Thursday 24 May 2018

Quintain to enter build-to-rent housing market in Ireland

An aerial view of Quintain’s €3.4bn Wembley Park development in London
An aerial view of Quintain’s €3.4bn Wembley Park development in London
An artist’s impression of Wembley Park’s retail element

Donal Buckley

Quintain, the UK property development arm of opportunity fund Lone Star, is a major new player about to enter the Irish build-to-rent (BTR) market and boost supply of residential rental accommodation. It expects that a major portion of the 1,000 new homes which it will develop at the new Adamstown district centre will be supplied for the rental market.

It has also looked at other possible build-to rent development opportunities in Dublin and hopes to engage with Nama on possible others.

While its current focus is on Dublin, its executive director of development, Jason Margrave, says Quintain may also consider other Irish cities including Belfast, Cork, Limerick and Galway at a future stage.

Already Lone Star has partnered with Joe O'Reilly's Chartered Land developing houses for sale on one section of the Adamstown Strategic Development Zone (SDZ). Lone Star acquired 238 acres at the SDZ in its acquisition of part of the Project Clear loan portfolio.

Recently Quintain announced that it will also work with Lone Star to advise on the design, planning and development of the new €200m Adamstown district centre which will be located around the railway station section of the SDZ located in West Dublin.

The district centre will also include 15,000 sq m (161,458 sq ft) of retail and childcare facilities, civic and pedestrian spaces. Mr Margrave said that it will undertake an analysis of supply and demand before deciding how much space will be devoted to retail, leisure, crèche and other facilities.

An artist’s impression of Wembley Park’s retail element
An artist’s impression of Wembley Park’s retail element

"The design and mix of uses will be aimed at providing a vibrant new urban quarter with an exciting combination of high density residential units, shops, workspaces and community hubs to Adamstown," he added.

In total, the development will see up to 85,000 sq m (914,932 sq ft) developed, with estimated construction costs amounting to around €200m.

Mr Margrave believes a key element of successful regeneration and high-density urban living - be it buying or renting - "is creating vibrant neighbourhoods people want to call home."

He cites Quintain's development of Wembley Park in London, which he describes as "one of Europe's largest and most exciting regeneration projects… and with masterplan consent to become the single largest build-to-rent site in the UK."

The €3.4bn project near Wembley stadium includes the construction of 7,500 new homes, a new seven acre park, 58,807 sq m (633,000 sq ft) of Grade A offices and 46,451 sq m (500,000 sq ft) of retail and leisure, which could provide 8,000 new jobs.

An interesting feature of the Wembley development is that one third of the homes are considered affordable rental and saleable units. Under the terms of the agreement with the local authority, some of those affordable units were sold at a discount of between 20pc and 25pc of the market price; others have their prices pegged to the London living wage; another portion are for rent at a 20pc to 25pc discount to market rents and another segment are offered to key workers such as nurses, policemen and firemen with rents pegged at average incomes, which effectively are at 70pc discounts to the open market.

About 15pc of the units are for individual sale and the vast majority of these have already been sold.

"The UK affordable definition is different to the Irish terms and we will agree with South Dublin County Council" on (social and) affordable housing for its Adamstown residents, he added.

After Lone Star bought Quintain in 2015 for about £1bn including debt, the opportunity fund provided the developer with the resources to develop build-to-rent properties.

"Lone Star unlocked our ability to develop at scale and do it quickly," Mr Margrave explained.

So in 2016 Quintain launched its own build-to-rent business, Tipi, which would provide a longer term income stream. Consequently Quintain stopped building Wembley homes for individual sales and focussed on developing the remaining 5,000 units for rental. Managed by the Tipi management company, these will enable Quintain to own, control and manage the wider estate including the commercial property elements.

Focussed on customer service, its rental offering includes high-quality managed apartments, high-speed broadband, other services and all utility bills as well as access to communal gardens and social spaces.

Quintain has also been looking at other residential investment opportunities in the Dublin market and Margrave says that it would consider some of those apartment portfolios which are for sale which also have development sites.

He declined to comment on whether the firm would bid for the 274-apartment Grange portfolio and site with potential for an additional 263 apartments in Stillorgan, which Nama is currently offering for €135m.

He also looked at The Dublin Living portfolio of 1,100 units which Marlet is expected to sell to Roundhill Capital.

Quintain is targeting large-scale projects of at least 500 apartments which are designed specifically for the build-to-rent market with facilities that are suitable for tenants and more manageable for the operator.

"We don't want to just build units but we also want to create places which see a range of activity throughout the day," he added.

Quintain is also reported to be on the first short list of six firms from which Diageo will select a partner to create a new urban centre with housing, offices, shops and businesses on 12 acres of Guinness brewery lands at St James's Gate in central Dublin.

Adamstown

Before the property crash, about a quarter of the 6,000 homes planned for Adamstown were built along with the railway station and two schools, but development ground to a halt. Then in 2016, Lone Star acquired the majority of land, amounting to 238 acres.

Since then it has worked with its local partner Chartered Land and three new housing schemes have been underway, comprising 537 new housing units.

A new Adamstown Sports Hall and Community Centre, an all-weather football pitch and a new loop road in the area have also been provided. Total committed investment in the area has exceeded €125m.

Progress has also been made on the development of Airlie Park and Tandy's Lane Park, spanning 29 acres and 20 acres respectively.

These are being funded through a €20m grant from the Government's Local Infrastructure Housing Activation Fund (LIHAF).

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