Glen­veagh eyes €500m of re­li­gious or­ders’ prop­erty

Stock mar­ket-bound home­builder says 30 sites could pro­vide 6,500 homes Com­pany ex­pects up to €5bn of land to come on the mar­ket un­til 2020

The Irish Times - Business - - Front Page - JOE BREN­NAN

Glen­veagh Prop­er­ties, the new home­builder pre­par­ing to float on the Ir­ish and Lon­don stock mar­kets next week, sees re­li­gious or­ders sell­ing or en­ter­ing joint ven­tures to de­velop as a key source of more than €500 mil­lion of land that could be built on over the next five years.

A draft prospec­tus for the com­pany’s planned €550 mil­lion ini­tial pub­lic of­fer­ing (IPO), seen by The Ir­ish Times, says that the com­pany ex­pects up to €5 bil­lion of land to come on the mar­ket up un­til 2020, pro­vid­ing a ready mar­ket for Glen­veagh to ac­quire or en­ter into joint ven­tures on de­vel­op­ment prop­erty in the medium term. All told, some 95,000 homes could be built on the lands, it said.

Glen­veagh is be­ing cre­ated by com­bin­ing €131 mil­lion of Ir­ish prop­erty ac­cu­mu­lated by US pri­vate eq­uity firm Oak­tree in re­cent years, and the as­sets of Maynooth-based builder Bridgedale. The IPO, com­ing a lit­tle over two years after Cairn Homes be­came the first Ir­ish builder to float since the 1990s, is tak­ing place as na­tional home price in­fla­tion is run­ning at an an­nual rate of about 12 per cent as sup­ply con­tin­ues to fall well short of de­mand.

Ir­ish as­sets

In­cluded in the €5 bil­lion fig­ure are an es­ti­mated 800 sites cur­rently ei­ther State-owned or in pri­vate hands, land held by the Na­tional As­set Man­age­ment Agency (Nama) and over­seas pri­vate eq­uity firms that have snapped up Ir­ish as­sets fol­low­ing the crash.

In ad­di­tion Glen­veagh, where John Mulc­ahy, a former se­nior Nama of­fi­cial is ex­ec­u­tive chair­man, es­ti­mates there are 30 sites cur­rently in the hands of re­li­gious or­ders with an es­ti­mated po­ten­tial for 6,500 homes.

“Cur­rently, the com­pe­ti­tion in Ire­land, es­pe­cially for lots and val­ues of around €10 mil­lion and over, is rel­a­tively lim­ited, with the mar­ket frag­mented and a dearth of lo­cal house­builders with eq­uity cap­i­tal or ac­cess to eq­uity cap­i­tal or other forms of fund­ing,” the doc­u­ment said.

“The group be­lieves that the eq­uity cap­i­tal it will re­ceive upon com­ple­tion of the of­fer will dif­fer­en­ti­ate it from al­most all other in­dus­try par­tic­i­pants in the greater Dublin area and will en­able it to con­tinue to as­sem­ble its land hold­ings and grow its busi­ness prof­itably.”

Cairn Homes has been a ben­e­fi­ciary of re­li­gious or­ders sell­ing prop­erty. It is cur­rently in the mid­dle of de­vel­op­ing high-end apart­ments and houses on a site bought from the Redemp­torist Or­der in Rath­gar in Dublin two years ago. It also plans to lodge a plan­ning ap­pli­ca­tion in the com­ing months on lands for­merly owned by the Chris­tian Broth­ers on Griffith Av­enue in north Dublin which it bought last year.

Help-to-buy

Mean­while, the draft prospec­tus has warned po­ten­tial in­vestors that any move by the Gov­ern­ment to row back on its help-to-buy scheme may have a “ma­te­rial ad­verse” im­pact on its busi­ness, given that half of its de­vel­op­ments will be aimed at first-time buy­ers.

Min­is­ter for Hous­ing Eoghan Mur­phy in­di­cated dur­ing the sum­mer that the scheme, which was launched in Jan­uary and al­lows first-time buy­ers build up a deposit for a new home by way of as much as a €20,000 tax re­fund, may be scrapped.

There is spec­u­la­tion that the scheme may be tweaked in next week’s bud­get, with the State pos­si­bly tak­ing eq­uity in homes in fu­ture, rather than pro­vid­ing grants.

Glen­veagh es­ti­mates it will have about 1,700 “shovel ready” units when it floats, and plans to be build­ing at least 1,000 homes a year by 2020. It aims to build 2,000 new houses and apart­ments a year “in the longer term”.

1,000 Glen­veagh plans to be build­ing at least 1,000 homes a year by 2020

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