Thursday 21 September 2017

Building Activity on the increase in capital - Abbey

Abbey executive chairman Charles Gallagher
Abbey executive chairman Charles Gallagher
John Mulligan

John Mulligan

The executive chairman of home builder Abbey has said there is strong competition for development sites in Dublin and believes some of the buyers are being backed by international investors.

Speaking to the Irish Independent as Abbey Group unveiled full-year preliminary results for the year to the end of April, Charles Gallagher said that there has been an uptick in activity and signs of improving confidence in the Dublin area. Most of Abbey's activities are focused on the UK, however.

The company is building 21 homes at a development in Shankill, while it has also just signed contracts to build an additional 25 houses at a site in Rathfarnham, Co Dublin.

Estate agency Sherry FitzGerald said yesterday that Irish house prices were 3.6pc higher in the year to date, and rose 1.8pc in the second quarter of 2013, spurred by activity in Dublin.

While there were reports of mini-price bubbles for some areas of south Dublin, Mr Gallagher said it was highly unlikely in the current climate that any shortage of homes would lead to any significant wider bubble.

Credit

"The market is being driven by equity. There just isn't the credit available in the economy to make it happen. There aren't too many mortgages being given out," he added.

Abbey generated an €8.3m operating profit in its last financial year, down from €9.1m a year earlier. Including finance income, pre-tax profits slipped to €10.9m from a little more than €12m.

Revenue jumped to €98.5m from €70.3m, while the company also impaired the value of its housing assets by €3.5m.

Abbey completed 368 sales in the last financial year, nearly 20pc higher than in the previous year. Of those, 322 were in the UK, 35 in Ireland and 11 in the Czech Republic. Ireland accounted for €5.5m of revenue, the UK for €76.3m and the Czech Republic for €2.5m. Abbey's plant hire arm generated €13.4m in revenue.

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