Saturday 24 February 2018

How taxpayer-backed fund gave €50m loan to buyer of RTÉ site

Stock photo
Stock photo
Ronald Quinlan

Ronald Quinlan

An investment fund backed by the taxpayer has stumped up €50m to help finance developer Cairn Homes' €107.5m acquisition of lands at RTÉ's Montrose campus.

Cairn Homes has obtained a €50m loan facility from State-backed lender Activate Capital - a company supported by the State-controlled Irish Strategic Investment Fund and global investment firm KKR. The loan is solely secured by a charge over the RTÉ site.

A spokesman for the Irish Strategic Investment Fund said: "Cairn is a publicly quoted company. Activate Capital is a commercial lender which operates stringent credit procedures.

"The Ireland Strategic Investment Fund has no involvement in Activate's lending decisions."

Asked if Cairn had approached traditional lenders such as Bank of Ireland for funding before going to Activate Capital, which would be regarded as a 'boutique' lender, the company's CEO Michael Stanley said: "No. We were aware that Activate was very comfortable with the asset. It had done some work. It is backing a number of housebuilders and is very active in the State. We were happy to do business with it."

RTÉ's Montrose campus could be in line for the development of a new office building along with a far higher number of homes than the 500 units recommended by town planners for the 8.64 acres acquired by Cairn Homes for €107.5m.

Speaking to the Irish Independent following Cairn's announcement yesterday of its agreement of a €50m loan facility with the State-backed lender, Mr Stanley said architects and planners, both Irish and international, would be invited shortly to submit proposals for the site's development.

Asked if the Montrose lands could accommodate more homes than the 500 apartments and 20 houses proposed in the development appraisal drawn up by O'Mahoney Pike Architects prior to the sale by RTÉ, the Cairn chief did not rule the scenario out.

He said: "That's going to be a question for the design team. It's not always the number of units that derives the best value, as you know. It's such a special site."

Indeed, Mr Stanley raised the prospect of the RTÉ lands accommodating a new commercial development, saying: "The interesting thing about the site is there's already an existing planning permission for a 28 metre (92ft) commercial building, which is way higher than any residential building that would be permitted.

"We'll just have to see how that works out."

He said Cairn Homes was in "no immediate hurry" to commence building on the lands for which it had paid a premium of at least €25m above the €90m plus which had been offered for the site by rival bidder, developer Michael O'Flynn.

Irish Independent

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