management fees (included under "property operating costs" above) and 0.5% per annum of its net asset value to the Manager. The asset management fee for the year ended 31 December 2020 was €4.4 million compared to €4.0 million for the year ended 31 December 2019. It is higher due to higher net asset value compared to the same period last year. See note 21 of the Consolidated Financial Statements for further details of the Investment Management Agreement.

Share-based Compensation Expenses

Under the Company's long term incentive plan, in 2017 and 2019, options were granted to the Company's Chief Executive Officer and in 2020, restricted shares were awarded in line with the Remuneration policy. See note 12 of the Consolidated Financial Statements.

Net movement in fair value of Investment Properties

I-RES recognises its investment properties at fair value at each reporting period, with any unrealised gain or loss on remeasurement recognised in the consolidated statement of profit or loss and other comprehensive income. The fair value gain on investment properties is mainly due to the continued rental growth from income properties and yield compression offset by a reduction in market rents which has led to an increase in value of €19.1 million for the year.

Gain on disposal of investment property

On 10 November 2020, I-RES disposed of 151 non-core residential units and three small commercial units spread across 10 properties. As a result of the disposal, I-RES recognized a gain on disposal of investment property of €4.4 million.

Gain on Derivative Financial Instruments

On 28 February 2017 and 15 September 2017, I-RES entered into interest rate swap agreements aggregating to €204.8 million. The agreements effectively convert borrowings on a EURIBOR-based floating rate credit facility to a fixed rate facility, the fixed portion being EURIBOR rate of circa minus 0.09% per annum and will mature in January 2021. For the year ended 31 December 2020, there was a fair value gain of circa €0.7 million recorded in the consolidated statement of profit or loss and other comprehensive income compared to a fair value gain of circa €0.1 million for 2019.

On 12 February 2020, I-RES entered into a cross-currency swap to (i) hedge the US-based loan of USD $ 75 million into €68.8 million effective 11 March 2020 and (ii) convert the fixed interest rate on the US-based loan to a fixed Euro interest rate, maturing in 10 March 2027 and 10 March 2030. Hedge accounting has been applied for the cross-currency swap. For the year ended 31 December 2020, there was a fair value loss of circa €4.37 million recorded in the cashflow reserve in the statement of changes of equity and a reclassification of a €4.29 million loss to consolidated statement of profit or loss and other comprehensive income.

Financing Costs

Financing costs, which include the amortisation of certain financing expenses, interest and commitment costs, increased for the year ended 31 December 2020 to €12.8 million from €12.0 million for the year ended 31 December 2019. Recurring financing costs have increased by €3.9 million in 2020 compared to 2019 (after adjusting for non-recurring financings costs of circa €3.1 million incurred in 2019 relating to the termination of the previous facility of €350 million.) The increase is mainly due to higher leverage during the year due to investments, commitment fees on the undrawn balance of the RCF and higher interest rate on the private placement compared to the RCF. See note 10 of the Consolidated Financial Statements.

Property Portfolio Overview

Property Capital Investments

The Group capitalises all capital investments related to the improvement of its properties. For the year ended 31 December 2020, the Group made property capital investments of €10.0 million, an increase from €8.0 million for the year ended 31 December 2019.

At Beacon South Quarter, in addition to the capital expenditure work that has already been completed, water ingress and fire remediation works were identified in 2016, and I-RES is working with the Beacon South Quarter owners' management company to resolve these matters. In 2017, levies were approved by the members of the Beacon South Quarter owners' management company in relation to these water ingress and fire remedial works. I-RES' portion of these levies as at 31 December 2020 is circa €0.6 million. There is also an active insurance claim with respect to the water ingress and related damage.

Liquidity and Financial Condition

I-RES takes a proactive approach to its debt strategy to ensure the Group has laddering of debt maturities, and the Group's leverage ratio and interest coverage ratio are maintained at a sustainable level.

The Group is in compliance with its financial covenants contained in its facility agreement with Barclays Bank Ireland PLC, Ulster Bank Ireland DAC, The Governor and Company of the Bank of Ireland, Allied Irish Banks, P.L.C and HSBC Bank PLC and its Notes.

Group Total Gearing

At 31 December 2020, capital consists of equity and debt, with Group Total Gearing of 39.2%, which is below the 50% maximum allowed by the Irish REIT Regime, and its debt financial leverage ratio. I-RES seeks to use gearing to enhance shareholder returns over the long term.

I-RES's RCF borrowing capacity is as follows:

As at	31 December 2020	31 December 2019
	(€'000)	(€'000)
Committed Facility	600,000	600,000
Less: Drawdowns	354,020	555,020
Available Borrowing Capacity	245,980	44,980
Weighted Average Cost of RCF⁽¹⁾	2.33%	2.29%

(1) Includes commitment fee of 0.7% per annum is charged on the undrawn portion of the facility and deferred financing cost amortised per annum.

On 12 June 2019, I-RES exercised its option under the Company's facility noted above to extend its committed facilities from €450 million to €600 million and has amended the credit facility to include a new uncommitted accordion facility in the amount of €50 million.

In March 2020, I-RES successfully closed the issue of €130 million Notes and IRES Residential Properties Limited, its subsidiary closed the issue of USD $75 million notes on a private placement basis (collectively, the "Notes"), together circa of €200 million (Euro equivalent), with a weighted average fixed interest rate of 1.92% inclusive of swap costs. The Notes have a weighted average maturity of 9.0 years as at 31 December 2020, laddered over circa six, nine and eleven-year maturities, with the first repayment due in March 2027. The net proceeds of the Notes were used to pay down the RCF. This issuance of Notes strengthened I-RES' balance sheet by creating more liquidity and flexibility, while keeping the interest rates at attractive low levels, and attracting high quality investors for this transaction. In addition, it also enhanced I-RES' funding alternatives.

The Group have a weighted average debt maturity of 5.3 years and no debt maturities before April 2024. The weighted average cost of debt is 2.25% for 2020 including deferred financing costs (2019: 2.29%). I-RES also have undrawn facilities of €144 million available for investment (at 45% Loan To Value ratio) and €11.2 million of cash as at 31 December 2020. Starting in 2020, I-RES maintains a minimum cash balance of €10 million for liquidity purposes. Beyond the committed capex costs of circa €2.1 million, circa €54 million to complete the acquisition of Phoenix Park, and committed development costs of €12.9 million for 2021, there is no other current exposure.

Business Performance Measures

The Group, in addition to the Operational and Financial results presented above, has defined business performance indicators to measure the success of its operating and financial strategies:

Average Monthly Rent ("AMR")

AMR is calculated as actual monthly residential rents, net of vacancies, as at the stated date, divided by the total number of residential units owned in the property. Through active property management strategies, the lease administration system and proactive capital investment programmes, I-RES increases rents as market conditions permit and subject to applicable laws. It has been presented as the Company believes this measure is indicative of the Group's performance of its operations.

Occupancy

Occupancy rate is calculated as the total number of residential units occupied over the total number of residential units owned as at the reporting date. I-RES strives, through a focused, hands-on approach to the business, to achieve occupancies that are in line with, or higher than, market conditions in each of the locations in which it operates. Occupancy rate is used in conjunction with AMR to measure the Group's performance of its operations.

Gross Yield at Fair Value

Gross Yield is calculated as the Annualised Passing Rents as at the stated date, divided by the fair market value of the investment properties as at the reporting date, excluding the fair value of development land and investment properties under development. Through generating higher revenue compared to the prior year and maintaining high occupancies, I-RES' objective is to increase the Annualised Passing Rent for the total portfolio, which will positively impact the Gross Yield. It has been presented as the Company believes this measure is indicative of the rental income generating capacity of the total portfolio.

European Public Real Estate Association ("EPRA") Earnings per Share

EPRA Earnings represents the earnings from the core operational activities (recurring items) for the Group. It is intended to provide an indicator of the underlying performance of the property portfolio and therefore excludes all components not relevant to the underlying and recurring performance of the portfolio, including any revaluation results and results from the sale of properties. EPRA EPS is calculated by dividing EPRA Earnings for the reporting period attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the reporting period. It has been presented as the Company believes this measure is indicative of the Group's performance of its operations.

Net Asset Value

EPRA issued Best Practices Recommendations most recently in October 2019, which gives guidelines for performance matters.

In October 2019, EPRA introduced three EPRA NAV metrics to replace the existing EPRA NAV calculation that was previously being presented. The three EPRA NAV metrics are EPRA Net Reinstatement Value ("EPRA NRV'), EPRA Net Tangible Asset ("EPRA NTA") and EPRA Net Disposal Value ("EPRA NDV"). Each EPRA NAV metric serves a different purpose. The EPRA NRV measure is to highlight the value of net assets on a long term basis. EPRA NTA assumes entities buy and sell assets, thereby crystallising certain levels of deferred tax liability. No deferred tax liability is calculated for I-RES as it is a REIT, and taxes are paid at the shareholder level on the distributions. Any gains arising from the sale of a property are expected either to be reinvested for growth or 85% of the net proceeds are distributed to the shareholders to maintain the REIT status. Lastly, EPRA NDV provides the reader with a scenario where deferred tax, financial instruments, and certain other adjustments are calculated to the full extent of their liabilities.

AMR and Occupancy

As at 31 December	Total Portfolio						Properties owned prior to 31 December 2019 (Like for Like properties)⁽¹⁾						Properties Acquired After 31 December
	2020			2019			2020			2019			2019
	AMR	Occ.%	AMR		Occ. %.	AMR change %	AMR	Occ. %	AMR		Occ. %	AMR change %	AMR	Occ. %
Residential	€1,624	98.4%	€1,596		98.3%	1.8%	€1,610	98.4%	€1,614		99.3%	(0.2)%	€1,778	98. 7%

(1) Adjusted for properties that were disposed in 2020.

The Group's AMR increased 1.8% at 31 December 2020 to €1,624, while residential occupancy remained high at 98.4%, indicative of the strong market fundamentals in the Irish residential rental sector during the Covid-19 pandemic. For like for like properties, the AMR decreased to €1,610 per residential unit as at 31 December 2020, down 0.2% from €1,596 at 31 December 2019. The decrease is cause by the slight decrease of occupancy from 99.3% to 98.4%, lower AMR at one of the high end properties in the portfolio and the rent moratorium on rental renewals since April 2020. During the year, circa 34% of the portfolio units turned and / or renewed, with majority of the units having strong rental increases (a maximum annual rent increase of 4% per annum permitted for properties located in "rent pressure zone" as per the rent regulation). The renewal notices were served only in the first quarter of 2020.

The Government of Ireland declared temporary rent legislation for rent moratorium on rental renewals for residential units as a response to the Covid-19 pandemic from April to September 2020. I-RES is conscious of the challenging times that many people face during the pandemic. As such, I-RES has not served rent renewal notices with rental increases since April 2020 to 31 December 2020. For like for like properties, AMR is used as a measure for sustainable year over year changes in revenue.

Gross Yield at Fair Value

As at	31 December 2020	31 December 2019
	(€'000)	(€'000)
Annualised Passing Rent⁽¹⁾	74,249	72,798
Aggregate fair market value as at reporting date	1,346,683	1,293,241
Gross Yield	5.5 %	5.6 %

(1) 31 December 2020 Annualised Passing rent consist of residential annualised passing rent of €71.6 million and commercial annualised passing rent of €2.7 million.

The portfolio Gross Yield at fair value was 5.5% as at 31 December 2020 compared to 5.6% as at 31 December 2019, excluding the fair value of development land and investment properties under development. The NRI margin was approximately 80.0% for the year ended 31 December 2020 (81.4% for the year ended 31 December 2019).

EPRA Earnings per Share

For the year ended	31 December 2020	31 December 2019
Profit for the year (€'000)	58,263	86,282
Adjustments to calculate EPRA Earnings exclude:
Costs associated with early redemption of debt instrument (€'000)	-	3,153
Gain on disposition of investment properties	(4,432)	-
Changes in fair value on investment properties (€'000)	(19,092)	(56,234)
Changes in fair value of derivative financial instruments (€'000)	(709)	(131)
EPRA Earnings (€'000)	34,030	33,070
Non recurring costs (€'000)	2,334	-
Adjusted EPRA Earnings adjusted for non recurring costs (€'000)	36,364	33,070

Basic weighted average number of shares	522,069,110	478,563,272
Diluted weighted average number of shares	524,130,528	481,508,009

EPRA Earnings per share (cents)	6.5	6.9
Adjusted EPRA EPS adjusted for non recurring costs per share (cents)	7.0	6.9
EPRA Diluted Earnings per share (cents)	6.5	6.9

An increase in EPRA Earnings of 2.9% to €34.0 million (31 December 2019: €33.1 million).

EPRA EPS for the period was 6.5 cents for the year ended 31 December 2020 compared to 6.9 cents for the same period last year. The decline in EPRA EPS is primarily due the non-recurring costs, lower commercial parking revenue, higher bad debt and vacancy post the Covid-19 pandemic declaration compared to their historical trending and higher financing costs. The bad debt increase is also due to a higher allowance for bad debt expense recognized with respect to the commercial portion of the I-RES's mixed-used properties, as a result of the Covid-19 pandemic.

EPRA NAV per Share

31 December 2020

As at	EPRA NRV	EPRA NTA⁽¹⁾	EPRA NDV⁽²⁾
Net assets (€'000)
Adjustments to calculate EPRA net assets exclude:	841,695	841,695	841,695
Fair value of derivative financial instruments (€'000)	84	84	-
Fair value of fixed interest rate debt (€'000)	-	-	36,219
Real estate transfer tax (€'000)⁽³⁾	62,138	-	-
EPRA net assets (€'000)	903,917	841,779	877,914
Number of shares outstanding	525,078,946	525,078,946	525,078,946
Diluted number of shares outstanding	526,289,910	526,289,910	526,289,910

Basic Net Asset Value per share (cents)	160.3	160.3	160.3
EPRA Net Asset Value per share (cents)	171.8	159.9	166.8

31 December 2019

As at	EPRA NRV	EPRA NTA⁽¹⁾	EPRA NDV⁽²⁾
Net assets (€'000)	810,169	810,169	810,169
Adjustments to calculate EPRA net assets exclude:
Fair value of derivative financial instruments (€'000)	788	788	-
Adjustments to calculate EPRA net assets include:
Real estate transfer tax (€'000)⁽³⁾	56,753	-	-
EPRA net assets (€'000)	867,710	810,957	810,169
Number of shares outstanding	521,678,946	521,678,946	521,678,946
Diluted number of shares outstanding	524,529,943	524,529,943	524,529,943
Basic Net Asset Value per share (cents)	155.3	155.3	155.3
EPRA Net Asset Value per share (cents)	165.4	154.6	154.5

(1) Following changes to the Irish REIT legislation introduced in October 2019, if a REIT disposes of an asset of its property rental business and does not (i) distribute the gross disposal proceeds to shareholders by way of dividend; (ii) reinvest them into other assets of its property rental business (whether by acquisition or capital expenditure) within a three-year window (being one year before the sale and two years after it); or (iii) use them to repay debt specifically used to acquire, enhance or develop the property sold, then the REIT will be liable to tax at a rate of 25% on 85% of the gross disposal proceeds, subject to having sufficient distributable reserves. For the purposes of EPRA NTA, the Company have assumed any such sales proceeds are reinvested within the required three year window.

(2) Deferred tax is assumed as per the IFRS balance sheet. To the extent that an orderly sale of the Group's asset was undertaken over a period of several years, during which time (i) the Group remained a REIT; (ii) no new assets were acquired or sales proceeds reinvested; (iii) any developments completed were held for three years from completion; and (iv) those assets were sold at 31 December 2020 valuations, the sales proceeds would need to be distributed to shareholders by way of dividend within the required time frame or else a tax liability amounting to up to 25% of distributable reserves plus current unrealised revaluation gains could arise for the Group.

(3) This is the purchaser costs amount as provided in the valuation certificate. Purchasers' costs consist of items such as stamp duty on legal transfer and other purchase fees that may be incurred and which are deducted from the gross value in arriving at the fair value of investment for IFRS purposes. Purchasers' costs are in general estimated at 9.96% for commercial and 4.46% for residential.

ESG Strategy

Covid-19's ongoing public health crisis, and the growing pressures resulting from social unrests, increasingly creates opportunities as well as risks for our business and our key stakeholders. We continue to support our employees both in the Company and the Manager, our residents, our communities, our vendor partners and our investors during these turbulent times.

In 2020, we continued formalizing our ESG strategy. We remain committed to incorporating ESG measures across our business, including our acquisitions and development projects, day-to-day operations, asset management, and stakeholder engagement. We also continue to explore opportunities for longer-term value creation across all facets of our business.

In establishing the necessary building blocks to move our sustainability strategy forward, we achieved the following deliverables in 2020:

• Maintaining the wellbeing of our employees, including our Manager's employees, by promoting online resources to facilitate their remote working.

• Donated a total of 52 rent and utility-free furnished apartments at Waterside, Tallaght Cross West and in Elm Park for the use of doctors and nurses at various hospitals around the city as a thank you and support for their vital and hard work.

• Switched to 100% renewable electricity for all I-RES owned common areas, resulting in an estimated annual savings of over €35,200 and 218,712 kg in carbon emissions, which is the equivalent to the annual energy use of 25 average homes. Transitioning to 100% renewable energy is anticipated to save close to 21% in total yearly electricity costs.

• Supporting community events during Covid-19, including raising funds in support of the Dublin Neurological Institute to help people with Parkinson's, multiple sclerosis, dementia and other neurological diseases.

• Initiated our inaugural GRESB submission process, the results of which will underpin the development of our ESG strategy going forward.

We will provide more comprehensive reporting on ESG in our Annual Report.

Market Update

Irish Economic Outlook

The spread of Covid-19 from March 2020 caused unprecedented economic and social disruption in Ireland. While initial economic forecasts envisaged a sharp 'double-digit' contraction in GDP for the year, performance has been resilient.

This is primarily due to the strength of the Foreign Direct Investment sector, concentrated in ICT, pharmaceuticals and medical technology. The IDA recently reported that employment in IDA-supported companies grew by 3.6% in 2020. As a result, tax revenue performed much more resiliently during 2020 than expected, falling by just 4% year on year ("yoy"). This was driven by robust corporate tax (+9% yoy) and income taxes receipts (-1% yoy).

In contrast, government-imposed restrictions have resulted in a sharp drop in consumer spending, and in a decline in the financial performance of sectors such as retail, aviation, hospitality and tourism which were amongst the sharpest recorded in Europe.

The resulting economic effect is that Ireland is due to report one of the stronger GDP performances in 2020 compared to other European countries. The CBI recently upgraded its GDP forecast to +2.5% for 2020 and +3.8% for 2021. The unemployment rate, which was circa 5% at the start of the year, is now set to average 18.4% through 2020 (ESRI).

Government Covid-19 Economic & Financial Supports

Throughout the pandemic, the Government has continued to provide a range of financial supports to businesses and the wider public. In 2020, fiscal supports of over €25 billion were provided, mostly in the form of 'direct' taxation and expenditure measures. Given the continuing presence of the pandemic, the Government has also committed to maintaining these supports for as long as necessary, with the Budget 2021 providing further stabilisation measures of circa €12.5 billion1 for the Irish economy.

As a result of the significant Covid-19 financial supports, Irish Government borrowing increased significantly ahead of previous forecasts. Ireland recorded a deficit of €19 billion in 2020 (5.5% of GDP), compared to a €2 billion surplus in 2019. The deficit is among the smallest in the EU, held up by resilient income and corporate taxes.

Income supports remain in place for individuals and businesses experiencing job disruption due to Covid-19. The income supports, primarily Pandemic Unemployment Payment ("PUP") and the Employment Wage Subsidy Scheme ("EWSS"), help either replace, or subsidies, individuals' salaries, with payments ranging from €203 to €350 per week linked to prior earnings. The government has committed to maintaining the income supports until at least 31 March 2021 and signalled that it will extend it as necessary.

In January 2021 Ireland entered a third wave of the pandemic, resulting in a third lockdown from 1 January 2021; this includes the closure of schools, construction, non-essential retail and hospitality, among other sectors. The lockdown of the economy has resulted in a sharp increase in PUP claimants to 481,000 at 8 February 2021, implying a Covid-19 adjusted unemployment rate of 26%. This is still well below the 602,000 peak in April 2020. While job gains are likely when the economy re-opens, most forecasts expect pace of job recovery to slow, with the unemployment rate expected to remain in double digits by the end of 2021.

In relation to businesses, measures were focused on increasing liquidity, including deferred taxation payments, payment breaks on business loans, and loan guarantees for SMEs. Direct transfers were also provided for, by way of 'Restart' grants and waivers on commercial rates. Taxation instruments were also implemented, with a tax rebate designed to boost out-of-season demand for accommodation and food ('stay-and-spend'), as well as a temporary reduction in the standard rate of VAT from 23% to 21% to boost personal consumer spending.

Ireland has commenced its vaccination programme which is providing more confidence in relation to improvements in the second half of 2021.

(1) Department of Finance -'Taking Stock: The Fiscal Response to Covid-19', November 2020

Housing Supply & Demand Outlook

There remains a significant supply and demand imbalance for all tenures of housing stock in Ireland. Annual demand is estimated at 35,000 units, driven by our young and fast-growing population, however, supply has been consistently below this.

Due to the various social distancing and other requirements put in place in response to Covid-19, including the closure of non-essential construction sites for a 7 week period, the CSO reported that house completions decreased to circa 20,700 in 2020. This is below the original estimate of 26,000 for 2020 and the over 21,000-unit completions in 2019. The Central Bank of Ireland is forecasting new house completions of around 21,500 in 2021 and 23,500 in 2022.

Despite Covid-19, the various measures of housing demand have remained resilient for all tenures.

• Irish house prices have remained relatively stable to date, with the Irish Residential Property Price Index ("RPPI") up marginally at (+0.2%) in November 2020 compared to November 2019. The performance is far stronger than the projections earlier in the year for high single, or double-digit declines.

• The mortgage market has performed strongly with Banking & Payments Federation Ireland ('BPFI") data indicating that December mortgage approvals were up 40.5% yoy to €979 million. December marked the fourth consecutive month where mortgage approvals have registered strong growth following some weakness earlier in 2020. This period of catch-up means that mortgage approvals equaled €10.3 billion in 2020, down only 6.7% from €11.1 billion in 2019. The average approval for house purchase in December was €253,200, pointing to inflationary pressure, up 4.4% on the year.

• Measures of rent price inflation have softened. The official Residential Tenancies Board (RTB) measure increased nationally by 1.4% yoy in Q3 2020. Similarly, Daft.ie reported that rents increased +0.9% yoy in Q3 2020. The CPI Private rents Index for December was down (2.9%) on the year. These rent indices have declined from levels that had exceeded growth permitted by the annual 4% rent caps. In addition, rents at higher price points have been more impacted as there is a more limited pool of tenants.

• The stock of available units for rent has increased over the year, albeit from a very low base. As at 1 February 2021 there were 3,739 units available for rent (Daft).

Investment Policy

Focus Activity

The Group's aim is to assemble a portfolio within its focus activity of acquiring, holding, managing and developing investments primarily focused on residential rental accommodations and ancillary and/or strategically located commercial property on the island of Ireland, principally within the greater Dublin area and other major urban centres on the island of Ireland (the "FocusActivity"). The vast majority of such properties will form the Group's property investment portfolio for third party rental. The Group may also acquire indebtedness secured by properties (including in respect of buy-to-let properties) within its Focus Activity where it intends to gain title to and control over the underlying property. There is no limit on the proportion of the Group's portfolio that consists of indebtedness secured by properties.

Consistent with the Focus Activity, the Group may consider property development, redevelopment or intensification opportunities, in particular, the completion of building out the Group's current development sites, where the directors of the Company consider it appropriate having regard to all relevant factors (including building risk, lease up risk, expected returns and time to complete).

The Group may also acquire properties and portfolios which include other assets outside of the Focus Activity, subject always to a maximum limit of 20% of the overall gross value of the Group's property assets, provided there is a disposal plan in place in connection with such assets which have been deemed non-strategic and do not meet the Group's investment objectives or which could otherwise have an adverse effect on the Group's status as an Irish real estate investment trust.

Gearing

The Group will seek to use gearing to enhance shareholder returns over the long term. The Group's gearing, represented by the Group's aggregate borrowings as a percentage of the market value of the Group's total assets, will not exceed the 50% maximum permitted under the Irish REIT Regime. The board of the Company (the "Board") reviews the Group's gearing policy (including the level of gearing) from time to time in light of then-current economic conditions, relative costs of debt and equity capital, fair value of the Group's assets, growth and acquisition opportunities and other factors the Board may deem appropriate, with the result that the Group's level of gearing may be lower than 50%. The Board may also from time to time consider hedging or other strategies to mitigate interest rate risk.

Investment Structures

The Group also has the ability to enter into a variety of investment structures, including joint ventures, acquisitions of controlling interests, acquisitions of minority interests or other structures (whether by way of equity or debt) including, but not limited to, for revenue producing purposes in the ordinary course of business, within the parameters stipulated in the Irish REIT Regime. There is no limit imposed on the proportion of the Group's portfolio that may be held through such structures.

Warehousing / Pipeline Agreements

If the Group is unable to participate in sales processes for property investments because it has insufficient funds and/or debt financing available to it, including where its gearing is at or close to the maximum permitted level under the Irish REIT Regime, the Group is permitted to acquire property investments that meet the criteria specified in its Investment Policy (including the acquisition of shares in property holding companies) from time to time in accordance with the terms of warehousing or pipeline arrangements entered into or to be entered into by it with third parties, in each case, without shareholder approval and for a price calculated on a basis that has been approved in advance by the directors of the Company.

Restrictions

Pursuant to the Irish REIT Regime, the Group is required, amongst other things, to conduct a Property Rental Business consisting of at least three properties, with the market value of any one property being no more than 40% of the total market value of the properties in the Group's Property Rental Business. Further, at least 75% of the Group's annual Aggregate Income will need to be derived from its Property Rental Business and at least 75% of the market value of its assets, including uninvested cash, will need to relate to its Property Rental Business.

In addition to the foregoing, the Group will not do anything that would cause the Group to lose its status as a real estate investment trust under the Irish REIT Regime.

Changes to the Investment Policy

Material changes to the Group's Investment Policy set out above may only be made by ordinary resolution of the shareholders of the Company in accordance with the Listing Rules of Euronext Dublin and notified to the market through a Regulatory Information Service. If the Company breaches its Investment Policy, the Company is required to make a notification via a Regulatory Information Service of details of the breach and of actions it may or may not have taken. A material change in the published Investment Policy would include the consideration of investments outside of the Focus Activity, other than as permitted under this Investment Policy.

For as long as the Company remains admitted to the Official List maintained by Euronext Dublin, any changes to the Company's Investment Policy must be made in accordance with the requirements of the Listing Rules of Euronext Dublin.

With a view to implementing the Investment Policy, the Company has adopted an Investment Strategy, a copy of which is set out in each annual report of the Company, and which is subject to such amendments as made by the Board from time to time.

I-RES has invested in accordance with the investment policy. Please refer to the property overview table on page 15 for further details.

Principal risks and uncertainties

The directors of the Company set out below the principal risks and uncertainties that the Group is exposed to and that may impact performance in the coming financial year. The Group proactively identifies, assesses, monitors and manages these risks with the assistance of the Manager and CAPREIT LP, as well as the combined expertise of its Board. The principal risks and uncertainties, along with their strategic impact on the business and mitigating factors, have been outlined. The Group has also provided its belief on how the risk has trended (remained stable, is increasing or is decreasing) from the year ended 31 December 2019.

Risk	Prolonged Pandemic A widespread and prolonged pandemic will have a negative effect on Ireland's economy and capital markets, and in turn may have an adverse impact on the performance of the Group.
Strategic Impact	High The global spread of Covid-19 has resulted in major disruptions to both businesses and personal lives. The Group, its Manager, and its key vendors and service providers will experience disruptions to day-to-day operations if a significant portion of their employees become ill or are required to be quarantined for extended periods. The Group's growth strategy will be affected due to severe government restrictions impacting construction sites, in-suite works, physical viewing of properties and travel restrictions to within a 5km radius. There is significant uncertainty as to what the overall economic impact will be and how long a recovery will take. This could result in a negative impact to the Group's cash flows due to increased unemployment, reduced business activity, increased costs and further government measures related to the property rental industry taken to ease the economic impact of the Covid-19 pandemic
Mitigation Strategy	The Group and its Manager actively monitor and manage the evolving risks and measures being implemented by Government in relation to the pandemic, and their effect on the business and macroeconomic environment. The Group convened regular crisis management team meetings from the outset as well as an ongoing communications programme with all stakeholders. The board met regularly to monitor the evolving situation and receives regular updates from the CEO and Manager. The crisis management team consists of senior leadership and subject matter experts in order to provide direction to various elements of the business. The Manager activated its business continuity plan, requiring all head office employees to work from home where possible, and reduced work at the properties to essential works only, while implementing social distancing protocols, and adhering to guidance by the Health Services Executive. The Group is taking steps to ensure the safety, health and well-being of all employees, residents in our properties, business partners, shareholders, and other stakeholders to ensure the ongoing operation and performance of the business, including increased sanitization, communications programmes, increased use of technology, ensuring adherence to public health guidelines and Government regulations, as well as providing ongoing support to tenants and employees. Given the difficult environment for tenants, the Group continues to work with tenants, and housing authorities to minimize the impact of the Covid-19 virus on tenants and their homes.
Risk Trending Since 31 December 2019	Increasing While governments around the world, and health authorities are taking significant measures to slow the spread of the Covid-19 virus and roll out vaccines, it does appear that there will be an economic and health impact through much of 2021. In line with the measures introduced by the Irish government, the Group has implemented a temporary moratorium on rent increases (to 12 April 2021) and longer notice periods for termination of tenancies based on rent arrears (90 days but no earlier than 13 April 2021) , for those tenants who are deemed "Relevant Persons" under the Planning and Development, and Residential Tenancies Act, 2020. Relevant Persons are, broadly, tenants who are in receipt of Government Covid-19 related payments and unable to pay their rents. Rent increases that would have applied were it not for the emergency period cannot be retrospectively claimed once the emergency period is over. The Residential Tenancies Act 2020 also provides for a ban on evictions taking effect for all tenancies (subject to limited exceptions) where there is a 5km travel restriction in place. There is currently a 5km travel restriction in place and therefore this ban is currently in effect. Additionally, the Irish government is currently providing support measures for workers, and business affected by the Covid-19 pandemic until the end of March 2021. Given the restrictions that continue to be in place, it will take a prolonged period of time for businesses to return to normal operations.
Risk	Economy A general weakening of the Irish economy.
Strategic Impact	Medium Reduced economic activity could have a negative impact on business performance, asset values and net rental income, which could affect cash flows going forward.
Mitigation Strategy	The Group's business is primarily focused on Dublin, which has been more resilient economically than other areas of Ireland in the past. On an ongoing basis, the CEO and the Manager monitors business performance, economic and macro environment reviews and residential sector developments, and reports to the Board on a regular basis. The Board regularly considers the impact of the wider economic and macro outlook on the Group's strategy.
Risk Trending Since 31 December 2019	Increasing
	Covid-19 The Covid-19 pandemic has had a significant impact on employment and economic activity in Ireland. The Irish government is currently providing support measures for workers, and business affected by the Covid-19 pandemic until the end of March 2021, and the Group has not served rent increases since the pandemic declaration. Significant government deficits arising from the pandemic may impact tax policy in the future. The long-term economic impact of Covid-19 is yet to be determined
Risk	Regulation and Legislation The government may introduce legislation, including tax and rent legislation that has an adverse impact on the performance of the REIT.
Strategic Impact	Medium Residential tenancies legislation has continued to evolve over the past few years. Amongst other requirements, it currently limits annual rent increases to 4% per annum (not to exceed the "market rent") in "rent pressure zones", which covers all of the Group's investment properties. The current rent increase restrictions applying in Dublin and Cork City are due to end on 31 December 2021. It is expected that new or amending legislation will be introduced but it is uncertain what the effect of any new or amending legislation will be. On 27 June 2020, a new coalition government was formed. It is the Company's understanding that the government plans a multi-pronged approach to resolving issues in the housing market, including increasing the availability of affordable housing, as well as incentivizing home ownership which could have an impact on demand for private rented accommodation going forward. New or amended regulations could have a negative impact on the Group's revenues, earnings, and asset values. The government continues to implement new regulations including in relation to rents and termination of tenancies as part of public health measures. Additionally, as legislation changes, the Company and the Manager may have to incur incremental costs to comply, such as staff training, modification of procedures and technology systems, and consultations with professional advisors.
Mitigation Strategy	The Group takes account of the current regulations, rent legislation as well as the economic environment, in considering the Group's strategy, its investment decisions, expectations of financial performance and growth. The Group and its Manager also monitor and manage costs keeping in mind any limitations on revenue growth. If any new legislation is enacted, relevant staff will receive training and education in order to ensure compliance with regulations and legislation.
Risk Trending Since 31 December 2019	Increasing There continues to be a significant supply constraint in the Irish housing market, coupled with increasing demand due to population growth and other demographic factors. This has been further exacerbated due to the pandemic with supply of new housing constrained as a result of restrictions on construction activity. Housing as a result is a significant political issue and features as a key policy measure in the Programme for Government. The government has announced measures to increase direct supply of social and affordable housing including in partnership with the private sector. The Minister for Housing and Department of Housing are currently reviewing housing, planning and regulatory policies as well as strategy for housing, planning and development in Ireland going forward.
	Covid-19 In line with the measures introduced by the Irish government, the Group has implemented a temporary moratorium on rent increases (to 12 April 2021) and longer notice periods for termination of tenancies based on rent arrears (90 days but no earlier than 13 April 2021) , for those tenants who are deemed "Relevant Persons" under the Planning and Development, and Residential Tenancies Act, 2020. Relevant Persons are, broadly, tenants who are in receipt of government Covid-19 related payments and unable to pay their rents. Rent increases that would have applied were it not for the emergency period cannot be retrospectively claimed once the emergency period is over. The Residential Tenancies Act 2020 also provides for a ban on evictions taking effect for all tenancies (subject to limited exceptions) where there is a 5km travel restriction in place. There is currently a 5km travel restriction in place and therefore this ban is currently in effect.
Risk	Access to Capital The ability to access capital may become limited, which would impact the growth strategy of the Group.
Strategic Impact	Medium If the Group is unable to source debt financing at attractive rates or raise equity, it may not be able to meet its growth objectives through acquisitions and development or preserve its existing assets through maintenance or capital expenditures.
Mitigation Strategy	The CEO and CFO have developed relationships with lenders, both in Ireland and internationally, which provide ongoing financing possibilities for the Group. The quality of the Group's property portfolio and the gearing target of 45% on total assets (particularly apartments) are attractive credit characteristics for potential lenders, which to date have facilitated the raising of debt financing. The Group currently has a revolving and accordion credit facility of up to € 600 million and Notes Private Placement of €200 million. The Group invests in properties that generate a strong rate of return for its investors and, in turn, increases the attractiveness of its shares and dividends. The Group actively manages its liquidity needs and monitors capital availability.
Risk Trending Since 31 December 2019	Stable At 31 December 2020 the Group had drawn on its credit facility in the amount of €354 million and Notes Private Placement of €198.9 million. The Group continues to monitor liquidity needs to ensure that future capital requirements are anticipated and met within the limits of its leverage thresholds. Based on its financial position and performance, as well as its relationships with lenders and current and potential investors, the Group believes that it has the ability to obtain debt financing and to raise equity at the appropriate time.
Risk	Cost of Capital and Loan to Value Ratio Interest rates increase, and/or property valuations decrease, resulting in higher debt service costs and restrictiveness of future leveraging opportunities. Investors' expected rate of return increases, resulting in pressure to increase dividend yields.
Strategic Impact	Medium The Group is exposed to risks associated with movements in interest rates on its floating rate bank debt, as well as movements in property valuations. Significant Increases in interest rates, and the cost of equity, could, affect the Group's cash flow and its ability to meet growth objectives or preserve the value of its existing assets. Additionally, property valuations are inherently subjective but also driven by market forces. A contraction in property values could make the Group too highly geared, which would result in higher interest costs and covenant breaches.
Mitigation Strategy	The Company's revolving credit facility was refinanced during 2019, increasing the committed facility to €600 million (with an uncommitted accordion facility of €50 million), lowering the interest fixed margin to 1.75% and extending the maturity to 2024, with the option to extend further to 2026 (subject to certain conditions). The Group completed a private placement of Notes of circa €200 million equivalent in March 2020, with a weighted average fixed interest rate of 1.92% inclusive of swap costs. The Notes have a weighted average maturity of 9.7 years, laddered over seven, ten and twelve-year maturities, with the first repayment due in 2027. As of 31 December 2020, the Company has €11.2 million of cash and €246 million of committed undrawn debt under its Revolving Credit Facility. The Group has €15 million in current committed capital and development expenditure. The Group maintains an active programme of engagement with its debt and equity providers, including an ongoing Investor Relations programme. The Group's Group Total Gearing was 39.2% as at 31 December 2020, below the 50% maximum allowed under the Irish REIT rules and the financial covenants under the Group's debt agreements. The Company also maintains significant headroom on its interest coverage ratio. The Group has a proven track record of strong results. Strong results, combined with being in a residential industry with strong real estate fundamentals, helps manage shareholders' expectations and thus, the cost of equity.
Risk Trending Since 31 December 2019	Stable The European Central Bank is not expected to significantly increase interest rates over the short to medium term given the current and anticipated levels of uncertain economic indicators. As such, the Group does not anticipate a material increase in debt financing costs. The valuation of the portfolio as at 31 December 2020, when compared to year end 2019 has increased. This has positively impacted the Group Total Gearing. The increase in valuation is due to continued demand for residential assets by investors and transactions continue to close in 2020 post pandemic with competitive yields.
	Covid-19 The Covid-19 situation continues to evolve quickly, and it may adversely impact the valuation of the Group's investment properties. The Group's reasonable expectations is that the residential asset class should continue to perform well in the long term. In the interim, the Group is making prudent decisions about capital expenditures to ensure that the Group Total Gearing remains under 50%.
Risk	Investment Management Agreement Termination or Material Decline in Manager Performance A material decline in the Manager's performance, or if it is unable to carry out its duties under the Investment Management Agreement, or the Manager serves notice to terminate its services in accordance with the terms of the Investment Management Agreement. The Manager can serve 12 months' notice to terminate their services..
Strategic Impact	Medium The Manager, through its asset management and property management functions, plays an integral part in the day-to-day operations and management of the Group's assets. As a result, a significant decline in its performance or an inability to carry out its mandate or if it chooses to serve notice to terminate its services could lead to a decline in the Group's financial and operating performance, and significant disruption to the Group's operations. The Manager must comply with certain regulations including the Property Services (Regulation) Act and the Alternative Investment Fund Management Directive (AIFMD) of the European Union. Failure to do so, could result in it losing its ability to provide property management and/or asset management services under the Investment Management Agreement to the Group. If the Group had to select another investment manager or chose to internalize the investment manager, there may be interruptions to day-to-day operations, as well as IT systems and telecommunications assets.
Mitigation Strategy	The Manager is made up of a well-regarded multi-disciplinary team of qualified property and finance professionals experienced in the selection, financing and management of property investments. The Board oversees and evaluates the work of the Manager including monitoring key performance indicators such as occupancy, rental revenues, net rental income, collectability of rents and net asset values. Additionally, the Board periodically reviews actual revenues and expenditures against budgets. The Board also has a close working relationship with the Manager. The Manager's compliance and financial professionals spend a considerable amount of time ensuring compliance with the AIFMD requirements, as well as monitoring AIFMD regulations for any changes that impact compliance processes. The Manager's policies and procedures are reviewed regularly to incorporate any changes in legislation or procedure. Additionally, the Manager has engaged third party advisors and firms to assist it in complying with AIFMD and carrying out associated functions, as well as, making required filings to the Central Bank. The Manager regularly reports on its compliance activities relating to AIFMD to the Board of the Company, and the Board of the Manager oversees compliance with the AIFMD to ensure that the Manager meets its regulatory obligations at all time. The Investment Management Agreement provides that, after 1 November 2019, IRES Fund Management may serve 12 months' notice of its intention to terminate the agreement and, if requested by the Company, the Manager will provide transition services for a period of (3) months at the Company's cost. The Investment Management Agreement also provides that the Company has the option to internalise the management of the Company and acquire the shares of the Manager on a liability free (other than liabilities in the ordinary course of business)/cash free basis for €1 on or after 1 November 2020. The review of the IMA by the Related Party Committee (a subcommittee of the Board), in conjunction with advisers, includes evaluating the relative strategic and financial merits of various options available to the Company.
Risk Trending Since 31 December 2019	Stable The Manager has continued to have strong performance as evidenced by the returns being generated on the Group's assets and ability to manage day-to-day operational matters. The Group does not anticipate any material changes in the Manager's ability to continue this performance or its ability to comply with AIFMD regulations. On the expiry date of the initial IMA term on 1 November 2020, the Related Party Committee had not reached agreement on new terms for a revised IMA with the Manager. As a result, the IMA has continued under the existing terms. In addition, the Company announced that it would augment the management resources of the Company in line with its growth strategy and increased scale.
	Covid-19 The Manager activated its business continuity plan, requiring all head office employees to work from home where possible, and reduced work at the properties to essential works only, while implementing social distancing protocols, and adhering to guidance by the Health Services Executive.
Risk	Opportunity to Acquire or Develop Assets Investment opportunities may become limited.
Strategic Impact	Medium The Group may not grow in number of apartments relative to the past if there is a lack of development and acquisition opportunities. Additionally, investment opportunities could be limited if they become overly costly or there is excess competition. If growth opportunities are limited, it will impact the Group's ability to generate growing returns for its shareholders.
Mitigation Strategy	The Group has become a sought-after investor for new investment opportunities that arise in the market. The Company and its Manager have deep market knowledge and have established strong industry relationships, which provide for new growth opportunities. Additionally, the Manager has dedicated staff focused on identifying and evaluating a pipeline of acquisition and development opportunities. The Group focuses on a three-pronged strategy for growth. This involves acquisitions, development opportunities within existing assets, and partnering with developers in relation to new development opportunities.
Risk Trending Since 31 December 2019	Stable Completed assets are in limited supply, and new supply is coming online more slowly than expected. Prior to the recent Covid-19 crisis, competition via new entrants and funds, though moderated, had continued to increase, leading to continued cap-rate compression and reduced opportunity for accretive acquisitions.
	Covid-19 The Covid-19 pandemic has led to restrictions that has slowed activity in the real estate sector, including the buying and selling of assets, as well as construction. It is however, too early to establish the competitive environment post Covid-19.
Risk	Construction Increasing construction costs, cost overruns or delays in completion of development projects or defects in construction or non-compliance with building standards.
Strategic Impact	Medium The Group may not meet its performance targets if there are material cost overruns in excess of budget estimates for development or maintenance works, unanticipated delays in securing planning permissions or delays in timelines for construction works associated with new development or maintenance projects. Increasing costs of construction could also impact returns or the Group's ability to take on construction projects. Furthermore, post construction, structural deficiencies or non-compliance with building code may be discovered which could also impact returns.
Mitigation Strategy	In sourcing/reviewing potential development opportunities, in line with the Company's strategy, the Manager undertakes a detailed investment and viability analysis. This analysis is presented to the CEO and Board. The Board must approve material development opportunities prior to commencement. As part of this approval process, the Manager on behalf of the Company will complete an open tender process, including qualitative and quantitative analysis, thereby ensuring the chosen main contractor has the proven ability and capacity to complete the construction project. The Company retains legal advisers specializing in real estate in order to ensure all contracts for development are market standard. The Manager performs adequate due diligence in conjunction with 3rd party consultants on main contractors before recommending their engagement to the CEO or the Board. These consultants typically provide advice on the form of contract, additional warranties to be provided, historic performance on projects of a similar size and scale, insurance requirements and performance ponds, where necessary and applicable. A technical team, engaged by the Company is retained throughout the course of the project and this is actively managed by the Manager reviewing delivery of the project on specific items such as quality, health and safety and project timelines. The Company also engages an independent cost manager to ensure the contractor billings are in line with the actual work completed. The Group uses lump sum fixed price contracts to minimize cost inflation risk during the construction phase. To protect against structural defects and non-compliances with building standards, the Manager ensures that completion certificates and Opinions of Compliance (in respect of planning permissions and building regulations) from the main contractor and where necessary, third party professionals are engaged by the Company to inspect the building during and upon completion of construction. This has been supplemented in the last number of years by the statutory requirements to engage an Assigned Certifier who manages and reviews the design team and contractor during the project for compliance with the building standards. The Company receives a suite of contracts and collateral warranties from the design team, main contractor, and specialized sub-contractors. Additionally, a defects liability period (typically 12 months) is part of the building contract, during which time a financial holdback will be retained as collateral for any defects that may have arisen 12 months post practical completion of the works. High value and high-risk works' consultant and contractor contracts are for a 12 year period and these can be called upon if design or build defects. arise within this period.
Risk Trending Since 31 December 2019	Stable As a withdrawal agreement between the UK and EU has been reached, the Group will monitor for and adapt to impacts on the supply of construction labour and materials.
	Covid-19 The addition of Covid-19 compliance requirements (including implementing health and safety procedures for the protection of construction workers on site) has added cost, and along with the lockdown experienced over the past few months, has increased timelines of construction projects. While this may cause a backlog of projects and increased cost to build, the long-term effects of Covid-19 on the construction industry and projects are uncertain.
Risk	Political Material changes to the political environment in areas significantly impacting the Group's operations
Strategic Impact	Medium In Ireland, a general election was held on 8 February 2020 and on 27 June 2020 a new coalition government was formed. It is the Company's understanding that the government plans a multi-pronged approach to resolving issues in the housing market, including increasing the availability of affordable housing, as well as incentivizing home ownership. On 23 June 2016, the UK voted to leave the European Union (EU). This withdrawal took place on 31 January 2020, and following a transition period ending 31 December 2020 an agreement was reached between the UK and EU. There continues to be some uncertainty around potential effect of the withdrawal on the Irish economy as the UK is one of Ireland's largest trading partners. The withdrawal will also likely impact immigration, foreign investment, economic and fiscal policy, and regulatory practices.
Mitigation Strategy	The Company engages a public affairs firm to advise in relation to these matters as well as actively participating in industry groups to ensure ongoing consultation and engagement with relevant authorities, regulators and government departments on significant policy and regulatory matters likely to impact on the Company's affairs
Risk Trending Since 31 December 2019	Stable It is the Company's understanding that the new coalition government in Ireland is focused on housing policy as well as increasing housing supply and is engaging with the industry on significant regulations and policy matters. Additionally, as the UK and EU have reached an agreement, the Group will continue to monitor for and adapt to any impacts the withdrawal may have on the Group's operations.
Risk	Concentration Risk The Dublin market experiences material circumstances that results in lower occupancy or demand for rental properties
Strategic Impact	Medium A lack of geographical or asset diversification could lead to a material financial impact to the Group in the event of a decrease in occupancy or lower rents in the Dublin market.
Mitigation Strategy	Dublin has continued to be an economically resilient market. While the bulk of the existing portfolio is diversified across various districts within Dublin, the Company now owns property in Cork and continues to explore opportunities in other areas of Ireland with strong economic fundamentals. The CEO continuously reviews and updates the Board on economic, demographic, social, legal and policy changes or trends that could impact the Group's strategy and business performance. The Manager monitors supply and demand for rental apartments in operating areas where the Group's investment properties are located. Additionally, the Manager monitors and reports on certain key metrics around investment performance and risk, as well as compliance with the Group's stated investment policy, on a quarterly basis to the Board.
Risk Trending Since 31 December 2019	Stable Residential Real estate and economic fundamentals in key urban areas in Ireland continue to remain strong including continued population growth notwithstanding the impact of Covid-19. The level of concentration in Dublin market is within the Group's risk appetite given the diversity of locations across the city, and county as well as the ongoing growth in investment, population and economic activity in the Greater Dublin Area. Accretive opportunities still presented by being focused on the Dublin market.
Risk	Cybersecurity and Data Protection Failure to comply with data protection legislation by the Company or Manager or the Company's data being subject to a cybersecurity attack.
Strategic Impact	Medium Failing to comply with data protection legislation and practices could lead to unauthorized access and fraudulent activities surrounding confidential/non-public business information or personal data, particularly that belonging to the Group's residents. This could result in direct losses to stakeholders, penalties to the Group and/or the Manager for non-compliance, potential liability to third parties and reputational damage to the Group.
Mitigation Strategy	The Manager is responsible for data privacy and protection on behalf of itself and the Group and remains adaptable to constant technological and legislative change. Employees receive regular awareness training on cybersecurity, privacy and data protection. Access to personal data is controlled through physical measures (e.g. locked offices and storage locations, alarm monitoring, cameras), administrative measures (e.g. data minimization, data retention policies, data destruction practices, and audits) and IT security measures (e.g. password protection, firewalls, antivirus, intrusion detection and encryption). Cyber security personnel and third-party consultants/advisors are engaged where required, to assist with assessing the IT environment and cyber risks. The Manager maintains cybersecurity insurance coverage on behalf of itself and the Group and continues to monitor and assess risks surrounding collection, processing, storage, disclosure, transfer, protection, and retention/destruction practices for personal data.
Risk Trending Since 31 December 2019	Increasing As technological change has occurred at a rapid pace, the inherent risks surrounding cybersecurity and data protection have also evolved and continue to evolve at an equally rapid pace. European Union Data Protection legislation (e.g. General Data Protection Regulation and ePrivacy) is increasing in prescriptiveness, obligation and administration. Additionally, issues such as cross border data transfers and vendor risk complexities, pose increasing compliance challenges due to recent legal developments and particularly the Schrems II case, and phishing and social engineering attempts continue at an accelerating pace due to criminal online "business models" focusing on high volume/quick hit ransomware deployment and basic financial fraud via wire transfer.
	Covid-19 With Covid-19 and the requirement for companies to implement work from home measures, the business world has experienced a sizeable increase in cybersecurity attacks and threats, including phishing attempts. The Manager continues to employ the protective measures referenced in the mitigation strategy section of this risk. Additionally, they have increased the awareness and training to employees around cybersecurity risks and have also stepped up the monitoring of potential threats to the information technology landscape.
Risk	Acquisition Risk Investment decisions may be made without consideration of all risks and conditions.
Strategic Impact	Medium Investment assets may decrease in value or result in material unanticipated expenditures subsequent to acquisition as a result of unknown risks and conditions at the time of purchase, including structural deficiencies or non-compliances with building code.
Mitigation Strategy	The Manager engages consultants in carrying out financial, legal, operational, technical and environmental due diligence on every investment opportunity (both acquisitions and development projects) to determine its fit with the Group's stated investment policy. This includes all standard investigations, to evaluate the building structure and condition, compliance with planning and building regulations, and the likely magnitude of capital expenditures over a 3 to 5 year period. The Company has in place framework agreements with third-party experts to work with the Manager in carrying out technical and engineering studies and investigations on potential acquisitions, developments, or forward purchase contracts as well as engaging specialist property lawyers to carry out legal due diligence and to advise on purchase and development contracts. Additionally, a full review is completed in respect of the anticipated current and future income expectations and operational costs associated with managing the asset. The CEO and Board reviews and approves investment proposals for over €1m including consideration of risks identified by the Manager during the due diligence process. All material contracts are executed by the Board. Post-acquisition, the Manager, through prudent operating practices, monitors and manages any property related issues, including building deficiencies, as they arise. Remedial actions identified during the due diligence progress are actioned within relevant timelines post acquisition dependant on the nature of the issue. With respect to newly constructed buildings or forward purchase agreements, a suite of market standard construction protections is sought from the vendor which will typically include; a 12 month defects liability period, collateral warranties from the main contractor and the design team and a 10 year structural defects insurance policy. In buildings which are older at the date of acquisition and dependant on the when the building was constructed it may be possible to assign the outstanding coverage in respect of structural defects insurance and warranties at the time of acquisition.
Risk Trending Since 31 December 2019	Stable The Manager's due diligence practices have not changed substantially since last year as they continue to be consistent with industry norms and align with the Group's risk appetite.
	Covid-19 Additional Covid-19 compliance measures have led to modification of due diligence practices leading to incremental delay and expense.
Risk	Tax Compliance Risk Failure to comply with tax legislation including REIT rules, VAT, and stamp duty.
Strategic Impact	Low If the Group fails to comply with REIT rules or there are changes to tax policies it could result in the loss of REIT status and/or change the tax treatment of the Group's income and thus, decrease the attractiveness of the Company as an investment to current or potential shareholders.
Mitigation Strategy	The Manager proactively monitors and tests the Group's compliance with the rules and regulations affecting REIT status and regularly reviews and considers how the Group's planned operations may impact compliance with these rules. The results of these compliance reviews are reported to the Board on a quarterly basis, at a minimum. The Company and Manager also engage independent tax and legal advisors in relation to compliance monitoring, where needed. There is regular reporting to the Company's Audit Committee of compliance with REIT Rules, tax legislation and regulations as well as other relevant laws and regulations and likely future changes including impacts on the Group. The Manager has dedicated risk and compliance personnel are alert and vigilant regarding these matters and any impending or emerging changes in REIT rules and regulations or tax policies.
Risk Trending Since 31 December 2019	Stable The Group does not believe the risk of non-compliance has changed from last year and the Audit Committee and Manager continue their review and monitoring as well as taking expert advice when necessary.
Risk	Planning Delays in obtaining planning permissions in respect of the Group's development sites leading to delays in commencement and delivery of residential units, and failure to develop on sites with planning permissions may result in levies.
Strategic Impact	Low Planning permission is required from the relevant planning authority prior to the development of the Group's development sites. Delay in achieving planning permission may result in a slower level of portfolio growth and income generation from the development assets.
Mitigation Strategy	The Manager appoints competent professional teams in respect of each development opportunity (including architectural and planning consultants) to advise on the preparation of planning applications. Additionally, the Manager has dedicated resources to actively manage the development process on behalf of the Group. The appointed project management team continuously reviews project specific risks matrices for each project stage.
Risk Trending Since 31 December 2019	Stable The Strategic Housing Development planning application process allows for greater consultation with authorities prior to submission of planning applications. This process relates to residential developments of over 100 units.

Consolidated Statement of Financial Position

As at 31 December 2020

	Note	(Unaudited) 31 December 2020 €'000	(Audited) 31 December 2019 €'000
Assets
Non-Current Assets
Investment properties	5	1,380,354	1,359,201
Property, plant and equipment	7	9,722	10,088
		1,390,076	1,369,289
Current Assets
Other current assets	8	15,502	11,786
Derivative financial instruments	16	770	-
Cash and cash equivalents		11,193	6,979
		27,465	18,765
Total Assets		1,417,541	1,388,054

Liabilities
Non-Current Liabilities
Bank indebtedness	10	350,049	549,851
Private placement note	11	189,002	-
Lease liability	20	9,486	9,872
Derivative financial instruments	16	8,075	788
		556,612	560,511
Current Liabilities
Accounts payable and accrued liabilities	9	11,588	10,216
Derivative financial instruments	16	84	-
Security deposits		7,562	7,158
		19,234	17,374
Total Liabilities		575,846	577,885

Shareholders' Equity
Share capital	13	52,507	52,167
Share premium	13	500,440	497,244
Share-based payment reserve		1,169	1,147
Cashflow hedge reserve	16	(77)	-
Retained earnings		287,656	259,611
Total Shareholders' Equity		841,695	810,169
Total Shareholders' Equity and Liabilities		1,417,541	1,388,054
IFRS Basic NAV per share	25	160.3	155.3

The accompanying notes form an integral part of these consolidated financial statements

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 December 2020

	Note	(Unaudited) 31 December 2020 €'000	(Audited) 31 December 2019 €'000
Operating Revenue
Revenue from investment properties	14	74,744	62,097
Operating Expenses
Property taxes		(754)	(669)
Property operating costs		(14,215)	(10,891)
		(14,969)	(11,560)
Net Rental Income ("NRI")		59,775	50,537
General and administrative expenses		(7,396)	(4,288)
Asset management fee	21	(4,444)	(4,024)
Share-based compensation expense	12	(322)	(236)
Net movement in fair value of investment properties	5	19,092	56,234
Gain on disposal of investment property	5	4,432	-
Gain on derivative financial instruments	16	709	131
Depreciation of property, plant and equipment	7	(526)	(32)
Lease interest	6	(241)	(4)
Financing costs	15	(12,816)	(12,036)
Profit for the Year		58,263	86,282

Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss:
Cash flow hedges - effective portion of changes in fair value		(4,533)	-
Cash flow hedges - cost of hedging deferred		163
Cash flow hedges - reclassified to profit or loss		4,293	-
Other Comprehensive income for the period		(77)	-
Total Comprehensive Income for the Year Attributable to Shareholders		58,186	86,282

Basic Earnings per Share (cents)	24	11.2	18.0
Diluted Earnings per Share (cents)	24	11.1	17.9

The accompanying notes form an integral part of these consolidated financial statements

Consolidated Statement of Changes in Equity

For the year ended 31 December 2020

	Note	Share Capital	Share Premium		Retained Earnings		Share- based payments Reserve		Cashflow hedge Reserve		Total
(Unaudited)		€'000	€'000		€'000		€'000		€'000		€'000
Shareholders' Equity at 1 January 2020		52,167	497,244		259,611		1,147		-		810,169
Total comprehensive income for the year
Profit for the year		-	-		58,263		-		-		58,263
Other comprehensive income for the year		-	-		-		-		(77)		(77)
Total comprehensive income for the year		-	-		58,263		-		(77)		58,186

Transactions with owners, recognised directly in equity
Long-term incentive plan	12	-	-		-		322		-		322
Share issuance	13	340	3,196		300		(300)		-		3,536
Dividends paid	19	-	-		(30,518)		-		-		(30,518)
Transactions with owners, recognised directly in equity		340	3,196		(30,218)		22		-		(26,660)

Shareholders' Equity at 31 December 2020		52,507	500,440		287,656		1,169		(77)		841,695

(Audited)	Note	Share Capital €'000		Share Premium €'000		Retained Earnings €'000		Share- based payments Reserve €'000		Cashflow hedge Reserve €'000	Total €'000
Shareholders' Equity at 1 January 2019		43,414		370,855		203,467		988		-	618,724
Total comprehensive income for the year
Profit for the year		-		-		86,282		-		-	86,282
Total comprehensive income for the year		-		-		86,282		-		-	86,282

Transactions with owners, recognised directly in equity
Long-term incentive plan	12	-		-		-		236		-	236
Share issuance	13	8,753		126,389		(3,052)		(77)		-	132,013
Dividends paid	19	-		-		(27,086)				-	(27,086)
Transactions with owners, recognised directly in equity		8,753		126,389		(30,138)		159		-	105,163

Shareholders' Equity at 31 December 2019		52,167		497,244		259,611		1,147		-	810,169

The accompanying notes form an integral part of these consolidated financial statements

Consolidated Statement of Cash Flows

For the year ended 31 December 2020

	Note	(Unaudited) 31 December 2020 €'000	(Audited) 31 December 2019 €'000
Cash Flows from Operating Activities:
Operating Activities
Profit for the Year		58,263	86,282
Adjustments for non-cash items:
Fair value adjustment - investment properties	5	(19,092)	(56,234)
Gain on disposal of investment property		(4,432)	-
Depreciation of property, plant and equipment	7	526	32
Amortisation of other financing costs	20	1,409	2,486
Share-based compensation expense	12	322	236
Gain on derivative financial instruments	16	(709)	(131)
Allowance for expected credit loss		991	-
Straight-line rent adjustment		44	21
Interest accrual relating to derivatives		5	6
		37,327	32,698
Net income items relating to financing and investing activities		11,648	9,239
Changes in operating assets and liabilities	20	(416)	1,958
Net Cash Generated from Operating Activities		48,559	43,895
Cash Flows from Investing Activities
Net proceeds from disposal of investment property		47,895	-
Deposits on acquisitions		(5,444)	(2,284)
Acquisition of investment properties		(17,470)	(344,684)
Development of investment properties		(15,799)	(24,768)
Investment property enhancement expenditure		(10,336)	(7,633)
Direct leasing cost		(150)	(47)
Purchase of property, plant and equipment	7	(160)	-
Net Cash Used in Investing Activities		(1,464)	(379,416)
Cash Flows from Financing Activities
Financing fees	20	(2,595)	(5,990)
Interest paid	20	(10,771)	(9,677)
Credit Facility drawdown	20	17,000	637,451
Credit Facility repayment	20	(218,000)	(391,590)
Proceeds from private placement debt	20	196,342	-
Cash settlement on exchange of swap		2,511	-
Lease payment	6	(386)	(247)
Proceeds on issuance of shares	20	3,536	135,142
Share issuance costs		-	(3,129)
Dividends paid to shareholders	19	(30,518)	(27,086)
Net Cash (Used in)/Generated from Financing Activities		(42,881)	334,874
Changes in Cash and Cash Equivalents during the Year		4,214	(647)
Cash and Cash Equivalents, Beginning of the Year		6,979	7,626
Cash and Cash Equivalents, End of the Year		11,193	6,979
The accompanying notes form an integral part of these consolidated financial statements

Notes to Consolidated Financial Statements

1. General Information

Irish Residential Properties REIT plc ("I-RES" or the "Company") was incorporated in Ireland on 2 July 2013 as Shoreglade Limited (formerly known as CAPREIT Ireland Limited, Irish Residential Apartments REIT Limited and Irish Residential Properties REIT Limited). On 16 April 2014, I-RES obtained admission of its ordinary shares to the primary listing segment of the Official List of Euronext Dublin for trading on the regulated market for listed securities of Euronext Dublin. Its registered office is South Dock House, Hanover Quay, Dublin 2, Ireland. Ordinary shares of I-RES are listed on the Main Securities Market of Euronext Dublin under the symbol "IRES".

I-RES was previously a wholly-owned subsidiary of CAPREIT Limited Partnership ("CAPREIT LP"). As at 31 December 2020, CAPREIT LP's interest in I-RES was 18.8% (31 December 2019: 18.3%).

IRES Residential Properties Limited of South Dock House, Hanover Quay, Dublin 2, Ireland is a wholly-owned consolidated subsidiary of I-RES, acquired on 31 March 2015, and owns directly the beneficial interest of its properties. I-RES and IRES Residential Properties Limited together are referred to as the "Group" in this financial information. The Group owns interests in residential rental accommodations, as well as commercial and development sites, the majority of which are located in and near major urban centres in Dublin, Ireland. Specifically, IRES Residential Properties Limited owns an interest in the "Rockbrook Portfolio", which consists of 81 apartments at Rockbrook Grande Central and 189 apartments at Rockbrook South Central, mixed-use commercial space of approximately 4,665 sq. m., a development site of approximately 1.13 hectares and associated basement car parking.

2. Significant Accounting Policies

a) Basis of Preparation

This financial information has been derived from the information to be used to prepare the Group's consolidated financial statements for the year ended 31 December 2020 in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU"), IFRS Interpretations Committee ("IFRIC") interpretations and those parts of the Companies Act 2014 applicable to companies reporting under IFRS. The financial information for the years ended 31 December 2020 and 31 December 2019 has been prepared under the historical cost convention, as modified by the revaluation of investment properties, derivative financial instruments at fair value and share options at grant date through the profit or loss in the consolidated statement of profit or loss and other comprehensive income.

The financial information presented herein does not amount to statutory financial statements that are required by Section 347 of the Companies Act 2014 to be annexed to the annual return of the Group. The financial information does not include all the information and disclosures required in the annual financial statements. The purpose of this financial information is for the provision of information to shareholders. The statutory financial statements for the year ended 31 December 2019 have been attached to the annual return of the Company and filed with the Registrar of Companies. The audit report on those statutory financial statements was unqualified and did not contain any matters to which attention was drawn by way of emphasis. The statutory financial statements for the year ended 31 December 2020 will be annexed to the next annual return of the Group and filed with the Registrar of Companies.

This announcement has been prepared on the basis of the results and financial position that the directors expect will be reflected in the audited statutory accounts when these are completed. The preliminary announcement has been approved by the Board of Directors. It is expected that the annual report and statutory consolidated financial statement for the year ended 31 December 2020 will be approved by the Directors and reported on by the auditors on 10 March 2021.

The consolidated financial statements of the Group are prepared on a going concern basis of accounting and under the historical cost convention, as modified by the revaluation of investment properties, derivative financial instruments at fair value and share options at grant date in each case, as appropriate at either fair value through profit or loss or other comprehensive income in the consolidated statement of profit or loss and other comprehensive income. The consolidated financial statements of the Group have been presented in euros, which is the Company's functional currency.

The consolidated financial statements of the Group cover the 12-month period from 1 January 2020 to 31 December 2020.

The Group has not early adopted any forthcoming International Accounting Standards Board ("IASB") standards. Note 2(r) sets out details of such upcoming standards.

Going concern

The Group meets its day-to-day working capital requirements through its cash and deposit balances. The Group's plans indicate that it should have adequate resources to continue operating for the foreseeable future. Post the Covid-19 pandemic declaration on 16 March 2020, the Group's occupancy rate remained strong at approximately 98%. The Group also has a strong statement of financial position with sufficient liquidity and flexibility in place to manage through this period of uncertainty. The Group can draw an additional €144 million from its RCF while maintaining a maximum 50% Loan to value ratio as at 31 December 2020, and is maintaining a minimum cash balance of €10 million for liquidity purposes. As at 31 December 2020, the current undrawn RCF amount is €246 million. The Group continues to generate a positive cashflow from operations and a profit for the year ended 31 December 2020. Accordingly, the directors consider it appropriate that the Group adopts the going concern basis of accounting in the preparation of the consolidated financial statements.

b) Basis of Consolidation

These consolidated financial statements incorporate the financial statements of I-RES and its subsidiary, IRES Residential Properties Limited. I-RES controls IRES Residential Properties Limited by virtue of its 100% shareholding in that company. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Subsidiaries

Subsidiaries are entities controlled by I-RES. I-RES controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect these returns through its power over the entity. The financial information of subsidiaries (except owner management companies) is included in the consolidated financial statements from the date on which control commences until the date on which control ceases. I-RES does not consolidate owner management companies in which it holds majority voting rights. For further details, please refer to note 21.

c) Investment Properties and Investment Properties Under Development

Investment Properties

The Group considers its income properties to be investment properties under IAS 40, Investment Property ("IAS 40"), and has chosen the fair value model to account for its investment properties in the consolidated financial statements. Under IFRS 13, Fair Value Measurement ("IFRS 13"), this IFRS defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Investment properties are treated as acquired at the time when the Group assumes the significant risks and returns of ownership, which normally occurs when the conveyancing contract has been performed by both buyer and seller and the contract has been deemed to have become unconditional and completed. Investment properties are deemed to have been acquired when the buyer has assumed control of ownership and the contract has been completed.

Investment properties comprise investment interests held in land and buildings (including integral equipment) held for the purpose of producing rental income, capital appreciation or both, but not for sale in the ordinary course of business.

All investment properties are initially recorded at cost, which includes transaction and other acquisition costs, at their respective acquisition dates, and are subsequently stated at fair value at each reporting date, with any gain or loss arising from a change in fair value recognised through profit or loss in the consolidated statement of profit or loss and other comprehensive income for the period. Gains and losses (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) incurred on the disposal of investment properties are also recognised through profit or loss in the consolidated statement of profit or loss and other comprehensive income.

The fair value of investment properties is determined by qualified independent valuers at each reporting date, in accordance with the Royal Institution of Chartered Surveyors Valuation Standards (RICS) and IFRS 13. Each independent valuer holds a recognised relevant professional qualification and has recent experience in the locations and segments of the investment properties valued. At each reporting date, management undertakes a review of its investment property valuations to assess the continuing validity of the underlying assumptions, such as future income streams and yields used in the independent valuation report, as well as property valuation movements when compared to the prior year valuation report and holds discussions with the independent valuer.

Investment Properties Under Development

Investment properties under development include those properties, or components thereof, that will undergo activities that will take a substantial period of time to prepare the properties for their intended use as income properties.

The cost of a development property that is an asset acquisition comprises the amount of cash, or the fair value of other consideration, paid to acquire the property, including transaction costs. Subsequent to the acquisition, the cost of a development property includes costs that are directly attributable to these assets, including development costs, and borrowing costs. These costs are capitalised when the activities necessary to prepare an asset for development or redevelopment begin and continue until the date that construction is substantially complete, and all necessary occupancy and related permits have been received, whether or not the space is leased. Borrowing costs are calculated using the Company's weighted average cost of borrowing.

Properties under development are valued at fair value by qualified independent valuers at each reporting date with fair value adjustments recognised in profit or loss in the consolidated statement of profit or loss and other comprehensive income. In the case of investment property under development, the valuation approach applied is the "residual method", with a deduction for the costs necessary to complete the development together with an allowance for the remaining risk.

Development Land

Development land is also stated at fair value by qualified independent valuers at each reporting date with fair value adjustments recognised in profit or loss in the consolidated statement of profit or loss and other comprehensive income. In the case of development land, the valuation approach applied is the comparable sales approach, which considers recent sales activity for similar land parcels in the same or similar markets. Land values are estimated using either a per acre or per buildable square foot basis based on highest and best use. Such values are applied to the Group's properties after adjusting for factors specific to the site, including its location, highest and best use, zoning, servicing and configuration.

Key Estimations of Inherent Uncertainty in Investment Property Valuations

The fair values derived are based on anticipated market values for the properties, being the estimated amount that would be received from a sale of the assets in an orderly transaction between market participants. The valuation of the Group's investment property portfolio is inherently subjective as it requires, among other factors, assumptions to be made regarding the ability of existing residents to meet their rental obligations over the entire life of their leases, the estimation of the expected rental income in the future, an assessment of a property's ability to remain an attractive technical configuration to existing and prospective residents in a changing market and a judgement to be reached on the attractiveness of a building, its location and the surrounding environment. While these and other similar matters are market- standard considerations in determining the fair value of a property in accordance with the RICS methodology, they are all subjective assessments of future outturns and macroeconomic factors, which are outside of the Group's control or influence and therefore may prove to be inaccurate long-term forecasts. As a result of all these factors, the ultimate valuation the Group places on its investment properties is subject to some uncertainty, and may not turn out to be accurate, particularly in times of macroeconomic volatility. The RICS property valuation methodology is considered by the Board to be the valuation technique most suited to the measurement of the fair value of property investments. It is also the primary measurement of fair value that all major and reputable property market participants use when valuing a property investment. See note 5 for a detailed discussion of the significant assumptions, estimates and valuation methods used.

d) Property Asset Acquisition

At the time of acquisition of a property or a portfolio of investment properties, the Group evaluates whether the acquisition is a business combination or asset acquisition. The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.

The Group has an option to apply a 'concentration test' that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The optional concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.

When an acquisition does not represent a business as defined under IFRS 3, the Group classifies these properties, or portfolio of properties, as an asset acquisition. Identifiable assets acquired, and liabilities assumed in an asset acquisition are measured initially at their fair values at the acquisition date. Acquisition-related transaction costs are capitalised to the property.

e) Property, Plant and Equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation, and mainly comprise of head office, head office fixtures and fittings and information technology hardware. These items are depreciated on a straight-line basis over their estimated useful lives: The right of use building has a useful life of 20 years and the fixtures and fittings have a useful life ranging from three to five years.

f) IFRS 9, Financial Instruments ("IFRS 9")

Financial Assets and Financial Liabilities

Under IFRS 9, financial assets and financial liabilities are initially recognised at fair value and are subsequently accounted for based on their classification as described below. Their classification depends on the purpose for which the financial instruments were acquired or issued, their characteristics and I-RES' designation of such instruments. The standards require that all financial assets and financial liabilities be classified as fair value through profit or loss ("FVTPL"), amortised cost or fair value through other comprehensive income ("FVOCI").

Derecognition of financial assets and financial liabilities

The Group derecognises a financial asset when:

· the contractual rights to the cash flows from the financial asset expire; or

· it transfers the rights to receive the contractual cash flows in a transaction in which either:

o substantially all of the risks and rewards of ownership of the financial asset are transferred; or

o the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognised in its consolidated statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognised.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the consolidated statement of financial position when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

Classification of Financial Instruments

The following summarises the classification and measurement I-RES has elected to apply to each of its significant categories of financial instruments:

Type	Classification	Measurement
Financial assets
Cash and cash equivalents	Held to Collect	Amortised cost
Other receivables	Held to Collect	Amortised cost
Deposits on acquisition	Held to Collect	Amortised cost
Derivative financial instruments	FVTPL	Fair value through profit or loss

Financial liabilities
Bank indebtedness	Other financial liabilities	Amortised cost
Private placement notes	Other financial liabilities	Amortised cost
Accounts payable and accrued liabilities	Other financial liabilities	Amortised cost
Security deposits	Other financial liabilities	Amortised cost
Derivative financial instruments	FVTOCI	Fair value through other comprehensive income
Derivative financial instruments	FVTPL	Fair value through profit or loss

Cash and Cash Equivalents

Cash and cash equivalents include cash and short-term investments with an original maturity of three months or less. Interest earned or accrued on these financial assets is included in other income.

Loans and Other Receivables

Such receivables arise when I-RES provides services to a third party, such as a resident, and are included in current assets, except for those with maturities more than 12 months after the consolidated statement of financial position date, which are classified as non-current assets. Loans and other receivables are included in other assets on the consolidated statement of financial position and are accounted for at amortised cost.

Other Liabilities

Such financial liabilities are recorded at amortised cost and include all liabilities other than derivatives. Derivatives are designated to be accounted for at fair value through profit and loss and at fair value through other comprehensive income.

FVTPL

Financial instruments in this category are recognised initially and subsequently at fair value. Gains and losses arising from changes in fair value are presented within gain on derivative financial instruments in the consolidated statement of income and comprehensive income in the period in which they arise. Financial assets and liabilities at FVTPL are classified as current, except for the portion expected to be realised or paid more than 12 months after the consolidated statement of financial position date, which is classified as non-current. Derivatives are categorised as FVTPL unless designated as hedges.

Derivative financial instruments and hedge accounting

The Group utilises derivative financial instruments to hedge foreign exchange risk and interest rate risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Derivatives are initially measured at fair value except where cash flow hedging is applied. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognised through profit or loss.

The Group designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in foreign exchange rates and interest rates.

At inception of designated hedging relationships, the Group documents the risk management objective and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.

Cash flow hedges

When a derivative is designated as a cash flow hedging instrument, hedge accounting is used in line with IFRS 9 . The effective portion of changes in the fair value of the derivative is recognised in OCI and accumulated in the hedging reserve. The effective portion of changes in the fair value of the derivative that is recognised in OCI is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss.

For all hedged forecast transactions, the amount accumulated in the hedging reserve is reclassified to financing costs in the same period or periods during which the hedged expected future cash flows affect profit or loss.

If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then hedge accounting is discontinued prospectively.

If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedging reserve are immediately reclassified to profit or loss.

g) IFRS 16, Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.

As a Lessee

When the Group acts as a lessee, at commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

Lease payments included in the measurement of the lease liability comprise the following:

> fixed payments, including in-substance fixed payments;

> variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

> amounts expected to be payable under a residual value guarantee; and

> the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group's estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded through profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Group presents right-of-use assets that do not meet the definition of investment property in 'property, plant and equipment' and lease liabilities in 'Lease liability' in the statement of financial position.

As a Lessor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards incidental to ownership of the underlying assets. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of the assessment, the Group considers certain indicators such as whether the lease if for the major part of the economic life of the asset, the present value of lease payments and any option included in the lease. The Group has determined that all its leases are operating leases.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

On modification of a contract that contains a lease component and a non-lease component, I-RES allocates the consideration in the contract to each of the components on the basis of their relative stand-alone prices.

Tenant Inducements

Incentives such as cash, rent-free periods and move-in allowances may be provided to lessees who enter into a lease. The incentives are written off on a straight-line basis over the term of the lease as a reduction of rental revenue.

Early Termination of Leases

When the Group receives rent loss payments from a tenant for the early termination of a lease, it is reflected in the accounting period in which the rent loss payment occurred.

Expected Credit Loss

The Group recognises a loss allowance for expected credit losses on trade receivables and other financial assets. The amount of ECL is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. Loss allowances for trade receivables (including lease receivables) are always measured at an amount equal to lifetime ECLs. Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group's historical experience and informed credit assessment, that includes forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

For individual residential customers, the Group has a policy of writing off the gross carrying amount when the financial asset is 30 days past due based on historical experience of recoveries of similar assets. For individual commercial customers, the Group has a policy of writing off the gross carrying amount when the financial asset is 60 days past due based on historical experience of recoveries of similar assets.

h) IFRS 15, Revenue from Contracts with Customers ("IFRS 15")

I-RES retains substantially all of the risks and benefits of ownership of its investment properties and therefore accounts for leases with its tenants as operating leases. Rent represents lease revenue earned from the conveyance of the right to use the property, including access to common areas, to a lessee for an agreed period of time. The contract also contains a performance obligation that requires I-RES to maintain the common areas to an agreed standard. This right of use and performance obligation is governed by a single rental contract with the tenant. In accordance with the adoption of IFRS 16, Leases, I-RES has evaluated the lease and non-lease components of its rental revenue and has determined that common area maintenance services constitute a single non-lease element, which is accounted for as one performance obligation under IFRS 15 and is recognised separately to Rental Income as Revenue under IFRS 15 Revenue from Contracts with Customers.

Rental revenue includes amounts earned from tenants under the rental contract which are allocated to the lease and non-lease components based on relative stand-alone selling prices. The stand-alone selling prices of the lease components are determined using an adjusted market assessment approach and the stand- alone selling prices of the service components are determined using the input method based on the expected costs plus an estimated market-based margin for similar services.

Rental income from the operating lease component is recognised on a straight-line basis over the lease term in accordance with IFRS 16 Leases. When I-RES provides incentives to its tenants, the cost of such incentives is recognised over the lease term, on a straight-line basis, as a reduction of revenue.

Revenue from maintenance services represents the service component of the REIT's rental contracts and is accounted for in accordance with IFRS 15, Revenue from Contracts with Customers ("IFRS15"). These services consist primarily of the recovery of utility, property and other common area maintenance and amenity costs where I-RES has determined it is acting as a principal.

These services constitute a single non-lease component, which is accounted for as one performance obligation under IFRS 15 as the individual activities that comprise these services are not distinct in the context of the contract. The individual activities undertaken to meet the performance obligation may vary from time to time but cumulatively the activities undertaken to meet the performance obligation are relatively consistent over time. The tenant simultaneously receives and consumes the benefits provided under the performance obligation as I-RES performs and consequently revenue is recognised over time, typically on a monthly basis, as the services are provided.

i) Operating Segments

The Group operates and is managed as one business segment, namely property investment, with all investment properties located in Ireland. The operating segment is reported in a manner consistent with the internal reporting provided to the chief operating decision-maker, which has been identified as the I-RES Board.

j) Statement of Cash Flows

Cash and cash equivalents consist of cash on hand and balances with banks. Investing and financing activities that do not require the use of cash or cash equivalents are excluded from the consolidated statement of cash flows and are disclosed separately in the notes to the consolidated financial statements. Interest expense is classified as financing activities.

k) Income Taxes

Current Tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.

Current Tax Assets and Liabilities are Offset only if Certain Criteria are Met.

I-RES elected for REIT status on 31 March 2014. As a result, from that date I-RES does not pay Irish corporation tax on the profits and gains from its qualifying rental business in Ireland, provided it meets certain conditions.

Going forward, corporation tax is still payable in the normal way in respect of income and gains from any residual business (generally including any property trading business) not included in the Property Rental Business. I-RES would also be liable to pay other taxes such as VAT, stamp duty, land tax, local property tax and payroll taxes in the normal way.

Deferred Tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

l) Equity and Share Issue Costs

The equity of I-RES consists of ordinary shares issued. Shares issued are recorded at the date of issuance. Direct issue costs in respect of the issue of shares are accounted for as a deduction from retained earnings.

m) Net Asset Value ("NAV")

The NAV is calculated as the value of the Group's assets less the value of its liabilities, measured in accordance with IFRS as adopted in the EU, and in particular will include the Group's property assets at their most recent independently assessed market values.

n) Share-based Payments

I-RES has determined that the options and restricted share units issued to senior executives qualify as "equity-settled share-based payment transactions" as per IFRS 2. In addition, any options issued to the directors have also been based on equity-settled share-based payment transactions. The fair value of the options measured on the grant date will be expensed over the graded vesting term with a corresponding increase in equity. The fair value for all options granted is measured using the Black-Scholes model.

The grant-date fair value of restricted share units issued to senior executives is generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The fair value for all restricted share units granted is measured using a Monte Carlo simulation. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

o) Property Taxes

Property taxes are paid annually and recognised as an expense evenly throughout the year.

p) Security Deposits

Security deposits are amounts received from tenants at the beginning of a tenancy. When a tenant is no longer in possession of the property, the Group will assess whether there were damages to the property above normal wear and tear for which deductions may be made to their deposit. Once the inspections and repairs are calculated, the remaining security deposit is returned to the tenant.

q) Pension

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which a company pays fixed contributions into a separate entity. Once the contributions have been paid, the company has no further obligations. The contributions are recognised as an expense when they are due. The amounts that are not paid are shown as accruals in the consolidated statement of financial position. The assets of the plan are held separately from those of the Company in an independently administered fund.

r) Impact Expected From New or Amended Standards

The following standards and amendments are not expected to have a significant impact on reported results or disclosures of the Group, and, were not effective at the financial year end 31 December 2020 and have not been applied in preparing these consolidated financial statements. The Group will apply the new standards from the effective date. The potential impact of these standards on the Group is under review:

Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16), IASB effective date 1 January 2021.

The amendments address issues that might affect financial reporting as a result of the reform of an interest rate benchmark, including the effects of changes to contractual cash flows or hedging relationships arising from the replacement of an interest rate benchmark with an alternative benchmark rate. The amendments provide practical relief from certain requirements in IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 relating to:

· changes in the basis for determining contractual cash flows of financial assets, financial liabilities and lease liabilities; and

· hedge accounting.

Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37), IASB effective date 1 January 2022.

The amendments clarify that the 'costs of fulfilling a contract' comprise both: the incremental costs - e.g. direct labour and materials; and an allocation of other direct costs - e.g. an allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract.

Annual Improvements to IFRS Standards 2018-2020, IASB effective date 1 January 2022.

IFRS 1 First-time adoption of International Financial Reporting Standards - the amendment simplifies the application of IFRS 1 for a subsidiary that becomes a first-time adopter of IFRS Standards later than its parent.

IFRS 9 Financial Instruments - This amendment clarifies that for the purpose of performing the ''10 per cent test' for derecognition of financial liabilities - in determining those fees paid net of fees received, a borrower includes only fees paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other's behalf.

IFRS 16 Leases - The amendment removes the illustration of payments from the lessor relating to leasehold improvements. As currently drafted, this example is not clear as to why such payments are not a lease incentive.

Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16), IASB effective date 1 January 2022.

Under the amendments, proceeds from selling items before the related item of Property Plant and Equipment is available for use should be recognised in profit or loss, together with the costs of producing those items. IAS 2 Inventories should be applied in identifying and measuring these production costs.

Classification of Liabilities as Current or Non-current (Amendments to IAS 1), IASB effective date 1 January 2023.

Under existing IAS 1 requirements, companies classify a liability as current when they do not have an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period. As part of its amendments, the Board has removed the requirement for a right to be unconditional and instead, now requires that a right to defer settlement must have substance and exist at the end of the reporting period.

3. Critical Accounting Estimates, Assumptions and Judgements

The preparation of the consolidated financial statements in accordance with IFRS requires the use of estimates, assumptions and judgements that in some cases relate to matters that are inherently uncertain, and which affect the amounts reported in the consolidated financial statements and accompanying notes. Areas of such estimation include, but are not limited to, valuation of investment properties, and valuation of financial instruments. Changes to estimates and assumptions may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates under different assumptions and conditions.

The valuation estimate of investment properties is deemed to be more significant. See notes 2(c) and 5 for a detailed discussion of valuation methods and the significant assumptions and estimates used.

4. Recent Investment Property Acquisitions, Developments and Disposals

For the year 1 January 2020 to 31 December 2020

Investment Property Acquisitions

Property

Acquisition Date

Apartment Count

Region

Total Acquisition

Costs

€'000

Waterside

27 March 2020

Malahide

19,330

Completed Development

Property	Development Completion date	Apartment Count	Region	Total Costs Spent in 2020 €'000	Total Development Cost spent to date €'000
Tallaght Cross West	7 February 2020	18	West Dublin	259	5,518
Piper's Court (Hansfield Phase II)	31 July 2020	95	West Dublin	556	31,000
Priorsgate	20 December 2020	5	West Dublin	1,816	1,816
		118		2,631	38,334

Properties Under Development

Property

Development Contract Date

Apartment Count(4)

Region

Total Costs Spent

in 2020

€'000

Total

Development

Cost spent

to date

€'000

Bakers Yard (1)

10 January 2020

City Centre

5,324

(1) On 10 January 2020, I-RES started developing 61 residential units at Bakers Yard. The cost to complete is estimated at circa €13.8 million.

Disposals

Name	Apartment Count	Other Land and Property	Region	Net proceeds from Disposition €'000
The Laurels	19	1 Commercial Unit, 190 Sq M	West Dublin	4,125
Beacon South Quarter(1)	12		South Dublin	4,761
Russell Court	29		North Dublin	7,197
Belville and the Mills	21		West Dublin	7,241
St Edmunds	18	1 Development site, 0.16 Ha	West Dublin	6,628
The Oaks	14		West Dublin	4,328
Spencer House	12		City Centre	5,382
East Arran Street	12		City Centre	4,322
Coopers Court	14	2 Commercial Units, 126 Sq M	City Centre	3,911
	151	-		47,895

(1) Of the 225 residential units at BSQ, only 12 were disposed in 2020.

For the year 1 January 2019 to 31 December 2019

Investment Property Acquisitions

Property	Acquisition Date	Apartment Count	Region	Total Acquisition Costs €'000
The Coast	2019	52	Dublin, Ireland	14,316
Taylor Hill	2019	78	Dublin, Ireland	22,830
Semple Woods	2019	40	Dublin, Ireland	15,812
City Square	29 April 2019	1	Dublin, Ireland	428
Marathon Portfolio	1 August 2019	815	Ireland	291,298
		986		344,684

Properties Under Development

Developments Property	Development Contract Date	Apartment Count	Region	Total Costs Spent in 2019 €'000	Total Development Cost spent to date €'000
Hansfield Phase II Development	16 November 2018	95	Dublin, Ireland	19,902	30,444
Coldcut Park	2 July 2019	1	Dublin, Ireland	184	184
Tallaght Cross West	4 April 2019	18	Dublin, Ireland	5,259	5,259
		114		25,345	35,887

5. Investment Properties

Valuation Basis

Investment properties are carried at fair value, which is the amount at which the individual properties could be sold in an orderly transaction between market participants at the measurement date, considering the highest and best use of the asset, with any gain or loss arising from a change in fair value recognised through profit or loss in the consolidated statement of profit or loss and other comprehensive income for the year.

The majority of the fair values of all of the Group's investment properties as at 31 December 2020 are determined by Coldwell-Banker Richard Ellis (CBRE) and the remaining by Savills, the Company's external independent valuers. The valuers employ qualified valuation professionals who have recent experience in the location and category of the respective property. Valuations are prepared on a bi-annual basis at the interim reporting date and the annual reporting date.

The information provided to the valuers, and the assumptions and valuation methodologies and models used by the valuers, are reviewed by management. The valuers meet with the Audit Committee and discusses the valuation results as at 31 December and 30 June directly. The Board determines the Group's valuation policies and procedures for property valuations. The Board decides which independent valuers to appoint for the external valuation of the Group's properties. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.

Retail Properties

The outbreak of Covid-19, declared by the World Health Organisation as a "Global Pandemic" on the 11 March 2020, has impacted global financial markets. Travel restrictions have been implemented by many countries. Market activity is being impacted in many sectors. In some cases, "lockdowns" have been applied - in varying degrees - to reflect further 'waves' of Covid-19. While these may imply a new stage of the crisis, they are not unprecedented in the same way as the initial impact. As at the valuation date, the valuers have stated that it can attach less weight to previous market evidence for comparison purposes for the retail portion of the Group's portfolio, to inform opinions of value. The valuations are therefore reported as being subject to 'material valuation uncertainty' as set out in VPS 3 and VPGA 10 of the RICS Valuation - Global Standards. For the avoidance of doubt, the inclusion of the 'material valuation uncertainty' declaration above does not mean that the Valuation cannot be relied upon. Rather, the declaration has been included to ensure transparency of the fact that - in the current extraordinary circumstances - less certainty can be attached to the Valuation than would otherwise be the case. The material uncertainty clause is to serve as a precaution and does not invalidate the Valuation. This uncertainty clause was removed for residential properties as of 31 December 2020 however continues to be apply for retail properties.

Investment Property Producing Income

For investment property, the income approach/yield methodology involves applying market-derived yields to current and projected future income streams. These yields and future income streams are derived from comparable property transactions and are considered to be the key inputs in the valuation. Other factors that are taken into account include the tenure of the lease, tenancy details, and planning, building and environmental factors that might affect the property.

Investment Property Under Development

In the case of investment property under development, the approach applied is the "residual method" of valuation, which is the valuation method as described above with a deduction for the costs necessary to complete the development, together with an allowance for the remaining risk.

During 2020, the Company incurred development costs of €8.0 million (31 December 2019: €25.3 million) relating to the properties under development. At the reporting date, the only property under development is Bakers Yard.

Borrowing costs of €92.0 thousand (€660.1 thousand as at 31 December 2019) are included in capitalised development expenditures. The weighted average interest rate used to capitalise the borrowing costs was 1.77% (31 December 2019: 1.86%).

Development Land

In the case of development land, the approach applied is the comparable sales approach, which considers recent sales activity for similar land parcels in the same or similar markets. Land values are estimated using either a per acre or per buildable square foot basis based on highest and best use. Such values are applied to the Group's properties after adjusting for factors specific to the site, including its location, zoning, servicing and configuration.

Information about Fair Value Measurements using Unobservable Inputs (Level 3)

At 31 December 2020, the Group considers that all of its investment properties fall within Level 3 fair value as defined by IFRS 13. As outlined in IFRS 13, a Level 3 fair value recognises that the significant inputs and considerations made in determining the fair value of property investments cannot be derived from publicly available data, as the valuation methodology in respect of a property also has to rely on a number of unobservable inputs including technical reports, legal data, building costs, rental analysis (including rent moratorium), professional opinion on profile, lot size, layout and presentation of accommodation. In addition, the valuers utilise proprietary databases maintained in respect of properties similar to the assets being valued.

The Irish government implemented a temporary rent memorandum as a result of Covid-19 prohibiting increases in rents on renewals from April 2020 to September 2020. Since September 2020, the Irish government prohibits any increase in rents on renewals on tenants receiving support from the government due to impact from Covid-19. I-RES has not served any renewals with rental changes since April 2020, after the declaration of the pandemic in March 2020.

The Group tests the reasonableness of all significant unobservable inputs, including yields and stabilised net rental income ("Stabilised NRI") used in the valuation and reviews the results with the independent valuers for all independent valuations. The Stabilised NRI represents cash flows from property revenue less property operating expenses, adjusted for market-based assumptions such as market rents, short term and long term vacancy rates and bad debts, management fees, repairs and maintenance. These cashflows are estimates for current and projected future income streams.

Sensitivity Analysis

Stabilised NRI and "Equivalent Yields" are key inputs in the valuation model used.

Equivalent Yield is the rate of return on a property investment based on current and projected future income streams that such property investment will generate. This is derived by the external valuers and is used to set the term and reversionary yields.

For example, completed properties are valued mainly using a term and reversion model. For the existing rental contract or term, estimated Stabilised NRI is based on the expected rents from residents over the period to the next lease break option or expiry. After this period, the reversion, estimated Stabilised NRI is based on expectations from current market conditions. Thus, a decrease in the estimated Stabilised NRI will decrease the fair value, and an increase in the estimated Stabilised NRI will increase the fair value.

The Equivalent Yields magnify the effect of a change in Stabilised NRI, with a lower yield resulting in a greater effect on the fair value of investment properties than a higher Equivalent Yield.

For investment properties producing income and investment properties under development, an increase of 1% in the Equivalent Yield would have the impact of a €239.2 million reduction in fair value while a decrease of 1% in the Equivalent Yield would result in a fair value increase of €373.4 million. An increase between 1% - 4% in Stabilised NRI would result in a fair value increase from €13.5 million to €53.9 million respectively in fair value, while a decrease between 1% - 4% in Stabilised NRI would have the impact ranging from €13.5 million to

€53.9 million reduction respectively. I-RES believes that this range of change in Stabilised NRI is a reasonable estimate in the next twelve months based on expected changes in net rental income.

The direct operating expenses recognised in the consolidated statement of profit or loss and other comprehensive income for the Group is €15.0 million for the year ended 31 December 2020 (31 December 2019: €11.6 million), arising from investment property that generated rental income during the period. The direct operating expenses are comprised of the following significant categories: property taxes, utilities, repairs and maintenance, wages, insurance, service charges and property management fees.

The direct operating expenses recognised in the consolidated statement of profit or loss and other comprehensive income arising from investment property that did not generate rental income for the year ended 31 December 2020 and 31 December 2019 was not material.

An investment property is comprised of various components, including undeveloped land and vacant residential and commercial units; no direct operating costs were specifically allocated to the components noted above.

Quantitative Information

A summary of the Equivalent Yields and ranges along with the fair value of the total portfolio of the Group as at 31 December 2020 is presented below:

As at 31 December 2020

Type of Interest	Fair Value €'000	WA NRI⁽¹⁾ €'000	Rate Type⁽²⁾	Max.	Min.	Weighted Average
Investment properties	1,346,683	2,892	Equivalent Yield	5.62 %	3.75 %	4.66 %
Properties under development	8,901	1,004	Equivalent Yield	4.25 %	4.25 %	4.25 %
			Average Development Cost (per sq. ft.)	€361.80	€361.80	€361.80
Development land⁽³⁾	24,770	n/a	Market Comparable (per sq. ft.)	€140.9	€27.5	€134.6
Total investment properties	1,380,354

(1) WA NRI is the NRI of each property weighted by its fair value over the total fair value of the investment properties ("WA NRI"). The NRI is calculated by multiplying the Equivalent Yield for each property by its respective fair value.

(2) The Equivalent Yield disclosed above is provided by the external valuers.

(3) Development land is fair-valued based on the value of the undeveloped site per square foot.

As at 31 December 2019

Type of Interest	Fair Value €'000	WA NRI⁽¹⁾ €'000	Rate Type⁽²⁾	Max.		Min.		Weighted Average
Investment properties	1,293,241	2,751	Equivalent Yield		6.19 %		4.16 %	4.90 %
Properties under development	36,000	1,259	Equivalent Yield		5.93 %		4.75 %	4.94 %
			Average Development Cost (per sq. ft.)		€379.0		€319.2	€370.2
Development land⁽³⁾	29,960	n/a	Market Comparable (per sq. ft.)		€158.5		€35.6	€134.1
Total investment properties	1,359,201

(2) The Equivalent Yield disclosed above is provided by the external valuers.

(3) Development land is fair-valued based on the value of the undeveloped site per square foot.

The following table summarises the changes in the investment properties portfolio during the periods:

Reconciliation of Carrying Amounts of Investment Properties

For the year ended	31 December 2020
	Income Properties	Properties Under Development	Development Land	Total
	€'000	€'000	€'000	€'000
Balance at the beginning of the year	1,293,241	36,000	29,960	1,359,201
Acquisitions	19,330	-	-	19,330
Development expenditures	7,865	7,955	282	16,102
Reclassification⁽¹⁾	38,631	(35,631)	(3,000)	-
Property capital investments	9,986	-	-	9,986
Capitalised leasing costs⁽²⁾	(44)	-	-	(44)
Direct leasing costs⁽³⁾	150	-	-	150
Disposition⁽⁴⁾	(43,463)	-	-	(43,463)
Unrealised fair value movements	20,987	577	(2,472)	19,092
Balance at the end of the year	1,346,683	8,901	24,770	1,380,354

For the year ended	31 December 2019
	Income Properties	Properties Under Development	Development Land	Total
	€'000	€'000	€'000	€'000
Balance at the beginning of the year	882,416	10,500	28,400	921,316
Acquisitions	344,684	-	-	344,684
Development expenditures	-	25,345	3,613	28,958
Reclassification⁽⁵⁾	184	266	(450)	-
Property capital investments	7,983	-	-	7,983
Capitalised leasing costs⁽²⁾	(21)	-	-	(21)
Direct leasing costs⁽³⁾	47	-	-	47
Unrealised fair value movements	57,948	(111)	(1,603)	56,234
Balance at the end of the year	1,293,241	36,000	29,960	1,359,201

(1) Reclassified Bakers Yard from development land to properties under development. Developments at Tallaght Cross West, Piper's Court and Priorsgate were reclassified from properties under development to income properties upon their completion in 2020.

(2) Straight-line rent adjustment.

(3) Includes cash outlays for new tenants.

(4) 151 residential units were disposed of for net proceeds of €47.9 million resulting in a gain of €4.4 million.

(5) Reclassified Tallaght Cross West from development land to properties under development and reclassified Coldcut Park from properties under development to income properties in 2019.

Most of the residential leases are for one year or less.

The carrying value of the Group investment properties of €1,380.4 million for the investment properties at 31 December 2020 (€1,359.2 million at 31 December 2019) was based on an external valuation carried out as at that date. The valuations were prepared in accordance with the RICS Valuation - Global Standards, 2020 (Red Book) and IFRS 13.

6. Leases

Leases as Lessee (IFRS 16)

On 9 December 2019, the Group entered into an agreement to lease office space at South Dock House. The lease is for a period of 20 years, with options for the Group to terminate the lease on the 10th and 15th anniversary of the lease. Lease payments are renegotiated every five years to reflect market rentals.

A portion of the office space is sub-let to a tenant. The sub-lease was extended in 2020 to 2022, and is classified as an operating lease.

The Group has assessed at the lease commencement date whether it is reasonably certain to exercise the lease termination option and has determined that the lease term is 20 years. As well, the Group has used an incremental borrowing rate of 2.48% to determine the lease liability.

Information about leases for which the Group is a lessee is presented below.

Right-of-use Assets

For the year ended 31 December 2020	Land and Buildings (€'000)
Balance at the beginning of the year	10,083
Additions to right-of-use assets	-
Depreciation charge for the year	(507)
Balance at the end of the year (Note 7)	9,576

For the year ended 31 December 2019	Land and Buildings (€'000)
Balance at the beginning of the year	-
Additions to right-of-use assets	10,114
Depreciation charge for the year	(31)
Balance at the end of the year (Note 7)	10,083

Amounts Recognised in Profit or Loss

For the year ended 31 December 2020, I-RES recognized interest on lease liabilities of circa €241,000. (31 December 2019: € 4,000)

Amounts Recognised in Statement of Cash Flow

For the year ended 31 December 2020, I-RES's total cash outflow for leases was circa €386,000. (31 December 2019: €247,000)

Refer to note 20 for movements in the lease liability.

Lease as Lessor

The Group leases out its investment property consisting of its owned residential and commercial properties as well as a portion of the leased property. All leases are classified as operating leases from a lessor perspective. See note 14 for an analysis of the Group's rental income.

7. Property, Plant and Equipment

	Land and Buildings	Furniture and Fixtures	Total
	(Note 6)
	€'000	€'000	€'000
At cost
As at 1 January 2020	10,114	59	10,173
Additions	-	160	160
As at 31 December 2020	10,114	219	10,333
Accumulated amortisation
As at 1 January 2020	(31)	(54)	(85)
Additions	(507)	(19)	(526)
As at 31 December 2020	(538)	(73)	(611)
As at 31 December 2020	9,576	146	9,722

	Land and Buildings	Furniture and Fixtures	Total
	€'000	€'000	€'000
At cost
As at 1 January 2019	-	59	59
Additions	10,114	-	10,114
As at 31 December 2019	10,114	59	10,173
Accumulated amortisation
As at 1 January 2019	-	(53)	(53)
Additions	(31)	(1)	(32)
As at 31 December 2019	(31)	(54)	(85)
As at 31 December 2019	10,083	5	10,088

8. Other Assets

As at	31 December 2020	31 December 2019
	€'000	€'000
Other Current Assets
Prepayments⁽¹⁾	2,651	2,301
Deposits on acquisitions⁽²⁾	10,529	6,945
Other receivables⁽³⁾	674	577
Trade receivables	1,648	1,963
Total	15,502	11,786

(1) Includes specific costs relating to preparing planning applications of development lands and costs associated with ongoing transactions.

(2) Includes deposits paid for the Phoenix Park acquisition which closed on 28 January 2021.

(3) Relates to levies received in respect of services to be incurred.

9. Accounts Payable and Accrued Liabilities

As at	31 December 2020	31 December 2019
	€'000	€'000
Accounts Payable and Accrued Liabilities⁽¹⁾
Rent - early payments	3,358	2,662
Trade creditors	645	446
Accruals⁽²⁾	7,494	6,914
Value Added Tax	91	194
Total	11,588	10,216

(1) The carrying value of all accounts payable and accrued liabilities approximates their fair value.

(2) Includes property related accruals, development accruals, property management fees and asset management fees accruals.

10. Credit Facility

As at	31 December 2020	31 December 2019
	€'000	€'000
Bank Indebtedness
Loan drawn down	354,020	555,020
Deferred loan costs	(3,971)	(5,169)
Total	350,049	549,851

On 18 April 2019, I-RES entered into a new accordion credit facility of up to €450 million with a syndicate of five banks, which can be extended to €600 million, (subject to certain terms and conditions) (the "New Revolving Credit Facility") replacing the existing €350 million revolving and accordion credit facility which was due to mature January 2021 (the "Previous Revolving Credit Facility").

The New Revolving Credit Facility has a five year term, which can be extended to seven years (subject to certain conditions) and is secured by a floating charge over assets of the Company and IRES Residential Properties Limited, its subsidiary, and a fixed charge over the shares held by the Company in IRES Residential Properties Limited on a pari passu basis. It has a reduced margin compared to the Previous Revolving Credit Facility. This facility is being provided by Barclays Bank Ireland PLC, Ulster Bank Ireland DAC, The Governor and Company of the Bank of Ireland, Allied Irish Banks, P.L.C. and HSBC Bank PLC.

On 12 June 2019, the Company exercised its option under the New Revolving Credit Facility to extend its committed facilities from €450 million to €600 million and amended the New Revolving Credit Facility to include a new uncommitted accordion facility of €50 million. The New Revolving Credit Facility (as amended and restated on 12 June 2019) the ("RCF") matures on 18 April 2024. The interest on the RCF is set at the annual rate of 1.75%, plus the one-month or three-month EURIBOR rate (at the option of I-RES). There are commitment fees charged on the undrawn loan amount of the RCF.

On 28 February 2017, I-RES entered into interest rate swap agreements aggregating to a notional amount of €160 million. The agreements had an effective date of 23 March 2017 and a maturity date of 14 January 2021. On 15 September 2017, I-RES entered into a new interest rate swap agreement totalling a notional amount of €44.8 million. The new agreement has an effective date of 15 September 2017 and a maturity date of 14 January 2021.

The interest rate swap agreements effectively convert the hedged portion of the RCF (€204.8 million) from a variable rate to a fixed rate facility up to 14 January 2021 (see note 16 for further details).

I-RES has complied with all its debt financial covenants to which it was subject during the year.

11. Private Placement Debt

On 11 March 2020, I-RES successfully closed the issue of €130 million notes and IRES Residential Properties Limited, its subsidiary closed the issue of USD $75 million notes on a private placement basis (collectively, the "Notes"). The Notes have a weighted average fixed interest rate of 1.92% inclusive of a USD Euro swap. Interest is paid semi-annually on 10 March and 10 September.

The Notes have been placed in four tranches:

As at 31 December 2020	Maturity	Contractual interest rate	Derivative Rates	€'000
EUR Series A Senior Secured Notes	10 March 2030	1.83 %	n/a	90,000
EUR Series B Senior Secured Notes	10 March 2032	1.98 %	n/a	40,000
USD Series A Senior Secured Notes	10 March 2027	3.44 %	1.87 %	40,923⁽¹⁾
USD Series B Senior Secured Notes	10 March 2030	3.63 %	2.25 %	20,462⁽²⁾
				191,385
Deferred financing costs, net				(2,383)
Total				189,002

(1) The principal amount of the USD Series A Senior Secured Notes is USD $50 million.

(2) The principal amount of the USD Series B Senior Secured Notes is USD $25 million.

The Notes are secured by a floating charge over the assets of the Group and a fixed charge over the shares held by the Company in IRES Residential Properties Limited on a pari passu basis.

12. Share-based Compensation

a) Options

Options are issuable pursuant to I-RES' share-based compensation plan, namely, the long-term incentive plan ("LTIP").

On 18 June 2019, 1,302,461 options were granted to the Chief Executive Officer. The Chief Executive Officer received options, calculated as 3% of the new Ordinary Shares issued, at an exercise price of €1.71 per share, in accordance with her employment agreement.

On 10 July 2019, an additional 1,294,038 options were granted to the Chief Executive Officer in connection with the placing of new ordinary shares.

All options have a maximum life of seven years less a day and it is graded vesting. The options will vest over three years from the date of grant on the basis of one third per completed year the recipient of the option completes in respect of the relevant service which has qualified him or her for an option grant. The LTIP limit cannot exceed 10% of I-RES' issued ordinary share capital (adjusted for share issuance and cancellation) during the 10-year period prior to that date. As at 31 December 2020, the maximum number of additional options, or Restricted Share Units ("RSU") issuable under the LTIP is 21,444,849 (31 December 2019: 21,542,450).

LTIP

For the year ended	WA exercise price	31 December 2020	31 December 2019
Share Options outstanding as at 1 January	1.24	12,496,499	10,875,000
Issued, cancelled or granted during the period:
Issued or granted	-	-	2,596,499
Exercised or settled	1.04	(3,400,000)⁽²⁾	(975,000)
Share Options outstanding as at 31 December(1)	1.32	9,096,499	12,496,499

(1) Of the Share Options outstanding above, 7,365,499 were exercisable at 31 December 2020 (31 December 2019: 9,233,333).

(2) See note 21 for more details.

The fair value of options has been determined as at the grant date using the Black-Scholes model. The assumptions utilised in the model to arrive at the estimated fair value for the outstanding grants at the respective periods are listed below.

LTIP

Issuance Date	10 July 2019	18 June 2019	16 November 2017	26 March 2015	16 April 2014
Number of shares	1,294,038	1,302,461	2,000,000	11,900,000	17,080,000
Share price on date of grant (€)	1.682	1.710	1.489	1.005	1.040
Award grant price (€)	1.682	1.710	1.489	1.005	1.040
Risk-free rate (%)	2.0	1.9	2.2	0.4	1.2
Distribution yield (%)	3.8	3.6	3.9	5.0	5.0
Expected years	7.0	7.0	7.0	7.0	7.0
Volatility (%)	16.6	16.6	19.6	20.2	20.3
Award option value (€)	0.16	0.17	0.18	0.07	0.08

The volatility of the 18 June 2019 and 10 July 2019 issue is based over the prior seven years. 16 November 2017 issue's volatility is based over the past four years, 26 March 2015 issue's volatility is based over the prior five years, and 16 April 2014 issue's volatility is based over the prior four years. The risk-free rate is based on Irish government bonds with a term consistent with the assumed option life.

b) Restricted Stock Unit Awards

On 27 March 2020, I-RES granted the Chief Executive Officer 437,601RSU awards. These awards have a vesting period of three years from 27 March 2020 and a holding period of two years from the vesting date. The share price as at 27 March 2020 was €1.23. The ultimate settlement of the RSU award is dependent on market and other conditions, which mutually exclusive of each other, as illustrated below:

Restricted Shares Conditions	Weighting	Performance condition type
Total Shareholder Return ("TSR")	50 %	Market
Earning Per Shares ("EPS") Return	50 %	Non-market

Performance level	Vesting level	EPS portion (50% weighting) Percentage growth in EPS: 2022 compared to base year of 2019⁽¹⁾	TSR portion (50% weighting) TSR relative to constituents of the FTSE EPRA/NAREIT Europe Developed Index
Below Threshold	0%	Below 3% p.a.	Below Median
Threshold	25%	3% p.a.	Median
Stretch (or above)	100%	6% p.a.	Upper Quartile (or above)
Between Threshold and Stretch	Pro-rata between 25% and 100%	Between 3% and 6% p.a.	Between Median and Upper Quartile

(1) EPS will be based on normalized EPRA earnings which is calculated by excluding from EPRA earnings the effects of certain non-recurring and exceptional items.

Non-market-based conditions: The fair value of the shares to be issued is determined using the grant date market price. The expected number of shares is calculated based on the expectations of the number of shares which may vest at the vesting date and amortised over the vesting period. At each reporting date, the calculation of the number of shares is revised according to current expectations or performance.

Market-based condition: The expected performance of I-RES shares over the vesting period is calculated using a Monte Carlo simulation. Inputs are share price volatility for I-RES and the average growth rate. These inputs are calculated with reference to relevant historical data and financial models. It should be recognised that the assumption of an average growth rate is not a prediction of the actual level of returns that will be achieved. The volatility assumption in the distribution gives a measure of the range of outcomes that may occur on either side of this average value. This is used to amortise the fair value of an expected cost over the vesting period. On vesting, any difference in amounts accrued versus actual is amended through reserves.

50% of the award is subjected to an EPS measure and 50% is subject to TSR measure relative to constituents of the FTSE EPRA/NAREIT Europe Developed Index. Results and inputs are summarised in the table below:

Fair value per award (TSR tranche) ( per share)		€0.57
Inputs	Source
Three year Risk free interest rate (%)	European Central Bank	(0.70%)
Three year Historical volatility		22.21 %
Fair value per award (EPS tranche) ( per share)		€1.05
Inputs	Source
Two year Risk free interest rate (%)	European Central Bank	(0.71%)
Two year Expected volatility		24.06 %

The expected volatility is based on historic market volatility prior to the issuance.

The total share-based compensation expense relating to options for year ended 31 December 2020 was €232,000 (31 December 2019: €236,000) and total share-based compensation expense relating to restricted stock unit award for the year ended 31 December 2020 was €90,000 (31 December 2019: € nil).

13. Shareholders' Equity

All equity shares outstanding are fully paid and are voting shares. Equity shares represent a shareholder's proportionate undivided beneficial interest in I-RES. No equity share has any preference or priority over another. No shareholder has or is deemed to have any right of ownership in any of the assets of I-RES. Each share confers the right to cast one vote at any meeting of shareholders and to participate pro rata in any distributions by I-RES and, in the event of termination of I-RES, in the net assets of I-RES remaining after satisfaction of all liabilities. Shares will be issued in registered form and are transferable.

The number of shares authorised is as follows:

For the year ended	31 December 2020	31 December 2019
Authorised Share Capital	1,000,000,000	1,000,000,000
Ordinary shares of €0.10 each

The number of issued and outstanding ordinary shares is as follows:

For the year ended	31 December 2020	31 December 2019
Ordinary shares outstanding, beginning of year	521,678,946	434,153,946
New shares issued⁽¹⁾	3,400,000	87,525,000
Ordinary shares outstanding, end of year	525,078,946	521,678,946

(1) In 2020, 3,400,000 shares were issued for options under the LTIP. On 12 June 2019 and 9 July 2019, I-RES successfully completed a placing of 86,550,000 new Ordinary Shares at a price of €1.55 per share raising gross proceeds of approximately €134.2 million (before commissions, fees and expenses). The additional 975,000 shares in 2019 were new shares issued for options issued under the LTIP.

14. Revenue from Investment Properties

I-RES generates revenue primarily from the rental income from investment properties. Rental income represents lease revenue earned from the conveyance of the right to use the property, including access to common areas, to a lessee for an agreed period of time. The rental contract also contains an undertaking that common areas and amenities will be maintained to a certain standard. This right of use of the property and maintenance performance obligation is governed by a single rental contract with the tenant. I-RES has evaluated the lease and non-lease components of its rental revenue and has determined that common area maintenance services constitute a single non-lease element, which is accounted for as one performance obligation under IFRS 15 and is recognised separately to Rental Income.

	31 December 2020 €'000	31 December 2019 €'000
Rental Income	66,055	53,946
Revenue from services	7,962	7,055
Car park income	727	1,096
Revenue from contracts with customers	8,689	8,151
Total Revenue	74,744	62,097

15. Financing Costs

	31 December 2020 €'000	31 December 2019 €'000
Financing costs on RCF	9,910	9,325
Financing costs on private placement debt	3,340	-
Cost associated with early close out of debt instrument	-	3,153
Gross financing costs	13,250	12,478
Less: Capitalised interest	(434)	(442)
Financing costs	12,816	12,036

16. Realised and Unrealised Gains and Losses on Derivative Financial Instruments

On 28 February 2017, I-RES entered into interest rate swap agreements aggregating to a notional amount of €160 million. The agreements have an effective date of 23 March 2017 and a maturity date of 14 January 2021. On 15 September 2017, I-RES entered into a new interest rate swap agreement totalling a notional amount of €44.8 million. The new agreement has an effective date of 15 September 2017 and a maturity date of 14 January 2021. Upon the expiration of the interest rate swap agreements on 14 January 2021, the interest on the entire RCF of €600 million is paid at a rate of 1.75% per annum plus the higher of the one-month or three-month EURIBOR rate (at the option of I-RES) or at a floor of zero if EURIBOR is negative. (see note 10 for further details)

In 2020, a fair value gain of €709,000 (31 December 2019: gain of €131,000) has been recorded in the consolidated statement of profit or loss and other comprehensive income and the fair value of the interest rate swaps was a liability of €84,000 at 31 December 2020 (31 December 2019: liability of €788,000).

On 12 February 2020, I-RES entered into a cross-currency swap to (i) hedge the US-based loan of USD $75 million into €68.8 million effective 11 March 2020 and (ii) convert the fixed interest rate on the US-based loan to a fixed Euro interest rate, maturing in 10 March, 2027 and 10 March 2030. (See note 11 for derivative fixed rates) This hedging agreement is accounted for as a cashflow hedge in accordance with the requirements of IFRS 9. Hedges are measured for effectiveness at each reporting date with the effective portion being recognised in equity in the hedging reserve, and the ineffective portion being recognized through profit or loss within financing costs.

In 2020, the ineffective portion that has been recorded in the consolidated statement of profit or loss and other comprehensive income was €nil and effective portion of €(4,533,000) included in the cash flow hedge reserve. The fair value of the interest rate swaps was an asset of €770,000 and a liability of €8,075,000 at 31 December 2020.

17. Financial Instruments, Investment Properties and Risk Management

a) Fair Value of Financial Instruments and Investment Properties

The Group classifies and discloses the fair value for each class of financial instrument based on the fair value hierarchy in accordance with IFRS 13. The fair value hierarchy distinguishes between market value data obtained from independent sources and the Group's own assumptions about market value. The hierarchy levels are defined below:

Level 1 - Inputs based on quoted prices in active markets for identical assets or liabilities;

Level 2 - Inputs based on factors other than quoted prices included in Level 1 and may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves that are observable at commonly quoted intervals; and

Level 3 - Inputs which are unobservable for the asset or liability and are typically based on the Group's own assumptions as there is little, if any, related market activity.

The Group's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgement and considers factors specific to the asset or liability.

The following table presents the Group's estimates of fair value on a recurring basis based on information available as at 31 December 2020, aggregated by the level in the fair value hierarchy within which those measurements fall.

As at 31 December 2020, the fair value of the Group's private placement debt is estimated to be €152.8 million. (31 December 2019: €nil) due to changes in interest rates since the private placement debt was issued and the impact of the passage of time on the fixed rate of the private placement debt. The fair value of the private placement debt is based on discounted future cash flows using rates that reflect current rate for similar financial instruments with similar duration, terms and conditions, which are considered Level 2 inputs.

As at 31 December 2020	Level 1	Level 2	Level 3
	Quoted prices in active markets for identical assets and liabilities	Significant other observable inputs	Significant unobservable inputs⁽¹⁾	Total
	€'000	€'000	€'000	€'000
Recurring Measurements - Assets
Investment properties	-	-	1,380,354	1,380,354
Derivative financial instruments	-	770	-	770
		770	1,380,354	1,381,124
Recurring Measurements - Liability
Derivative financial instruments⁽²⁾⁽³⁾	-	(8,159)	-	(8,159)
Total	-	(7,389)	1,380,354	1,372,965

As at 31 December 2019	Level 1	Level 2	Level 3
	Quoted prices in active markets for identical assets and liabilities	Significant other observable inputs	Significant unobservable inputs⁽¹⁾	Total
	€'000	€'000	€'000	€'000
Recurring Measurements - Assets
Investment properties	-	-	1,359,201	1,359,201
Recurring Measurements - Liability
Derivative financial instruments⁽²⁾	-	788	-	788
Total		788	1,359,201	1,359,989

(1) See note 5 for detailed information on the valuation methodologies and fair value reconciliation.

(2) The valuation of the interest rate swap instrument is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. The fair value is determined using the market-standard methodology of netting the discounted future fixed cash payments and the discounted variable cash receipts of the derivatives. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rates. If the total mark-to-market value is positive, I-RES will include a current value adjustment to reflect the credit risk of the counterparty, and if the total mark-to-market value is negative, I-RES will include a current value adjustment to reflect I-RES' own credit risk in the fair value measurement of the interest rate swap agreements.

(3) The cross currency swaps are valued by constructing the cash flows of each side and then discounting them back to the present using appropriate discount factors, including consideration of credit risk, in those currencies. The cash flows of the more liquidly quoted currency pair will be discounted using standard discount factors, while the cash flows of the less liquid currency pair will be discounted using cross-currency basis-adjusted discount factors. Following discounting, the spot rate will be used to convert the present value amount of the non-valuation currency into the valuation currency.

b) Risk Management

The main risks arising from the Group's financial instruments are market risk, interest rate risk, liquidity risk and credit risk. The Group's approach to managing these risks are summarised as follows:

Market Risk

Market risk is the risk that the fair value or cash flows of a financial instrument will fluctuate due to changes in market prices. Market risk reflects interest rate risk, currency risk and other price risks.

The Group's financial assets currently comprise short-term bank deposits, trade receivables, deposit on acquisition and derivatives.

Short-term bank deposits are held while awaiting suitable investment properties for investment. These are denominated in euros. Therefore, exposure to market risk in relation to these is limited to interest rate risk.

The Group also has private placement note that is denoted in USD. The Group's risk management strategy is to mitigate foreign exchange variability to the extent that it is practicable and cost effective to do so. The Group utilizes cross currency swaps to hedge the foreign exchange risk associated with a portion of the Company's existing, fixed foreign-currency denominated Borrowings. The use of cross-currency interest rate swaps is consistent with the Group's risk management strategy to effectively eliminate variability in the Group's functional currency equivalent cash flows on a portion of its Borrowings due to variability in the USD-EUR exchange rate. The hedges protect the Group against adverse variability in foreign exchange rates and the effective portion is recognised in equity in the hedging reserve, with the ineffective portion being recognised through profit or loss within financing costs.

Derivatives designated as hedges against foreign exchange risks are accounted for as cash flow hedges. Hedges are measured for effectiveness at each accounting date and the accounting treatment of changes in fair value revised accordingly. Specifically, the Company is hedging (1) the foreign exchange risk on the USD interest payments and (2) the foreign exchange risk on the USD principal repayment of the USD Borrowings at maturity. This hedging relationship qualifies for foreign currency cash flow hedge accounting.

On 12 February 2020, I-RES entered into cross-currency swaps to (i) exchange the USD loan of USD $75 million into €68.8 million effective 11 March 2020 and (ii) convert the fixed interest rate on the USD loan to a fixed Euro interest rate, maturing in 10 March 2027 and 10 March 2030.

At the inception of the hedging relationship the Company has identified the following potential sources of hedge ineffectiveness:

1. Movements in the Company's and hedging counterparty's credit spread that would result in movements in fair value of the Hedging Instrument that would not be reflected in the movements in the value of the Hedged Transactions.

2. The possibility of changes to the critical terms (e.g. reset dates, index mismatches, payment dates) of the Hedged Transaction due to a refinancing or debt renegotiation such that they no longer match those of the Hedging Instrument. The company would reflect such mismatch when modelling of the hypothetical derivative and this could be a potential source of hedge ineffectiveness.

Whilst sources of ineffectiveness do exist in the hedging relationship, the Company expects changes in value of both the Hedging Instrument and the Hedged Transaction to offset and systematically move in opposite directions given the critical terms of the Hedging Instrument and the Hedged Transactions are closely aligned at inception as described above. Therefore, the Company has qualitatively concluded that there is an economic relationship between the Hedging Instrument and the Hedged Transaction in accordance with IFRS 9.

Cash Flow Hedges

At 31 December 2020, the Group held the following instruments to hedge exposures to changes in foreign currency:

	31 December 2020	31 December 2027	31 December 2030
Cross Currency Swaps
Net exposure ( €'000)	68,852	22,951	-
Average fixed interest rate	1.96 %	2.25 %	-

The amounts at the reporting date relating to items designated as hedged items were as follows:

Change in value used for calculating
hedge ineffectiveness

(€'000)

Cashflow hedge reserve

(€'000)

Private placement debt

(4,533)

(77)

The amounts relating to items designated as hedging instruments and hedge ineffectiveness were as follows:

		Carrying amount		Changes in the value of hedging instrument recognized in OCI	Hedge ineffectiveness recognized in profit or loss	Line items in profit or loss that includes hedge ineffectiveness	Amount reclassed from hedging reserve to profit or loss	Line items in profit or loss affected by reclassification
	Nominal amount	Assets	Liability		Hedge ineffectiveness recognized in profit or loss		Amount reclassed from hedging reserve to profit or loss	Line items in profit or loss affected by reclassification
	(€'000)	(€'000)	(€'000)	(€'000)	(€'000)		(€'000)
Cross Currency Swaps	68,851	770	(8,075)	(4,370)	-	Gain on derivative financial	4,293	Financing costs

Master netting or similar agreements

The Group enters into derivative transactions under International Swaps and Derivatives Association (ISDA) master netting agreements. In general, under these agreements the amounts owed by each counterparty on a single day in respect of all transactions outstanding in the same currency are aggregated into a single net amount that is payable by one party to the other. In certain circumstances,all outstanding transactions under the agreement are terminated, the termination value is assessed and only a single net amount is payable in settlement of all transactions. The ISDA agreements do not meet the criteria for offsetting in the statement of financial position. This is because the Group does not have any currently legally enforceable right to offset recognised amounts, because the right to offset is enforceable only on the occurrence of future events.

The following table sets out the carrying amounts of recognised financial instruments that are subject to the above agreements.

		Gross amounts of financial instruments in the statement of financial position	Related financial instruments that are not offset	Net amount
31 December, 2020	Note	(€'000)	(€'000)	(€'000)
Financial assets
Derivative financial instruments	16	770	(770)	-
Financial liabilities
Derivative financial instruments	16	(8,075)	770	(7,305)

Managing interest rate benchmark reform and associated risks

A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates ("IBORs") with alternative nearly risk-free rates (referred to as 'IBOR reform'). The Group does not have any exposures to IBORs on its financial instruments that will be replaced or reformed as part of these market-wide initiatives. There is uncertainty over the timing and the methods of transition in some jurisdictions that the Group operates in. The Group anticipates that IBOR reform will not impact its risk management and hedge accounting.

Interest Rate Risk

With regard to the cost of borrowing, I-RES has used, and may continue to use hedging, where considered appropriate, to mitigate interest rate risk.

As at 31 December 2020, I-RES' RCF was drawn for €354.0 million. On 28 February 2017 and 15 September 2017, I-RES entered into interest rate swap agreements aggregating to €204.8 million. The interest rate swap agreements effectively convert the hedged portion of the RCF from a variable rate to a fixed rate facility to January 2021. The fixed interest rate with the swap is at 1.66% (1.75% less 0.09%). The agreements effectively convert borrowings on a EURIBOR-based floating rate RCF to a fixed rate facility. The interest on the remaining portion of the RCF is paid at a rate of 1.75% per annum plus the higher of the one-month or three-month EURIBOR rate (at the option of I-RES) or at a floor of zero if EURIBOR is negative. Subsequent to the year end, the interest rate swap agreements matured on 14 January 2021 and the interest on the entire RCF of €600 million is paid at a rate of 1.75% per annum plus the higher of the one-month or three-month EURIBOR rate (at the option of I-RES) or a floor of zero if EURIBOR is negative. The Group does not currently expect for the EURIBOR to go above zero in the medium term and therefore have not entered into new swaps to hedge the variable rate exposure. I-RES will continue to monitor the changes in the EURIBOR rate to determine whether additional interest rate hedging is required. As at 31 December 2020, 35% of our total debt is fixed at fixed interest rates. For the year ended 31 December 2020, a 100-basis point change in interest rates would have the following effect on the unhedged portion:

As at 31 December 2020

	Change in interest rates	Increase (decrease) in net income
	Basis Points	€'000
EURIBOR rate debt⁽¹⁾	+100	(782)
EURIBOR rate debt⁽²⁾	-100	-

(1) Based on the fixed margin of 1.75% plus the one-month EURIBOR rate as at 31 December 2020 of -0.578% on the unswapped portion of the RCF.

(2) Based on the fixed margin of 1.75% plus the floor of zero on the unswapped portion of the RCF.

As at 31 December 2019

	Change in interest rates	Increase (decrease) in net income
	Basis Points	€'000
EURIBOR rate debt⁽¹⁾	+100	(1,849)
EURIBOR rate debt⁽²⁾	-100	-

(1) Based on the fixed margin of 1.75% plus the one-month EURIBOR rate as at 31 December 2019 of -0.472% on the unswapped portion of the RCF.

(2) Based on the fixed margin of 1.75% plus the floor of zero on the unswapped portion of the RCF.

Liquidity Risk

Liquidity risk is the risk that the Group may encounter difficulties in accessing capital markets and refinancing its financial obligations as they come due.

The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation. The Group monitors the level of expected cash inflows on trade and other receivables, together with expected cash outflows on trade and other payables and capital commitments.

As at 31 December 2020	Total	6 months or less⁽¹⁾	6 to 12 months⁽¹⁾	1 to 2 years⁽¹⁾	2 to 5 years⁽¹⁾	More than 5 years⁽¹⁾
	€'000	€'000	€'000	€'000	€'000	€'000
Non-derivative financial liabilities
Loan drawn down	354,020	-	-	-	354,020	-
Bank indebtedness interest ⁽²⁾	21,352	3,072	3,123	6,195	8,962	-
Private placement debt	191,385	-	-	-	-	191,385
Private placement debt interest	40,965	2,295	2,295	4,590	13,770	18,015
Lease liability	12,082	314	314	628	1,883	8,943
Other liabilities	11,497	11,497	-	-	-	-
Security deposits	7,562	7,562	-	-	-	-
	638,863	24,740	5,732	11,413	378,635	218,343
Derivative financial liabilities
Interest rate swaps used for hedging	84	84	-	-	-	-
Forward exchange rate used for hedging:
Outflow	(79,733)	(687)	(687)	(1,381)	(4,114)	(72,864)
Inflow	77,586	1,075	1,075	2,150	6,450	66,836
	(2,063)	472	388	769	2,336	(6,028)

(1) Based on carrying value at maturity dates.

(2) Based on current in-place interest rate for the remaining term to maturity.

As at 31 December 2019	Total	6 months or less⁽¹⁾	6 to 12 months⁽¹⁾	1 to 2 years⁽¹⁾	2 to 5 years⁽¹⁾	More than 5 years⁽¹⁾
	€'000	€'000	€'000	€'000	€'000	€'000
Loan drawn down	555,020	-	-	-	555,020	-
Bank indebtedness interest ⁽²⁾	42,446	4,757	4,809	9,540	23,340	-
Derivative financial instruments	788		-	788	-	-
Lease liability	12,553	314	314	628	1,883	9,414
Other liabilities	10,022	10,022	-	-	-	-
Security deposits	7,158	7,158	-	-	-	-
	627,987	22,251	5,123	10,956	580,243	9,414

(1) Based on carrying value at maturity dates.

(2) Based on current in-place interest rate for the remaining term to maturity.

The carrying value of bank indebtedness and trade and other payables (other liabilities) approximates their fair value.

Credit Risk

Credit risk is the risk that: (i) counterparties to contractual financial obligations will default; or (ii) the possibility that the Group's tenants may experience financial difficulty and be unable to meet their rental obligations.

The Group monitors its risk exposure regarding obligations with counterparties through the regular assessment of counterparties' credit positions.

The Group mitigates the risk of credit loss with respect to tenants by evaluating the creditworthiness of new tenants and obtaining security deposits wherever permitted by legislation.

The Group monitors its collection experience on a monthly basis and ensures that a stringent policy is adopted to provide for all past due amounts. All residential accounts receivable balances exceeding 30 days are written off to bad debt expense and recognised in the consolidated statement of profit or loss and other comprehensive income. Subsequent recoveries of amounts previously written off are credited in the consolidated statement of profit or loss and other comprehensive income. The Group's allowance for expected credit loss amounted to €991,000 for the year ended 31 December 2020 and is recorded as part of property operating costs in the consolidated statement of operations. (31 December 2019: €581,000)

Cash and cash equivalents are held by major Irish and European institutions with credit ratings of A and AAA respectively. The Company deposits cash with individual institutions to avoid concentration of risk with any one counterparty. The Group has also engaged the services of a depository to ensure the security of the cash assets.

Risk of counterparty default arising on derivative financial instruments is controlled by dealing with high- quality institutions and by a policy limiting the amount of credit exposure to any one bank or institution. Derivative financial instrument counter parties have credit ratings in the range of A+ to BBB.

Capital Management

The Group's objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, I-RES may issue new shares or consider the sale of assets to reduce debt. I-RES, through the Irish REIT Regime, is restricted in its use of capital to making investments in real estate property in Ireland. I-RES intends to make distributions if its results of operations and cash flows permit in the future.

The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. At 31 December 2020, capital consists of equity and debt, and Group Total Gearing was 39.2%. I-RES seeks to use gearing to enhance shareholder returns over the long term. The level of gearing is monitored carefully by the Board.

The Board monitors the return on capital as well as the level of dividends paid to ordinary shareholders. Subject to distributable reserves, it is the policy of I-RES to distribute at least 85% of the Property Income of its Property Rental Business for each accounting period.

18. Taxation

I-RES elected for REIT status on 31 March 2014. As a result, from this date the Group is exempt from paying Irish corporation tax on the profits and gains from qualifying rental business in Ireland provided it meets certain conditions.

Instead, dividends paid to shareholders in respect of the Property Rental Business are treated for Irish tax purposes as income in the hands of shareholders. Corporation tax is still payable in the normal way in respect of income and gains from any residual business (generally including any property trading business) not included in the Property Rental Business. I-RES is also liable to pay other taxes such as VAT, stamp duty, land tax, local property tax and payroll taxes in the normal way.

Within the Irish REIT Regime, for corporation tax purposes the Property Rental Business is treated as a separate business from the residual business. A loss incurred by the Property Rental Business cannot be offset against profits of the residual business.

An Irish REIT is required, subject to having sufficient distributable reserves, to distribute to its shareholders (by way of dividend), on or before the filing date for its tax return for the accounting period in question, at least 85% of the Property Income of the Property Rental Business arising in each accounting period. Failure to meet this requirement would result in a tax charge calculated by reference to the extent of the shortfall in the dividend paid. A dividend paid by an Irish REIT from its Property Rental Business is referred to as a property income distribution. Any normal dividend paid from the residual business by the Irish REIT is referred to as a non-property income distribution dividend.

The Directors confirm that the Group has remained in compliance with the Irish REIT Regime up to and including the date of this Report and that there has been no profit arising from residual business activities.

19. Dividends

Under the Irish REIT Regime, subject to having sufficient distributable reserves, I-RES is required to distribute to shareholders at least 85% of the Property Income of its Property Rental Business for each accounting period, provided it has sufficient distributable reserves.

On 07 August 2020, the Directors resolved to pay an additional dividend of €14.3 million for the six months ended 30 June 2020. The dividend of 2.75 cents per share was paid on 11 September 2020 to shareholders on record as at 21 August 2020.

On 20 February 2020, the Directors resolved to pay an additional dividend of €16.2 million for the year ended 31 December 2019. The dividend of 3.1 cents per share was paid on 23 March 2020 to shareholders on record as at 28 February 2020.

On 9 August 2019, the Directors resolved to pay an interim dividend of €14.1 million for the six months ended 30 June 2019. The dividend of 2.7 cents per share was paid on 13 September 2019 to shareholders on record as at 23 August 2019.

On 22 February 2019, the Directors resolved to pay an additional dividend of €13.0 million for the year ended 31 December 2018. The dividend of 3.0 cents per share was paid on 29 March 2019 to shareholders on record as of 8 March 2019.

	31December2020	31 December2019
	€'000	€'000
Profit for theyear	58,263	86,282
Less: unrealized loss/(gain) in net movement in fair value of investment properties	(19,092)	(56,234)
Property Income of the Property Rental Business	39,171	30,048
Add back:
Share-based compensation expense	322	236
Unrealised change in fair value of derivatives	(709)	(131)
DistributableReserves	38,784	30,153

20. Supplemental Cash Flow Information

Breakdown of Operating Income Items Related to Financing and Investing Activities

For the year ended	31 December 2020	31 December 2019
	€'000	€'000
Financing costs as per the consolidated statement of profit or loss and other comprehensive income	12,816	12,036
Interest expense accrual	(1,311)	(315)
Capitalised interest	434	442
Lease interest	241	-
Less: amortisation of financing fees	(1,409)	(2,486)
Interest Paid on Loan Drawn Down	10,771	9,677

Changes in Operating Assets and Liabilities

For the year ended	31 December 2020	31 December 2019
	€'000	€'000
Prepayments	(350)	(1,358)
Trade receivables	(676)	160
Other receivables	(97)	1,018
Accounts payable and other liabilities	303	274
Security deposits	404	1,864
Changes in operating assetsandliabilities	(416)	1,958

Issuance of Shares

For the year ended	31 December 2020	31 December 2019
	€'000	€'000
Issuance of shares	3,536	135,142
Issuance costs	-	(3,129)
Netproceeds	3,536	132,013

Changes in Liabilities Due to Financing Cash Flows

			Changes from Financing Cash flows					Non-cash Changes
	1 January 2020	Proceeds from private placement debt	Revolving Credit Facility drawdown	Revolving Credit Facility repayment	Lease payments	Financing fees on private placement debt	Amortisation of other financing costs	Foreign exchange	Gain on derivatives	Interest accrual relating to derivatives	New hedging instrument	31 December 2020
Bank indebtedness	555,020	-	17,000	(218,000)	-	-	-	-	-	-	-	354,020
Deferred loan costs, net	(5,169)	-	-	-	-	-	1,198	-	-	-	-	(3,971)
Private Placement debt	-	196,342	-	-	-	-	-	(4,956)	-	-	-	191,386
Deferred loan costs, net	-	-	-	-	-	(2,595)	211	-	-	-	-	(2,384)
Derivative financial instruments	788	-	-	-	-	-	-	-	(709)	5	8,075	8,159
Lease liability	9,872	-	-	-	(386)	-	-	-	-	-	-	9,486
financing activities	560,511	196,342	17,000	(218,000)	(386)	(2,595)	1,409	(4,956)	(709)	5	8,075	556,696

21. Related Party Transactions

CAPREIT LP has an indirect 18.8% beneficial interest in I-RES and has determined that it has significant influence over I-RES. The beneficial interest is held through a qualifying investor alternative investment fund, Irish Residential Properties Fund, CAPREIT LP's wholly-owned subsidiary.

Effective 1 November 2015, CAPREIT LP's wholly-owned subsidiary, IRES Fund Management Limited ("the Manager" or "IRES Fund Management") entered into the investment management agreement with I-RES (the "Investment Management Agreement"), as amended or restated or as may be amended or restated from time to time, pursuant to which I-RES pays 3.0% per annum of its gross rental income as property management fees and 0.5% per annum of its net asset value together with relevant reimbursements as asset management fees to the Manager. The Investment Management Agreement governs the provision of portfolio management, risk management and other related services to the Company by the Manager on a day-to-day basis. The Investment Management agreement had an initial term of five years and thereafter continues in force for consecutive five-year periods.

The Manager has the ability to terminate the Investment Management Agreement by serving 12 months' notice of termination at any time after 1 November 2019. The Manager may also terminate the Investment Management Agreement at any time if required to do so by any competent regulatory authority, if the Company commits a material breach of the agreement which remains unremedied for 30 days, or if the Company enters an event of insolvency.

The Company may terminate the Investment Management Agreement if the Manager commits a material breach of the agreement which remains unremedied for 30 days, enters an event of insolvency, is no longer authorised to carry out the services under the Investment Management Agreement or if CAPREIT LP (or one of its affiliate) ceases to beneficially own 5% of the Company or ceases to control the Manager.

The Company also has the right to terminate the Investment Management Agreement since 1 November 2020 if it determines that internalisation of the management of the Company, subject to relevant regulatory approval, is in the Company's best interests. In such circumstances, the Investment Management Agreement provides for the Company to purchase the issued shares of the Manager on a liability free (other than liabilities in the ordinary course of business) / cash free basis for €1.

In November 2020, I-RES provided an update on the Investment Management Agreement between the Company, I-RES Residential Properties Limited and the Manager.

In advance of the expiry of the initial five year term of the IMA on 1 November 2020, the Related Party Committee (a committee of the Board which did not include either Mark Kenney or Phillip Burns given their respective relationships to CAPREIT) was appointed in November 2019 to conduct a scheduled review of the IMA and related Services Agreement, evaluate the strategic options available to I-RES in relation to them and consider certain related matters.

On the expiry date of the initial IMA term on 1 November 2020, the Related Party Committee had not reached agreement on new terms for a revised IMA with the Manager. As a result, in accordance with its terms the IMA has now continued for a second five-year term under the existing terms. Both parties have termination rights under the IMA which can now be exercised. In conjunction with the rollover of the IMA, I- RES announced that it would augment the management resources of the Company in line with its growth strategy and increased scale.

Certain transitional provisions apply under the Investment Management Agreement upon its termination in order to effect an orderly transition of the services to the Company. Other than fees or other monies accrued up to the point of termination, the Manager is not entitled to compensation on termination of the agreement.

In providing its services to the Company under the Investment Management Agreement, the Manager also has access to the expertise and resources provided by CAPREIT LP, pursuant to the Services Agreement between among the Company, CAPREIT LP and the Manager (as amended from time to time), which covers the performance of property and asset management services by CAPREIT LP. Among other customary termination provisions, the Services Agreement terminates on the termination of the Investment Management Agreement or where CAPREIT LP (or one of its affiliates) ceases to control the Manager.

For the year ended 31 December 2020, I-RES incurred €4.4 million in asset management fees. In addition,

€2.2 million in property management fees were incurred and recorded under operating expenses. For the year ended 31 December 2019, €4.0 million in asset management fees and €1.9 million in property management fees were recorded. For the year ended 31 December 2020, CAPREIT LP charged back €2.3 million (31 December 2019: €1.4 million) relating to salaries.

The amount payable to CAPREIT LP (including IRES Fund Management) totalled €1.4 million as at 31 December 2020 (€2.0 million as at 31 December 2019) related to asset management fees, property management fees, and payroll-related costs. The amount receivable from CAPREIT LP (including IRES Fund Management) totalled €0.2 million as at 31 December 2020 (€0.1 million as at 31 December 2019) related to the leasing of office space.

IRES Fund Management has one remaining lease for office space with I-RES as at 31 December 2020. The rental income for the office space for the year ended 31 December 2020 was €145,000 (€116,000 for the year ended 31 December 2019). The lease expires on 1 December 2021. Minimum annual rental payments from IRES Fund Management for the next year is as follows:

2021

€'000

Minimum annual rent payments from I-RES Fund Management

Directors

Phillip Burns is considered to be a non-independent director. Phillip Burns is Chief Executive Office, a director and a shareholder of European Residential Real Estate Investment Trust ("ERES"), a Canadian company that is a subsidiary of CAPREIT and has its shares listed on the Toronto Stock Exchange. In having regard to Euronext Dublin Listing Rule 2.10.11 and the provisions of the UK Corporate Governance Code given that, (i) in connection with a transaction entered into between ERES and CAPREIT, pursuant to which CAPREIT indirectly acquired control of ERES, Phillip Burns was appointed as a senior employee of CAPREIT LP, which has a material business relationship with the Company as it is the parent company of the Manager and (ii) this appointment together with the transaction completed between ERES and CAPREIT in March 2019 gives rise to a significant link with another director on the Board of the Company, Mark Kenney, President, Chief Executive Officer and trustee of CAPREIT.

Mark Kenney is a non-executive director of I-RES. He is also the President, Chief Executive Officer and a trustee of CAPREIT.

Purchase of I-RES Shares

On 20 November 2020, certain employees of CAPREIT, including Mark Kenney, (the "Participants")assigned I-RES options granted to them under the LTIP to a subsidiary of CAPREIT LP, Irish Residential Properties Fund (the "QIAIF"). Immediately following the assignment of these I-RES options, the QIAIF exercised these options and acquired an additional 3,400,000 Ordinary Shares in I-RES. The QIAIF paid each of the Participants the amount of €0.4770 per option, representing the difference between the exercise price (of €1.04 each) and the volume weighted average price of the underlying Ordinary Shares for the five business day period to close of business on 19 November 2020, being the business day immediately prior to the date of assignment. As CAPREIT is a related party of the Company under the Euronext Dublin Listing Rules, the allotment of the 3,400,000 shares to CAPREIT (through the QIAIF) immediately following the assignment constituted a smaller Related Party Transaction under LR 11.1.15 of the Listing Rules. As at 31 December 2020, CAPREIT LP's beneficial interest in I-RES is 18.8% (31 December 2019: 18.3%).

As part of these assignments on 20 November 2020, Mark Kenney assigned 1,000,000 of his I-RES options to the QIAIF.

On 18 June 2019, CAPREIT LP indirectly purchased 8,778,387 shares of I-RES. On 10 July 2019, CAPREIT LP indirectly purchased an additional 8,721,613 shares of I-RES.

Expenses

Total remuneration is comprised of remuneration of the non-executive Directors of €433,000 for the year ended 31 December 2020 and €384,000 for the year ended 31 December 2019, excluding remuneration related to the Chief Executive Officer.

Owners' Management Companies Not Consolidated

As a result of the acquisition by the Group of apartments or commercial space in certain residential rental properties, the Group holds voting rights in the relevant owners' management companies associated with those developments. Where the Group holds the majority of those voting rights, this entitles it, inter alia, to control the composition of such owners' management companies' boards of directors. However, as each of those owners' management companies is incorporated as a company limited by guarantee for the purpose of owning the common areas in residential or mixed-use developments, they are not intended to be traded for gains. For these reasons, I-RES does not consider these owners' management companies to be material for consolidation as the total asset of the owner's management companies is less than 0.3% of the Group's consolidated total assets, either individually or collectively. I-RES has considered the latest available financial statements of these owners' management companies in making this assessment.

Details of the owners' management companies in which the Group had an interest during the year ended 31 December 2020, along with the relevant service fees paid by the Group to them, are as follows:

			Percentage of Voting Rights	Service Fees Incurred	Payable	Prepaid
Owners' Management Entity	Registered Official Address	Development Managed	Held % of total⁽¹⁾	in the Period €'000	by I-RES €'000	by I-RES €'000
Majority voting rights held
Priorsgate Estate Owners' Management Company
Limited by Guarantee	Unit 4B Lazer Lane, Grand Canal Square, Dublin 2	Priorsgate	52.4	215.8	-	-
GC Square (Residential) Owners' Management Company
Limited by Guarantee	Unit 4B Lazer Lane, Grand Canal Square, Dublin 2	The Marker Residences	80.0	234.7	-	-
Landsdowne Valley Owners' Management Company
Limited by Guarantee⁽⁵⁾	Unit 4B Lazer Lane, Grand Canal Square, Dublin 2	Lansdowne Gate	78.6	512.8	-	213.8
Charlestown Apartments Owners' Management Company
Limited by Guarantee⁽³⁾	Unit 4B Lazer Lane, Grand Canal Square, Dublin 2	Charlestown	82.5	478.9	-	39.9
Bakers Yard Owners' Management Company
Limited By Guarantee	Ulysses House, Foley Street, Dublin 1	Bakers Yard	63.8	187.4	-	-

Rockbrook Grande Central Owners' Management Company
Limited by Guarantee	Unit 4B Lazer Lane, Grand Canal Square, Dublin 2	Grande Central	76.9	359.8	-	-
Rockbrook South Central Owners' Management Company
Limited by Guarantee	Unit 4B Lazer Lane, Grand Canal Square, Dublin 2	South Central	83.8	512.1	-	-
Rockbrook Estate Management Company
Limited by Guarantee	Unit 4B Lazer Lane, Grand Canal Square, Dublin 2	Rockbrook Commercial	64.3(2)	22.9	-	-
TC West Estate Management Company
Limited by Guarantee	Charter House, 5 Pembroke Row, Dublin 2 D02 FW61	Tallaght Commercial	75.0	390.4	-	417.3
TC West Residential Owners' Management Company
Limited by Guarantee⁽⁴⁾	Charter House, 5 Pembroke Row, Dublin 2 D02 FW62	Tallaght Residential	87.2	859.6	-	-
Gloucester Maple Owners' Management Company
Limited by Guarantee	Ti Phuirseil Freeport, Barna, Galway H91 W90P	City Square	85.2	51.6	2.9	-
Elmpark Green Residential Owners' Management Company
Limited By Guarantee	2 Lansdowne, Shelbourne Ballsbridge Dublin 4	Elmpark Green	60.5	531.3	-	125.0
Coldcut Owners' Management Company
Limited By Guarantee	c/o Brehan Capital Partners Limited, 2nd Floor, Guild House, Guild Street, Dublin 1	Coldcut Park	97.7	249.7	-	-
Time Place Property Management Company
Limited By Guarantee	RF Property Management, Ground Floor Ulusses House, 23/24 Foley Street, Dublin 1, D01 W2T2	Time Place Dublin 18	74.4	150.5	-	-
Burnell Green Management Company
Company Limited By Guarantee	City Junction Business Park, Northern Cross, Malahide Road, Dublin 17	Burnell Green Northern Cross Dublin 17	87.0	143.1	-	-
Feltrim Court Owners Management Company
Company Limited By Guarantee	87 Forrest Walk, Swords, Co Dublin, K67 V022	Russell Court Swords Co Dublin	80.6(7)	57.2	-	-
Minority voting rights held
BSQ Owners' Management Company
Limited by Guarantee⁽⁶⁾	5th Floor, St Stephen's Green House, Earlsfort Terrace St Stephens Green, Dublin 2	Beacon South Quarter	11.3	821.3	59.0	-
GC Square Management Company
Limited by Guarantee	2nd Floor, Guild House Guild Street, Dublin 1	The Marker Commercial	48.0	6.0	-	-
Sandyford Forum Management Company
Company Limited by Guarantee	28/30 Burlington Road Dublin 4	The Forum	6.3	12.7	-	6.1
Stapolin Management Company
Limited By Guarantee	15 Adelaide Street Dun Laoghaire, Co Dublin A96 D8Y9	Staploin	11.4	39.8	-	11.3
Red Arches Management Company
Limited by Guarantee	16 Adelaide Street Dun Laoghaire, Co Dublin A96 D8Y9	Red Arches	6.0	(1.4)	-	5.0
Stillbeach Management Company
Company Limited By Guarantee	Wyse 9 Lower Baggot Street Dublin 2 D02 XN82	Beechwood Court, Stillorgan Co Dublin	31.6	181.1	0.9	-
Burnell Court Management Company
Company Limited By Guarantee	City Junction Business Park, Northern Cross, Malahide Road, Dublin 17	Burnell Court Northern Cross Dublin 17	24.0	103.1	-	-
Carrington Park Residential Property Management Company
Limited By Guarantee	Rfpm Ulysses House Foley Street Dublin 1, D01 W2T2	Carrington Park Dublin 9	41.0	287.8	-	-
Heywood Court Management Company (Dublin) Company
Limited By Guarantee	Lansdowne Partnership, 69 Mespil Road, Dublin 4	Heywood Court Dublin 9	43.0	103.3	25.8	-
Hartys Quay Management Company
Limited By Guarantee	David O'Suillivan & Co 1st Floor Red Abbey Bld, Unit 20, South Link Industrial Estate Cork	Hartys Quay Co Cork	29.0	104.8	-	-
Belville Court Management Company
Company Limited By Guarantee	1/2 Windsor Terrace, Dun Laoghaire, Co Dublin	Belville Dublin 18	48.0	55.0	22.9	-
Stag Management Company
Limited By Guarantee	Rathgar House 53a Rathgar Avenue, Rathgar, Dublin 6, D06 K5K2	Belleville Castleknock Dublin 15	18.2(7)	19.6	-	-
The Mills Twelfth Lock Management Company
Company Limited By Guarantee	11 The Mills, Castleknock, Dublin 15, D15 FC64	Twelfth Lock, Castleknock, Dublin 15	7.3(7)	6.2	-	-
St Edmunds Management Company
Limited By Guarantee	Smith Property Management Block 37/41, Dunboyne Business Park, Dunboyne, Co Meath A86 Xy27	Palmerstown Dublin 20	5.8(7)	32.4	-	-
Custom House Square Management Company
Limited By Guarantee	C/O Anne Brady McQuillain Dfk, Iveagh Court, Harcourt Road, Dublin 2.	Custom House Square, IFSC, Dublin 1	2.0	29.6	-	-
Malahide Waterside Management Company
Limited By Guarantee	Office 3 The Eden Business Centre, Grande Road, Rathfarnham, Dublin 16, D16 T293	Waterside	9.6	10.3	-	5.2
Total				6,769.4	111.5	823.6

(1) For residential apartments the voting rights are calculated based on one vote per apartment regardless of the size of that apartment. For commercial, it is based on square footage of the units or the memorandum and articles of the particular management company.

(2) Includes voting rights controlled directly and indirectly.

(3) Formerly known as Charlestown Apartments Management Company, Company Limited By Guarantee.

(4) Formerly known as TC West Residential Owners Management Company, Company Limited by Guarantee.

(5) Formerly known as Landsdowne Valley Management Company, Company Limited by Guarantee.

(6) Formerly known as BSQ Management Company, Company Limited by Guarantee.

(7) Properties disposed during 2020 resulting in no ownership interest at 31 December 2020.

All of the owners' management companies are incorporated in Ireland and are property management companies. As noted above, as at 31 December 2020, €111,500 is payable and €823,600 is prepaid by the Group to the owners' management companies. As at 31 December 2019, €92,500 was payable and €164,400 was prepaid by I-RES to the owners' management companies.

22. Contingencies

At Beacon South Quarter, in addition to the capital expenditure work that has already been completed, water ingress and fire remediation works were identified in 2016, and I-RES is working with the Beacon South Quarter owners' management company to resolve these matters. In 2017, in relation to these water ingress and fire remedial works, levies were approved by the members of the Beacon South Quarter owners' management company. I-RES' portion of these levies as at 31 December 2020 is circa €0.6 million. There is also an active insurance claim with respect to the water ingress and related damage. The amount of potential costs relating to these structural remediation works cannot be currently measured with sufficient reliability.

23. Commitments

In November 2018, the Company entered into a share purchase agreement to acquire 69 residential units for a total consideration of €47.16 million (including VAT but excluding other transaction costs). Practical completion of the units is expected to be on or around early 2022.

In January 2020, the Company entered into a development contract to develop 61 units for a total consideration of circa €16 million and the amount outstanding as of 31 December 2020 is circa €12.5 million.

In June 2020, the Company entered into a contract for fire remedial works at 17 properties in its portfolio for a total of circa €4.5 million and the remaining amount as at 31 December 2020 is circa €2.1 million.

24. Earnings per Share

Earnings per share amounts are calculated by dividing profit for the reporting period attributable to ordinary shareholders of I-RES by the weighted average number of ordinary shares outstanding during the reporting period.

For the year ended	31 December 2020	31 December 2019
Profit attributable to shareholders of I-RES (€'000)	58,263	86,282
Basic weighted average number of shares	522,069,110	478,563,272
Diluted weighted average number of shares (1)(2)	524,130,528	481,508,009
Basic Earnings per share (cents)	11.2	18.0
Diluted Earnings per share (cents)	11.1	17.9

(1) Diluted weighted average number of shares includes the additional shares resulting from dilution of the long-term incentive plan options as of the reporting period date.

(2) At 31 December 2020, 4,596,499 options (31 December 2019: 4,596,499) were excluded from the diluted weighted average number of ordinary shares because their effect would have been anti-dilutive.

EPRA issued Best Practices Recommendations most recently in October 2019, which gives guidelines for performance matters.

EPRA Earnings represents the earnings from the core operational activities (recurring items for I-RES). It is intended to provide an indicator of the underlying performance of the property portfolio and therefore excludes all components not relevant to the underlying and recurring performance of the portfolio, including any revaluation results and results from the sale of properties. EPRA Earnings per share amounts are calculated by dividing EPRA Earnings for the reporting period attributable to shareholders of I-RES by the weighted average number of ordinary shares outstanding during the reporting period.

EPRA Earnings per Share

For the year ended	31 December 2020	31 December 2019
Profit for the year (€'000)	58,263	86,282
Adjustments to calculate EPRA Earnings exclude:
Costs associated with early close out of debt instrument (€'000)	-	3,153
Changes in fair value on investment properties (€'000)	(19,092)	(56,234)
Profit or losses on disposal of investment property	(4,432)	-
Changes in fair value of derivative financial instruments (€'000)	(709)	(131)
EPRA Earnings (€'000)	34,030	33,070
Basic weighted average number of shares	522,069,110	478,563,272
Diluted weighted average number of shares	524,130,528	481,508,009
EPRA Earnings per share (cents)	6.5	6.9
EPRA Diluted Earnings per share (cents)	6.5	6.9

25. Net Asset Value per Share

EPRA issued Best Practices Recommendations most recently performance matters in October 2019, which gives guidelines for performance matters.

In October 2019, EPRA introduced three EPRA NAV metrics to replace the existing EPRA NAV calculation that was previously being presented. The three EPRA NAV metrics are EPRA Net Reinstatement Value ("EPRA NRV'), EPRA Net Tangible Asset ("EPRA NTA") and EPRA Net Disposal Value ("EPRA NDV"). Each EPRA NAV metric serves a different purpose. The EPRA NRV measure is to highlight the value of net assets on a long term basis. EPRA NTA assumes entities buy and sell assets, thereby crystallising certain levels of deferred tax liability. Lastly, EPRA NDV provides the reader with a scenario where deferred tax, financial instruments, and certain other adjustments are calculated to the full extent of their liabilities. The table below presents the transition between the Group's shareholders' equity derived from financial statements and the various EPRA NAV.

EPRA NAV per Share

As at	EPRA NRV	31 December 2020 EPRA NTA (1)	EPRA NDV (2)
Net assets (€'000)	841,695	841,695	841,695
Adjustments to calculate EPRA net assets exclude:
Fair value of derivative financial instruments (€'000)	84	84	-
Fair value of fixed interest rate debt (€'000)	-	-	36,219
Real estate transfer tax (€'000) (3)	62,138	-	-
EPRA net assets (€'000)	903,917	841,779	877,914
Number of shares outstanding	525,078,946	525,078,946	525,078,946
Diluted number of shares outstanding	526,289,910	526,289,910	526,289,910
Basic Net Asset Value per share (cents)	160.3	160.3	160.3
EPRA Net Asset Value per share (cents)	171.8	159.9	166.8

As at	EPRA NRV	31 December 2019 EPRA NTA (1)	EPRA NTA (2)
Net assets (€'000)	810,169	810,169	810,169
Adjustments to calculate EPRA net assets exclude:
Fair value of derivative financial instruments (€'000)	788	788	-
Adjustments to calculate EPRA net assets include:
Real estate transfer tax (€'000) (3)	56,753	-	-
EPRA net assets (€'000)	867,710	810,957	810,169
Number of shares outstanding	521,678,946	521,678,946	521,678,946
Diluted number of shares outstanding	524,529,943	524,529,943	524,529,943
Basic Net Asset Value per share (cents)	155.3	155.3	155.3
EPRA Net Asset Value per share (cents)	165.4	154.6	154.5

(1) Following changes to the Irish REIT legislation introduced in October 2019, if a REIT disposes of an asset of its property rental business and does not (i) distribute the gross disposal proceeds to shareholders by way of dividend; (ii) reinvest them into other assets of its property rental business (whether by acquisition or capital expenditure) within a three-year window (being one year before the sale and two years after it); or (iii) use them to repay debt specifically used to acquire, enhance or develop the property sold, then the REIT will be liable to tax at a rate of 25% on 85% of the gross disposal proceeds, subject to having sufficient distributable reserves. For the purposes of EPRA NTA, the Group have assumed any such sales proceeds are reinvested within the required three year window.

(2) Deferred tax is assumed as per the IFRS statement of financial position. To the extent that an orderly sale of the Group's asset was undertaken over a period of several years, during which time (i) the Group remained a REIT; (ii) no new assets were acquired or sales proceeds reinvested; (iii) any developments completed were held for three years from completion; and (iv) those assets were sold at 31 December 2020 valuations, the sales proceeds would need to be distributed to shareholders by way of dividend within the required time frame or else a tax liability amounting to up to 25% of distributable reserves plus current unrealised revaluation gains could arise for the Group.

26. Directors' Remuneration, Employee Costs and Auditor Remuneration

Key Management personnel of the Group consist of the Board of directors. The remuneration of the key management personnel paid during the year were as follows:

For the year ended	31 December 2020	31 December 2019
	€'000	€'000
Directors' remuneration
Short-term employee benefits	919	1,361
Pension costs	60	60
Other benefits⁽¹⁾	139	125
Share-based payments⁽²⁾	322	236
Total	1,440	1,782

(1) Included in this amount is pay-related social insurance and benefits paid for the Directors.

(2) Included in share-based payments are 4,596,499 stock options that were anti-dilutive as at 31 December 2020.

For the year ended	31 December 2020	31 December 2019
	€'000	€'000
Employees costs
Salaries, benefits and bonus	678	1,040
Social insurance costs	112	90
Pension costs	65	60
Share-based payments	322	236
Total	1,177	1,426

For the year ended	31 December 2020	31 December 2019
	€'000	€'000
Auditor remuneration (including expenses)(1)
Audit of the Group accounts	135	128
Other assurance services(2)	15	22
Non-assurance services(3)	100	-
Total	250	150

(1) Included in the auditor remuneration for the Group is an amount of €125,000 (31 December 2019: €125,000) that relates to the audit of the Company's financial statements.

(2) Non-audit remuneration for 31 December 2020 and 31 December 2019 relates to review of interim financial statements

(3) Non-assurance services advisory fee for a transaction that did not close due to Covid-19.

27. Holding Company Details

The name of the holding company of the Group is Irish Residential Properties REIT plc. The legal form of the Company is a public limited company. The place of registration of the holding company is Dublin, Ireland and its registration number is 529737. The address of the registered office is South Dock House, Hanover Quay, Dublin 2, Ireland.

28. Subsequent Events

On 28 January 2021, I-RES announced that it has completed the purchase of 146 residential units at Phoenix Park racecourse for a purchase price of €60 million (including VAT but excluding other transaction costs). The transaction is funded by the RCF.

Supplementary Information

EPRA Performance Measures and Disclosures (Unaudited)

The following EPRA performance measures are presented to improve transparency, comparability and relevance across the European listed real estate industry.

EPRA Earnings per Share (EPS)

EPRA Earnings represents the earnings from the core operational activities (recurring items for the Company). It is intended to provide an indicator of the underlying performance of the property portfolio and therefore excludes all components not relevant to the underlying and recurring performance of the portfolio, including any revaluation results and results from the sale of properties. EPRA EPS is calculated by dividing EPRA Earnings for the reporting period attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the reporting period. It has been presented as the Company believes this measure is indicative of the performance of the Group's operations.

EPRA Diluted Earnings per Share

EPRA Diluted EPS is calculated by dividing EPRA Earnings for the reporting period attributable to shareholders of the Company by the diluted weighted average number of ordinary shares outstanding during the reporting period. It has been presented as the Company believes this measure is indicative of the performance of the Group's operations.

EPRA NAV per Share

The three EPRA NAV metrics are EPRA Net Reinstatement Value ("EPRA NRV'), EPRA Net Tangible Asset ("EPRA NTA") and EPRA Net Disposal Value ("EPRA NDV"). Each EPRA NAV metric serves a different purpose. The EPRA NRV measure is to highlight the value of net assets on a long term basis. EPRA NTA assumes entities buy and sell assets, thereby crystallising certain levels of deferred tax liability. No deferred tax liability is calculated for I-RES as it is a REIT, and taxes are paid at the shareholder level on the distributions. Any gains arising from the sale of a property are expected either to be revinvested for growth or 85% of the net proceeds are distributed to the shareholders to maintain the REIT status. Lastly, EPRA NDV provides the reader with a scenario where deferred tax, financial instruments, and certain other adjustments are calculated to the full extent of their liabilities. To optimise these measures, I-RES focuses on growing asset value and maximising shareholder value through active and efficient asset and property management. They have been presented as the Company believes these measures are indicative of the Group's operating performance and value growth.

EPRA Net Initial Yield (EPRA NIY)

EPRA NIY is calculated as the annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the gross market value of the property. It has been presented by the Company to improve comparability of yield measures across the European real estate market.

EPRA "topped-up" Net Initial Yield (EPRA "topped-up" NIY)

EPRA "topped-up" NIY is calculated by making an adjustment to the EPRA NIY in respect of the expiration of rent-free periods or other unexpired lease incentives such as discounted rent periods and step rents. It has been presented by the Company to improve comparability of yield measures across the European real estate market.

EPRA Vacancy Rate

EPRA Vacancy Rate is calculated as the percentage of estimated residential rental value of vacant space divided by the estimated residential rental value of the whole portfolio as at the reporting date. The estimated rental value excludes properties under development, commercial properties and development land. It has been presented by the Company to improve comparability of the vacancy measure across the European residential real estate market.

EPRA Performance Measure

	Unit	31 December 2020	31 December 2019
EPRA Earnings	€'000	34,030	33,070
EPRA EPS	€ cents/share	6.5	6.9
Diluted EPRA EPS	€ cents/share	6.5	6.9
EPRA NRV	€'000	903,917	867,710
EPRA NRV per share	€ cents/share	171.8	165.4
EPRA NTA	€'000	841,779	810,957
EPRA NTA per share	€ cents/share	159.9	154.6
EPRA NDV	€'000	877,914	810,169
EPRA NDV per share	€ cents/share	166.8	154.5
EPRA NIY	%	4.2 %	4.4 %
EPRA "topped up" NIY	%	4.2 %	4.4 %
EPRA vacancy rate	%	1.7 %	2.2 %

EPRA Earnings per Share

For the year ended	31 December 2020	31 December 2019
Profit for the year (€'000)	58,263	86,282
Adjustments to calculate EPRA Earnings exclude:
Costs associated with early close out of debt instrument (€'000)	-	3,153
Changes in fair value on investment properties (€'000)	(19,092)	(56,234)
Profit or losses on disposal of investment property	(4,432)	-
Changes in fair value of derivative financial instruments (€'000)	(709)	(131)
EPRA Earnings (€'000)	34,030	33,070
Basic weighted average number of shares	522,069,110	478,563,272
Diluted weighted average number of shares	524,130,528	481,508,009
EPRA Earnings per share (cents)	6.5	6.9
EPRA Diluted Earnings per share (cents)	6.5	6.9

EPRA NAV per Share

As at 31 December 2020	EPRA NRV	EPRA NTA⁽¹⁾	EPRA NDV⁽²⁾
Net assets (€'000)	841,695	841,695	841,695
Adjustments to calculate EPRA net assets exclude:
Fair value of derivative financial instruments (€'000)	84	84	-
Fair value of fixed interest rate debt (€'000)	-	-	36,219
Real estate transfer tax (€'000) (3)	62,138	-	-
EPRA net assets (€'000)	903,917	841,779	877,914
Number of shares outstanding	525,078,946	525,078,946	525,078,946
Diluted number of shares outstanding	526,289,910	526,289,910	526,289,910
Basic Net Asset Value per share (cents)	160.3	160.3	160.3
EPRA Net Asset Value per share (cents)	171.8	159.9	166.8

As at 31 December 2019	EPRA NRV	EPRA NTA⁽¹⁾	EPRA NDV⁽²⁾
Net assets (€'000)	810,169	810,169	810,169
Adjustments to calculate EPRA net assets exclude:
Fair value of derivative financial instruments (€'000)	788	788	-
Adjustments to calculate EPRA net assets include:
Real estate transfer tax (€'000)(3)	56,753	-	-
EPRA net assets (€'000)	867,710	810,957	810,169
Number of shares outstanding	521,678,946	521,678,946	521,678,946
Diluted number of shares outstanding	524,529,943	524,529,943	524,529,943
Basic Net Asset Value per share (cents)	155.3	155.3	155.3
EPRA Net Asset Value per share (cents)	165.4	154.6	154.5

EPRA Net Initial Yield (NIY)

As at	31 December 2020	31 December 2019
	(€'000)	(€'000)
Annualised passing rent	74,249	72,798
Less: Operating expenses(1) (property outgoings)	(14,850)	(13,540)
Annualised net rent	59,399	59,258
Notional rent expiration of rent-free periods(2)	21	93
Topped-up net annualised rent	59,420	59,351
Completed investment properties	1,346,683	1,293,241
Add: Allowance for estimated purchaser's cost	62,138	56,260
Gross up completed portfolio valuation	1,408,821	1,349,501
EPRA Net Initial Yield	4.2 %	4.4 %
EPRA topped-up Net Initial Yield	4.2 %	4.4 %

(1) Calculated based on the net rental income to operating revenue ratio of 80.0%.

(2) For the year ended 31 December 2020.

EPRA Vacancy Rate⁽³⁾

As at	31 December 2020	31 December 2019
	(€'000)	(€'000)
Estimated rental value of vacant space	1,203	1,569
Estimated rental value of the portfolio	72,762	71,788
EPRA Vacancy Rate	1.7 %	2.2 %

(3) Based on the residential portfolio

EPRA Capital Expenditure Disclosure

EPRA recommends that capital expenditures, as stated on the financial statements, be split into four components based on the nature of the assets the expenditures were on to allow for enhanced comparability. Namely, the categories are acquisitions, development, like-for-like portfolio, and other items.

For the year ended	31 December 2020	31 December 2019
	(€'000)	(€'000)
Acquisitions	336	671
Development	16,102	28,958
Like-for-like⁽⁴⁾	9,650	7,312
Total Capital Expenditure	26,088	36,941

(4) For 2020, Like-for-like is defined as properties held as of 31 December 2019

Glossary of Terms

The following explanations are not intended as technical definitions, but rather are intended to assist the reader in understanding terms used in this report.

"Annualised Passing Rent"

Defined as the actual monthly residential and commercial rents under contract with residents as at the stated date, multiplied by 12, to annualize the monthly rent;

"Average Monthly Rent (AMR)"

Actual monthly residential rents, net of vacancies, as at the stated date, divided by the total number of apartments owned in the property;

"Basic Earnings per Share (Basic EPS)"

Calculated by dividing the profit for the reporting period attributable to ordinary shareholders of the Company in accordance with IFRS by the weighted average number of ordinary shares outstanding during the reporting period;

"Companies Act, 2014"

The Irish Companies Act, 2014;

Diluted Weighted Average Number of Shares"

Includes the additional shares resulting from dilution of the long-term incentive plan options as of the reporting period date;

"EBITDA"

Represents earnings before lease interest, financing costs, depreciation of property, plant and equipment, gain or loss on disposal of investment property, net movement in fair value of investment properties and gain or loss on derivative financial instruments to show the underlying operating performance of the Group.

"EPRA"

The European Public Real Estate Association;

"EPRA Diluted EPS"

Calculated by dividing EPRA Earnings for the reporting period attributable to shareholders of the Company by the diluted weighted average number of ordinary shares outstanding during the reporting period. EPRA Earnings measures the level of income arising from operational activities. It is intended to provide an indicator of the underlying income performance generated from leasing and management of the property portfolio, while taking into account dilutive effects, and therefore excludes all components not relevant to the underlying net income performance of the portfolio, such as unrealised changes in valuation and any gains or losses on disposals of properties;

"EPRA EPS"

Calculated by dividing EPRA Earnings for the reporting period attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the reporting period. EPRA Earnings measures the level of income arising from operational activities. It is intended to provide an indicator of the underlying income performance generated from leasing and management of the property portfolio and therefore excludes all components not relevant to the underlying net income performance of the portfolio, such as unrealised changes in valuation and any gains or losses on disposals of properties;

"EPRA NAV"

EPRA introduced three EPRA NAV metrics to replace the existing EPRA NAV calculation that was previously being presented. The three EPRA NAV metrics are EPRA Net Reinstatement Value ("EPRA NRV'), EPRA Net Tangible Asset ("EPRA NTA") and EPRA Net Disposal Value ("EPRA NDV"). Each EPRA NAV metric serves a different purpose. The EPRA NRV measure is to highlight the value of net assets on a long term basis. EPRA NTA assumes entities buy and sell assets, thereby crystallising certain levels of deferred tax liability. Any gains arising from the sale of a property are expected either to be revinvested for growth or 85% of the net proceeds are distributed to the shareholders to maintain the REIT status. Lastly, EPRA NDV provides the reader with a scenario where deferred tax, financial instruments, and certain other adjustments are calculated to the full extent of their liabilities.

"EPRA NAV per Share"

Calculated by dividing each of the EPRA NAV metric by the diluted number of ordinary shares outstanding as at the end of the reporting period;

"Equivalent Yields (formerly referred as Capitalisation Rate)"

The rate of return on a property investment based on current and projected future income streams that such property investment will generate. This is derived by the external valuers and is used to estimate the term and reversionary yields;

"Group Total Gearing"

Calculated by dividing the Group's aggregate borrowings (net of cash) by the market value of the Group's portfolio value consistent with the financial covenant of the Group's Revolving Credit Facility and the Notes;

"Gross Yield"

Calculated as the Annualised Passing Rent as at the stated date, divided by the fair value of the investment properties, excluding fair value of development land and investment properties under development as at the reporting date;

"Irish REIT Regime"

Means the provisions of the Irish laws and regulations establishing and governing real estate investment trusts, in particular, but without limitation, section 705A of the Taxes Consolidation Act, 1997 (as inserted by section 41(c) of the Finance Act, 2013), as amended from time to time;

"Market Capitalisation"

Calculated as the closing share price multiplied by the number of shares outstanding;

"Net Asset Value" or "NAV"

Calculated as the value of the Group's or Company's assets less the value of its liabilities measured in accordance with IFRS;

"Net Asset Value per share"

Calculated by dividing NAV by the basic number of ordinary shares outstanding as at the end of the reporting period;

"Net Rental Income (NRI)"

Measured as property revenue less property operating expenses;

"Net Rental Income Margin"

Calculated as the NRI over the revenue from investment properties;

"Occupancy Rate"

Calculated as the total number of apartments occupied over the total number of apartments owned as at the reporting date;

"Property Income"

As defined in section 705A of the Taxes Consolidation Act, 1997. It means, in relation to a company or group, the Property Profits of the company or group, as the case may be, calculated using accounting principles, as: (a) reduced by the Property Net Gains of the company or group, as the case may be, where Property Net Gains arise, or (b) increased by the Property Net Losses of the company or group, as the case may be, where Property Net Losses arise;

"Property Profits"

As defined in section 705A of the Taxes Consolidation Act, 1997;

"Property Net Gains"

As defined in section 705A of the Taxes Consolidation Act, 1997;

"Property Net Losses"

As defined in section 705A of the Taxes Consolidation Act, 1997;

"Property Rental Business"

As defined in section 705A of the Taxes Consolidation Act, 1997;

"Sq. ft."

Square feet;

"Sq. m."

Square metres;

"Stabilised NRI"

Measured as property revenue less property operating expenses adjusted for market-based assumptions such as long-term vacancy rates, management fees, repairs and maintenance;

"Vacancy Costs"

Defined as the value of the rent on unoccupied residential apartments and commercial units for the specified period.

Forward-Looking Statements

I-RES Disclaimer

This Report includes statements that are, or may deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "anticipates", "believes", "estimates", "expects", "intends", "plans", "projects", "may" or "should", or, in each case, their negative or other comparable terminology, or by discussions of strategy, plans, objectives, trends, goals, projections, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Report and include, but are not limited to, statements regarding the intentions, beliefs or current expectations of I-RES concerning, amongst other things, its results of operations, financial position, liquidity, prospects, growth, strategies and expectations for its industry. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of I-RES and/or the industry in which it operates to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. As a result, you are cautioned not to place any reliance on such forward-looking statements and neither I-RES nor any other person accepts responsibility for the accuracy of such statements.

Nothing in this Report should be construed as a profit forecast or a profit estimate.

The forward-looking statements referred to in this report speak only as at the date hereof. Except as required by law or any appropriate regulatory authority, I-RES expressly disclaims any obligation or undertaking to release publicly any revision or updates to these forward-looking statements to reflect any change in (or any future) events, circumstances, conditions, unanticipated events, new information, any change in I-RES' expectations or otherwise including in respect of the Covid-19 pandemic, the uncertainty of its duration and impact, and any government regulations or legislation related to it.

Shareholder Information

Head Office

South Dock House Hanover Quay Dublin 2, Ireland

Tel: +353 (0)1 557 0974

Website: www.iresreit.ie

Directors

Aidan O'Hogan Declan Moylan Joan Garahy Mark Kenney

Margaret Sweeney Phillip Burns

Tom Kavanagh

Investor Information

Analysts, shareholders and others seeking financial data should visit I-RES' website at https://investorrelations.iresreit.ie or contact:

Chief Executive Officer

Margaret Sweeney

Tel: +353 (0)1 557 0974

E-mail: investors@iresreit.ie

Company Secretary

Elise Lenser

Tel: +353 (0) 1 557 0974

E-mail: companysecretary@iresreit.ie

Registrar and Transfer Agent

Computershare Investor Services (Ireland) Limited 3100 Lake Drive

Citywest Business Campus Dublin 24, Ireland

Tel: +353 (0)1 447 5566

Depositary

BNP Paribas Securities Services, Dublin Branch Trinity Point

10-11 Leinster Street South Dublin 2, Ireland

Auditor

KPMG

1 Stokes Place

St. Stephen's Green Dublin 2, Ireland

Legal Counsel

McCann FitzGerald Riverside One

Sir John Rogerson's Quay Dublin 2, D02 X576 Ireland

Stock Exchange Listing

Shares of I-RES are listed on Euronext Dublin under the trading symbol "IRES".

[1] This announcement incorporates the financial information of the Company and its wholly-owned subsidiary, IRES Residential Properties Limited, together referred to as the "Group", for the year from 1 January 2020 to 31 December 2020.

[2] Refer to page 21 for calculation of EPRA Earnings and Adjusted EPRA Earnings

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