Cuckoo fund landlord plans to beat inflation with double-digit rent hikes for city dwellers

US real estate group Greystar, which has bought more than 600 units in Dublin since 2019 and is on the hunt for more, already charges prices as high as €5,220 per month for three-bed apartments and is now looking for even more money.

The company has just raised a €1.55bn fund to snap up new homes in its core European markets, including Ireland, to take advantage of surging rents and protect its returns from record inflation.

But tenants will get no such protection, as the corporate landlord intends to jack up prices to match runaway increases in consumer prices, which are expected to top 10pc this month.

Greystar senior managing director for Europe Mark Allnut told the Financial Times that even a slowing economy would not stop the company from putting up rents in line with inflation, because of “chronic undersupply”.

That means the cost of renting could continue to climb by double digits, even as house price increases are slowing.

It will spark fears that other “cuckoo fund” landlords will follow suit, as they have investors to satisfy.

Recently it was estimated that cuckoo funds own more than 15,000 homes in Ireland, making them a huge player in our residential property market.

Mr Allnut said residential property was seen as an inflation hedge for the investors backing his fund, which attracted far more interest than its original €1bn target amount amid huge post-pandemic appetite to buy into European housing. The company said the fund would focus on the acquisition and development of rental apartments, student housing and co-living developments “where a growing cohort of renters face... a significant undersupply of quality housing”.

Greystar has already committed nearly €1bn of the fund and has another €550m to spend across its core markets in the UK, Ireland, Germany, Spain, Netherlands, Austria and France.

The South Carolina-based firm acquired the 342-unit Griffith Wood development from Cairn Homes last year and has owned Dublin Landings, a 268-unit apartment complex on North Wall Quay, since 2019.

It has €8bn in assets under management across Europe and has the financial firepower to make major impacts in local markets by buying large amounts of stock. The new fund has already bought 11,000 homes in six countries.

Its Dublin rental units are among the most expensive in the capital, with prices ranging from €2,140 for a one-bed apartment in Griffith Wood, Drumcondra, to €5,220 for a three-bed duplex in the luxury Quayside Quarter development.

The company was also revealed on RTÉ’s Liveline to be charging an extra €75 per month in pet rent – above its already market-leading prices – for tenants with cats or dogs.

All of Greystar’s properties are located in rent pressure zones, meaning current tenants theoretically face maximum increases of 2pc.

However, the rules allow landlords to roll up multiple backdated rent hikes in one go if the rent has stayed the same for several years.

** Following the original publication of this article on July 8th Greystar contacted Independent.ie to confirm that none of its current tenants in Ireland can be subject to rent increases above the 2pc rent hike cap which is in place in pressure zones. The company further pointed out that none of its residential tenancies here has been in place long enough to qualify under the feature in the rules that does allow greater than 2pc rent rises in some cases if a tenancy has been in place with no increases for a number of years.

Rents on new units are unaffected by any rent caps and owners are free to set the price according to the market.