Publicly-quoted homebuilder Glenveagh Properties is in talks to acquire land capable of delivering more than 7,000 homes, according to documents published on Thursday tied to its move to raise €213 million of fresh cash through a share sale.
The company, which has so far used up more than €400 million out of €550 million raised in its October initial public offering (IPO), said in the newly prospectus that it is in exclusivity on sites worth €65 million which could result in 1,381 homes.
It is in active negotiations with sellers sites that could deliver 5,765 homes and worth a combined €361 million.
Glenveagh, led by chief executive Justin Bickle, currently has a land bank of about 42 sites that could result in about 10,120 units being built. The company signalled that it also currently eyeing two sites currently being sold by Nama in the greater Dublin area that have a combined estimated value of €68 million.
In addition, the company sees the potential for more than €800 million worth of further sites coming on the market over the next 12 months, with sellers including private equity firms, the National Asset Management Agency, other state entities and religious orders.
“Construction had commenced on 12 sites for Glenveagh Homes with approximately 700 units currently under construction and approximately 800 expected to be under construction by the end of 2018,” the company said in the prospectus, adding that sales activity across six sites has been “strong” so far this year, with 278 units or reserved between since January 1st.
“Land acquisition conditions remain attractive for the group given the nature of the sellers, favourable prices when purchasing sites of scale, and the opportunity to achieve gross margins in line with
Projections,” it said. The company has previously forecast that it expects to achieve “at least” a 20 per cent gross profit margin once it achieves scale.
Meanwhile, Glenveagh's main shareholder, US private equity firm Oaktree, which rolled a number of its properties into the company as part of the IPO, found buyers in the market this week for half of its stock - the equivalent of 8 per cent of the current amount of shares in circulation.
Oaktree’s stake will fall to about 6.5 per cent as a result of its shares disposal and the dilutive effect of Glenveagh’s capital raise.
