Ireland's newly-formed Reits and PLC developers have billions of euro of other people's money at their disposal, and they intend to use it. In the second part of our series, our commercial property editor profiles the new developers
Established in 2014 by former Stanley Holdings chief, Michael Stanley, and Scottish accountant, Alan McIntosh, and chaired by former KBC Bank Ireland boss, John Reynolds, Cairn Homes became the first listed Irish homebuilder in almost 20 years when it floated on the London Stock Exchange in 2015.
With new housing in short supply, the investors piled in to Cairn's shares, 400 million of which were offered to the market at €1 apiece. The company's market capitalisation swelled to just over €429m following the IPO. While Cairn had sufficient land to develop just over 1,400 new homes at the time of its flotation, that capacity swelled beyond all recognition within months after the company paid €378m to secure the part-acquisition of Ulster Bank's €1.75bn par-value 'Project Clear' portfolio in December 2015.
The deal saw Cairn take ownership of enough lands in Dublin, Kildare, Meath and Wicklow to deliver over 14,000 residential units.
Cairn is currently marketing the remainder of its 198-unit apartment scheme at Marianella on Orwell Road in Rathgar, Dublin 6; 128 of the units had been sold prior to the development's public launch. Cairn is in the process of selling the second phase of houses at Parkside in Balgriffin and the last of the new homes it has built at Albany in Killiney.
Outside the capital, the company is selling new homes at several schemes including Churchfields in Ashbourne, Co Meath and Elsmore in Naas, Co Kildare.
Earlier this year, Cairn Homes hit the headlines with its acquisition for €107.4m of the 8.5-acre 'Project Montrose' site at RTÉ's Donnybrook headquarters.
Cairn hopes to deliver approximately 500 apartments and 20 houses on the lands, for which it paid a premium over the €90m offered by rival bidder, developer Michael O'Flynn.
Last month saw the arrival of another listed Irish homebuilder when shares in Glenveagh Properties, a company backed by US private equity giant, Oaktree, were offered to investors on the Dublin and London stock exchanges.
With no let up in the housing supply crisis, the appetite of investors for shares in Glenveagh was significant, with orders for €550m in shares received within 12 hours of the deal being offered to the market.
While Glenveagh's initial portfolio comprised property acquired by Oaktree during the crash and the assets of Kildare-based developer, Bridgedale, the company's capacity has since increased with its completion last week of a deal to acquire a portfolio consisting of 11 sites in Dublin, Wicklow, Kildare, Limerick and Cork with potential for up to 1,319 new homes.
Glenveagh, which is led by executive chairman John Mulcahy, chief executive Justin Bickle and chief operating officer Stephen Garvey, has spent some €83m to date on sites, and is aiming to build at least 1,000 homes a year by 2020.
The company plans to build 2,000 houses and apartments a year in the longer term.
Mulcahy, who served previously as head of asset management at Nama and as chairman and chief executive of Jones Lang LaSalle (JLL) in Ireland prior to that, has said: "We believe there is an opportunity through publicly-quoted companies like Glenveagh to match international equity investors who are supportive of the Irish economy on the one hand with development opportunities in that economy on the other, and we have established Glenveagh to play that role."
As Ireland's first Reit (Real Estate Investment Trust), Green Reit has blazed a trail within the country's commercial real estate sector since being listed on the Irish and London stock exchanges in July 2013. Headed up by Green Property chairman and veteran property guru, Stephen Vernon, and former Gunne Commercial managing director, Pat Gunne, Green Reit timed its market entry to perfection, swooping on a veritable smorgasbord of prime office properties in Dublin's Central Business District (CBD) just as the market was beginning to emerge from the doldrums.
Among the assets in Green Reit's impressive portfolio are its flagship office development at One Molesworth Street (73pc of which has already been pre-let to Barclays Bank and aviation lessor, Goshawk), the Treasury Holdings-developed Central Park office portfolio in Leopardstown (let to Vodafone Ireland, Bank of America, Merrill Lynch, First Active and AIB), and the much-in-demand Horizon Logistics Park near Dublin Airport.
All told, Green Reit's portfolio carried a value of €1.38bn according to its latest annual report. Hibernia reit Just over five months after the flotation of Green Reit, Kevin Nowlan, a former senior portfolio manager at Nama and veteran of Anglo Irish Bank, Treasury Holdings and his father's firm, WK Nowlan Real Estate Advisors, took Hibernia Reit public, raising €365m in an IPO on the Irish Stock Exchange.
Since then, the company has focused its investment strategy on commercial real estate in Dublin's booming docklands and elsewhere within its Central Business District.
The value of its portfolio grew by 5.2pc in the six months to the end of September, to €1.27bn. In the last three years alone, the company has spent in the region of €200m on the development of new office space, with much of that investment dedicated to the Windmill Quarter at Hanover Street.
Hibernia Reit opened the first building at the scheme last August, and has signed up Core Media, US software developer Informatica and UK law firm, Pinsent Mason as tenants there. Included in the company's other main assets are 1SJRQ, currently under construction at Sir John Rogerson's Quay, One and Two Docklands Central on Guild Street, New Century House on Mayor Street and the former regional headquarters of An Garda Síochána at Harcourt Square.
Where Green Reit and Hibernia Reit paved the way for real estate investment trusts in Ireland, and very quickly split the majority of Dublin's prime commercial property spoils between them, arguably the biggest beast of the Reits chose to target the country's residential rental sector instead.
Having run the rule over Ireland's economic fundamentals, Canadian institutional landlord CapReit decided the time was right in 2014 to enter a market which, up to then, had been largely dominated by a combination of small and 'accidental' landlords.
In April 2014, Ires Reit was launched on the Irish Stock Exchange in a €200m initial public offering, with a stated objective to "acquire, hold and manage investments primarily focused on multi-unit residential real estate… for third party rental".
Since then the company, the reins of which its first CEO David Ehrlich handed over to Margaret Sweeney on November 1, has grown to become Ireland's largest private residential landlord with 2,450 apartments spread across 20 Dublin developments. Included in the company's portfolio are 225 units at Beacon South Quarter in Sandyford, 442 units at Tallaght Cross West, 235 units at Charlestown in Finglas, and 201 units at Elmpark Green on the Merrion Road. Ires Reit has enjoyed huge success since its establishment.
Indeed in its latest interim report published in August, the company revealed that its profitability had grown by 25pc to €33.3m in the six-month period to the end of June as the amount of rent collected from tenants increased along with the value of its properties.
Only last week, the firm signalled its intention to widen its interests to incorporate the three and four-bedroom houses that traditionally have formed the bedrock of Ireland's residential property market. In a statement to the stock exchange, the company announced its purchase for €7m of a 4.5-acre site with planning permission for 99 new homes at Hansfield Wood in Clonsilla, west Dublin.
Due for delivery on a phased basis from next month onwards, the Ires development is part of the wider Hansfield scheme which is being built by Garlandbrook Ltd and contractor Newline Homes Ltd. Ires Reit's offering will comprise of two four-bedroom houses, 71 three-bedroom houses, eight two-bedroom apartments, 12 three-bedroom duplexes and six two-bedroom duplexes.
Established in 1967, Iput is Ireland's oldest and largest unlisted property fund. With some €2.23bn of prime commercial real estate on its books, the company which is headed up by chief executive Niall Gaffney and chaired by Nama's former head of asset management John Mulcahy, very much came to the fore in the public mind as the country, and Dublin particularly, rebounded in the wake of the financial crisis. Since 2012, the company has invested some €1.2bn in property, primarily in Dublin's Central Business District (CBD).
Today, Iput's portfolio of 95 properties includes major assets such as 1 Grand Canal Square, the former passport office on Molesworth Street (now being redeveloped as 10 Molesworth Street), 25-28 North Wall Quay and 7 Hanover Quay.
Last month, the fund announced that it had pre-let No 10 Molesworth Street in its entirety to AIB. While the building, which is due for completion in the first quarter of 2018 extends to 115,000 square feet, it represents just a fraction of the lettings agreed by Iput in 2017.
All told, the fund has secured tenants for over a half a million square feet of property this year. The latest deal, the detail of which has yet to be confirmed formally by Iput itself, saw US tech giant LinkedIn sign a pre-letting deal for 130,000 sq ft of office space at One Wilton, a 150,000 sq ft building which is set to be developed by Iput on the site of Fitzwilton House at Wilton Terrace in Dublin.
Iput is strongly supported by a number of major long-term investors including Allianz Real Estate, Aviva Investors, ESB Pension Fund, Eircom Pension Fund, Guinness Pension Nominees, the Irish Airline Staff Pension Fund, CIE Pension Schemes and Guinness Pension Nominees.
Established in 2011 as the Irish arm of the US real estate giant of the same name, Hines Ireland has grown its operations exponentially over the past six years to the point where it has a property portfolio valued at over €2.2bn.
Headed up by managing director, Brian Moran, the company's best known commercial property is the former Dame Street headquarters of the Central Bank, the purchase of which it completed in partnership with the Hong Kong-based Peterson Group for €67m in January of this year. Hines intends to redevelop the former bank building as the Central Plaza, a 12,500 square metre mixed-use scheme comprising offices, retail and restaurants. Outside the city centre, Hines has started preparing to develop a new town centre at Cherrywood. While the south Dublin site will ultimately comprise some 8,000 homes, the first phase of the development will consist of 1,269 Build-to-Rent (BTR) apartments, as well as shops, bars, restaurants and leisure facilities.
The existing 53,000 sq m Cherrywood Business Park, which Hines also owns, is set to grow as part of the overall development of the lands. Currently the second-largest business campus in Dublin, it already has the zoning capacity to grow to three times its existing size.
While the Los Angeles-headquartered real estate company entered the Irish market in 2011 with the brokering of a deal to buy the Bank of Ireland's property business, its first acquisition here came in 2012.
Acting in partnership with Fairfax Financial, Kennedy Wilson's Irish arm bought the Alliance Building, a 210-unit apartment development located next to Google's European headquarters on Barrow Street for €40m. It was to be the first of a succession of smart moves by Kennedy Wilson's Irish head of operations and chief operating officer for Europe, Peter Collins, and his team.
Since then, the company has expanded its reach in Dublin exponentially to include an array of prime commercial and residential real estate.
Among Kennedy Wilson's best-known assets are the iconic Shelbourne Hotel, the four-star Portmarnock Hotel, Stillorgan shopping centre, and the Chase Building in Sandyford.
The company's name came to the fore in the aftermath of the UK's decision to vote in favour of Brexit when the On the residential front, the company is currently in the process of delivering Ireland's largest residential rental scheme, with 845 homes planned for the former military barracks at Clancy Quay at Islandbridge in Dublin. Speaking at the recent launch of Clancy Quay's second phase of 163 houses and apartments, Kennedy Wilson's Peter Collins said the company wanted to more than double the number of residential units it has available to let in Ireland to about 5,000 within the next four years.
Kennedy Wilson currently has 2,100 units either built or subject to planning permission here. Marlet Property When Pat Crean told the While few people might have paid attention to what he had to say back then, they might be more inclined to now, given Crean's new position as the chief executive of the Marlet Property Group.
Currently, the company is in the final stage of negotiating a €450m forward-funding deal with London-based Round Hill Capital for the 'Dublin Living' scheme, a portfolio of 1,170 apartments across four sites at St Clare's and Mount Argus in Harold's Cross, Carriglea on the Naas road and on the former CIE lands in Cabra. The proposed transaction represents Ireland's largest-ever Private Rented Sector (PRS) public offering.