Access all areas for billionaire landlords as lobby group led by ex-FF boss goes on turbocharge
Cuckoo fund alliance led by Pat Farrell has lobbied Government 56 times since 2019
AN INTENSIVE Government lobbying campaign on behalf of globally financed cuckoo funds is being spearheaded by former Fianna Fáil general secretary Pat Farrell.
Irish Institutional Property (IIP) has lobbied policy makers, TDs, ministers and senior civil servants no fewer than 56 times since it was established three years ago.
Mr Farrell, a former chief executive of the Irish Banking Federation, is now head of IIP, a lobby group representing powerful global funds that have become Ireland’s biggest landlords.
The chairwoman of the lobby group, Margaret Sweeney, is also the chief executive of I-Res REIT, Ireland’s largest institutional landlord with approximately 4,000 homes worth €1.5bn.
Lobbying records reveal that Mr Farrell, who is also a former Fianna Fáil senator, has repeatedly sought to have legislation changed to suit cuckoo funds.
In 2019, he made a submission to then minister of state at the Department of Housing, John Paul Phelan, in which the IIP sought changes to legislation relating to local government rates.
The following year Mr Farrell lobbied for changes to the Finance Bill in submissions to Finance Minister Paschal Donohoe and officials in his department.
The IIP has also sought to influence codes of conduct for landlords and tenants,
Sought change in legislation to suit cuckoo funds
tax policy and various housing matters.
In the first quarter of this year the IIP held direct or virtual meetings with 11 ministers, senior officials or special advisers at Government departments.
During these meetings, Mr Farrell made direct presentations to Housing Minister Darragh O’Brien, Department of Finance secretary general John Horgan, Department of Housing, Local Government and Heritage secretary general Graham Doyle, Department of Enterprise, Trade and Employment secretary general Orlaigh Quinn, and Department of Public Expenditure and Reform secretary general David Moloney.
In further lobbying this year, the IIP has also sent a report on ‘the significant tax contribution’ made by its members to Taoiseach Micheál Martin, various Government ministers, and local authority chief executives.
International ‘cuckoo’ and wealth management funds – which have been criticised for forcing families out of the housing market and contributing to soaring rents – have amassed huge property portfolios in the past eight years.
They have bought up developments using REITs (real estate investment trusts) which are generally exempt from corporation tax on income from their rents.
Other corporate structures funded by international capital, such as pension funds, joint ventures and publicly listed property firms, are also IIP members.
These include Hines Real Estate Investments – a US property giant currently funding the construction of over 3,000 homes in Dublin.
Another member is international property giant Kennedy Wilson, which has approximately 2,500 homes worth €1bn.
According to its publicly filed accounts, IIP began life with a €500,000 war chest. This was funded by membership fees from IIP members which include the largest cuckoo funds and the construction firms building their developments.
Following scrutiny of the role of cuckoo funds in Ireland’s housing sector, IIP has been keen to justify the role played by its members, its lobbying records show.
When IIP was set up in 2019, cuckoo funds and globally funded property firms were already buying over 40% of all new apartments, according to Department of Finance analysis that year.
These entities were attracted to Ireland by a chronic shortage of homes and a growing skilled workforce to drive rental demand.
But at the time the cuckoo fund industry had not yet become a focus of public controversy. That changed with the 2021 sale of Maynooth’s Mullen Park estate to Round Hill Capital. That deal – and a slew of later ones – led to calls for such sales to be banned or limited.
Today the cuckoo fund sector, which is dominated by tax-efficient REITs and other investment funds, is moving to another phase. After buying up housing stock, it is now funding and building developments. According to its own estimates, it is on track to deliver half the entire housing market in the years ahead.
Ireland has a shortage of apartments and small homes compared to other EU countries. If we were in line with EU averages we would have 800,000 apartments but we have only a quarter of that. The Government has made it a priority to bridge this gap – and cuckoo funds will finance most of it.
On track to deliver half the housing market
The National Development Plan forecasts the population will grow by a million by 2040, which will require 550,000 new houses. These will have to be built at a rate of 30,000 to 50,000 a year – the equivalent of building a new Galway city every year.
To build this – and the accompanying infrastructure required – the Government is planning to spend €165bn up to 2030.
But private funds, using international capital, are planning to dwarf that amount. According to IIP, they will spend €312bn on homes and related infrastructure over the same period.
These funds – headed by financiers and executives who typically shun publicity – will have more impact on Ireland in the coming decades than almost any other actor, including the Government.
Today the top ten funds own and rent almost 20,000 homes across the country. Over the coming decades they will own hundreds of thousands.
Critics of the situation say that instead of owning their own homes, the next generation will likely pay rent to these institutional landlords for their entire lives.