Business Irish

Wednesday 18 October 2017

International investors pile into Glenveagh IPO

Glenveagh CEO Justin Bickle
Glenveagh CEO Justin Bickle

Gretchen Friemann

Ten institutional investors have snapped up close to half the shares on offer in freshly-listed housebuilder Glenveagh Properties.

The company - formed by a combination of Oaktree Capital's development land bank in Ireland and the assets of Maynooth-based builder Bridgedale - debuted on the Dublin and London stock exchanges yesterday.

According to sources, the register is dominated by international long-only institutional funds, alongside a number of hedge funds, with Ireland's severe housing shortage driving support for the €550m offer.

Oaktree will hold a 16.5pc stake in the company and is subject to a 180-day lock-up- period.

Glenveagh commenced trading at a market capitalisation of €617m, but within hours that valuation had surged to €717.6m following a 16pc-plus jump in the share price.

An over-allotment option to sell an additional 50 million shares will further swell the market capitalisation.

Oaktree executive and Glenveagh CEO Justin Bickle said the response to the initial public offering "exceeded all of our expectations". He predicted the housebuilder's ambitious building programme would make a very substantial contribution to help alleviate the housing problem in Ireland. "Our work on that programme begins today," he said.

Glenveagh intends to construct 1,000 new homes every year up until 2020 and predicted it can double that figure in the longer term. Like listed peer Cairn Homes, the IPO sets the stage for a slew of further equity raisings as the company taps shareholders to fund an ambitious growth strategy.

Glenveagh's success has fuelled expectations other distressed debt funds and private equity firms in possession of large land banks will pursue a similar path.

Credit Suisse and Davy, which ushered the Oaktree-backed company onto the stock exchange, will reap close to €20m in funds from the IPO

The IPO marks the first listing of a housebuilder in two years.

Investec's Ronan Dunphy, argued the market "is clearly large enough" for another player, given the current "paltry" rates of home construction.

He said the Irish market would continue to be characterised by a chronic under-supply of new housing.

Glenveagh controls a vast land bank in the greater Dublin area with a gross development value of €1.1bn. It stresses it is "shovel ready" on sites that will deliver close to 1,700 units.

Irish Independent

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