Developer Foxglove Finance out to deliver 350 completed homes
Property firm aims to raise €1.6m
Property investor and developer Foxglove Finance expects to fund 350 residential units over the next 12 months.
The company intends to raise money at a rate of €20m-€30m a year within the next 18 months, according to Declan de Lacy, one of Foxglove's principals.
It is shortly to embark on its second development project and is looking to raise €1.6m via a so-called mini-bond, designed to provide investors with a 10pc return.
Its first project, which had a similar structure, was designed to fund the completion of an unfinished housing estate in Courtown, Co Wexford. The second project will see unfinished units in Loughrea, Co Galway, bought, completed and sold.
Former Lisney managing director Peter Stapleton is one of Foxglove's principals alongside de Lacy, an accountant who heads up the corporate recovery practice at PKF O'Connor, Leddy & Holmes, and financial adviser Paddy Mahony.
"The target is €1.6m but we'll actually be OK if we raise €1.4m or €1.5m. We're committed at 75pc at this stage so I'm expecting that we'll be oversubscribed again ... most of the people who did the previous bond are going in again," de Lacy told the Sunday Independent.
"Loughrea is a town with a certain amount of activity in it. There's demand for units, and it's demand at a price that we can sell at and make a profit," he added. De Lacy said the Foxglove's pipeline includes potential greenfield sites as well as further unfinished developments.
"The reason we've gone [for an unfinished development] with the second one is simply because the same developer has it ready to go. But we have a pipeline of projects that we're looking at. Some of them are incomplete, others are sites with planning permission that are close to ready to break ground."
He said the business wants to scale up after the successful completion of its first project.
"We've done the proof-of-concept piece now and it's time to roll it out on a much larger scale.
"It's likely that each individual offering might be only €1m or €2m or €3m, but the intention is that we're doing one of these every one-to-two months certainly, within 12 months from now, and we're doing €20m-€30m a year of funding."
Earlier this week, the OECD raised concerns that another property bubble could be forming. Prices are rising sharply, fuelled in part by a supply shortage. Earlier this week, the Central Statistics Office said prices had risen the most in the West in the year to the end of April.
"There's things out there that are very good value, where you can buy them, finish them out and make a profit quite quickly. But equally, there's a lot of stuff getting sold at very strong prices," de Lacy said.
"What we like are things that are bought well, where you can see a clear path to profit after a defined period. The incomplete [units] works very well because we know, let's say, that there's a €500,000 spend to get to completion and we can gauge the demand almost instantly and start selling.
"So it's cash-flow positive within a couple of weeks whereas some of the other things we've looked at, you might be 12 months before you see any cash coming in.
"But we're open to everything and we've 35 or 36 projects in the pipeline and two of them are greenfield sites that are at a relatively early stage in the planning permission and we'll be bringing them to market over the next six to 12 months. We're expecting to fund 350 units over the next 12 months."
Sunday Indo Business