Saturday 22 September 2018

Glenveagh weighs build-to-rent single buyer sales options

 

'Mulcahy said that without the founder, shares the IPO would not have happened.
'Mulcahy said that without the founder, shares the IPO would not have happened. "You pay peanuts and you get monkeys," he told reporters after the AGM.' Photo: Fennell Photography 2017

Donal Buckley

Glenveagh PLC may be about to follow the example of other developers and allocate more of its housing projects to multi-unit institutional buyers.

Such a possible move was flagged at its debut AGM last Friday where two private shareholders also questioned the bonuses and share allocations for founder shareholders.

One shareholder pointed to the dangers of bonuses linked to short-term performances in a "notoriously cyclical industry". He also questioned how the remuneration committee could agree to such bonuses considering the already generous share allocations earmarked for founder directors Justin Bickle, John Mulcahy and Stephen Garvey.

Mulcahy said that without the founder, shares the IPO would not have happened.

"You pay peanuts and you get monkeys," he told reporters after the AGM.

This autumn, Glenveagh will announce whether it will sell its 90-apartment Herbert Hill development, currently under way facing Dundrum Town centre, to an institution.

Previously it had allocated the project to its homes division which focuses on selling on a per-unit basis to first-timers and others.

Only a few months ago Park Developments was tempted by Irish Life Investment Managers into selling its 262 Fernbank apartments in Dundrum, instead of selling them by the unit.

Cairn Homes's recent sale of its Hanover Quay apartment development for €101m, or an average of €800,000 each, also appears to support claims that developers can achieve better returns from build-to-rent sales in certain areas.

An analysis by Goodbody shows that Gleneveagh had allocated 8,270 of potential units in its land bank for its homes division. A further 1,850 units are earmarked for its living division which will deliver developments to public and private partners including institutional investors.

Those living units include 1,100 in Dublin's North Docklands and 800 units across three sites operated by Sigma Retail Partners in Tallaght, Gateway Retail Park, Galway and Bray Retail Park in Wicklow.

Yet another possible switch to its living division could be some, or all, of an 11.4-acre site that Glenveagh recently bought in the Cork Docklands and earmarked for its homes division. It has potential for 1,000 residential units.

However, chief operations officer Stephen Garvey said after the AGM that a site of this scale gave it options for both direct sales and the private rented sector. "We will review both options when we get down there," he added.

Sunday Indo Business

Business Newsletter

Read the leading stories from the world of Business.

Also in Business