Financier Castlehaven plans to loan €100 million to developers building social housing in centres around the Republic this year.
Castlehaven aims to loan €350 million to builders for residential development in 2018 and expand from the greater Dublin area into Cork and Limerick.
Partner Will Aylmer confirmed that it will earmark €100 million of the total for social housing, a market where it has backed a number of successful projects.
“Last year we funded over 200 social homes in Dublin, Louth and Meath,” he said.
Mr Aylmer explained that developers approach Castlehaven with projects where they have planning permission and deals with housing associations.
The associations buy large numbers of homes, 20 or 30 or more at a time, from developers, which ultimately go to council tenants.
Quick sales
The quick sales mean that Castlehaven can typically recoup its money within 16-18 months, making such deals attractive to the lender.
Many of the projects it funds are a mix of private and social dwellings. It recently loaned cash to developments in Ardee in Co Louth and Donabate in Co Dublin that included both.
Mr Aylmer and his business partner, Clark McCann, established Castlehaven in 2014 with backing from PSC Eaglewood, part of Pollen Street Capital Group, a UK private equity player with investments of more than £1.2 billion.
Castlehaven is close to completing loans totalling €30 million at the moment and has proposals for a further €200 million in the pipeline. Mr Aylmer predicted that some of those would fall away, but be replaced by others
The company prefers backing developments with planning permission, which allow it to get credit approval and funds for developers quickly,
Mr Aylmer noted that while figures from Goodbody Stockbrokers showed home building in the Republic grew 77 per cent to 11,000 last year, the State is still a long way from solving the housing crisis.
Overstated builds
Goodbody’s figures were lower than official estimates that more than 19,000 houses were built in 2017.
This is based on electricity connections, which commentators, including the broker, say “significantly overstate” the level of new builds in Ireland.
Goodbody bases its numbers on homes issued with a Building Energy Rating (BER) certificate. These show that 9,513 new homes were issued with a certificate last year, while a further 1,000-1,500 were not.
More than half – 51 per cent – were in Dublin, with a further 22 per cent in surrounding counties Wicklow, Meath and Kildare.
Goodbody chief economist Dermot O’Leary warned that demand for new homes was running at about 35,000 a year.
