Tuesday 15 October 2019

Mulryan: PRS must grow for housing crisis to be resolved

Developer says private rented sector 'neglected'

Ballymore MD: John Mulryan says the arrival of institutional investors is welcome, Photo: Steve Humphreys
Ballymore MD: John Mulryan says the arrival of institutional investors is welcome, Photo: Steve Humphreys
Ronald Quinlan

Ronald Quinlan

The managing director of the Ballymore Group, John Mulryan, has said the delivery of private rented sector (PRS) accommodation in Dublin will need to grow substantially to comprise up to half of the new builds in the city centre, if the needs of business and the wider economy and society are to be met.

Commenting on the growth of Dublin's PRS sector in the course of a wide-ranging interview with the Irish Independent, Mulryan described the arrival of professional institutional investors here as being "really important" both in terms of servicing the particular accommodation requirements of the city's fast-growing tech sector, and in helping to address the wider housing crisis.

He said: "Building high-quality residential accommodation for people in Dublin is really important, particularly when you look at the economy in terms of the growth of tech businesses. You naturally end up with a more mobile workforce, people who are very happy to live in rental accommodation. There's a huge lack of that [accommodation] in Dublin. Having more professional investors come into that market has been a really good thing in terms of trying to solve the housing crisis."

Asked for his response to concerns that individual home buyers were increasingly being crowded out, or forced to compete with large international investors, the Ballymore chief said that PRS would be just "part of the solution" to Dublin and Ireland's housing needs.

He said: "Home ownership is really important. It's really important that when you're creating these new places, that there is home ownership. It gives people 'buy in'. They believe in the area and they stay there for a long time. It creates communities. This [PRS] isn't 'anti home ownership'. Home ownership is the most important part of the residential sector. PRS is just a part of the sector that has been neglected for years and needs to grow now."

Ballymore made its own entrance to the PRS market in Dublin two weeks ago with the launch to the market of 268 apartments at Dublin Landings, the million square foot mixed-use development it is delivering in partnership with Oxley in the Dublin Docklands.

While the selling agent, Savills Ireland, has not set a guide price for the portfolio, its location at the centre of the capital's financial services and technology sectors suggests it will command a premium.

In terms of its potential pricing, one useful barometer was provided earlier this year with Cairn Homes's sale of 120 apartments at nearby Six Hanover Quay for €101m to a special purpose vehicle managed by Carysfort Capital. The sale price represented an average gross price of €800,000 for each of the apartments.

Were those figures to be replicated or surpassed at Dublin Landings Residential, Ballymore and Oxley could secure a sale price of at least €214m.

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