Council in new ‘high speed housing’ venture

Cork County Council has confirmed that it has reached agreement in principle with the Ireland Strategic Investment Fund (ISIF) to establish a joint venture company (JV) that will support the accelerated delivery of new homes – initially in Cork, on a pilot basis, and potentially across other cities and large towns in due course – through the provision of early-stage financing for enabling infrastructure.

Expected to begin operations in the first quarter 2019, the new JV will focus on providing infrastructure such as water and wastewater; roads serving new developments; footpaths and cycle paths; and public lighting early in the development process with a view to unlocking supply.

The JV, in this way, aims to remove the existing requirement for housebuilders to tie-up significant capital designing, building and financing this infrastructure as part of their wider development work. This, in turn, will free-up housebuilders to deploy more of their capital directly in housebuilding.

In addition, the JV will be able to provide shared infrastructure for neighbouring developments being undertaken by more than one developer, potentially delivering significant cost and time savings in completing these developments. This recognises that fragmented ownership of sites is a significant barrier to new development.

Cork County Council and ISIF will each provide seed capital of €1.5m to the JV for a 50% shareholding in the company. ISIF has confirmed its agreement in principle to provide initial debt facilities of up to €25m to the JV for future pipeline projects.

The JV will be a fully commercial entity which will generate its revenues from fee income generated by the infrastructure services it will provide to homebuilders.

County council chief Tim Lucey said the JV would help the council to deliver its required 55,000 new housing units in Cork by 2040.