Monday 23 September 2019

Bulk of Irish builders lack scale, says housebuilder Cairn

Michael Stanley
Michael Stanley
Ellie Donnelly

Ellie Donnelly

ONLY 20 sites currently under construction have the potential to deliver more than 100 units each, according to stock market-listed builder Cairn Homes.

The bulk of the schemes are in Dublin or the greater Dublin area, and Cairn says it is building five of the 20 sites itself.

The figures are included in research released ahead of a capital markets day with investors.

Cairn said it is difficult for building companies to leverage the benefits of scale unless they are working on multiple large-scale schemes.

"Ireland today has only two companies that are on multiple large-scale sites, and does not have an efficient, functioning home-building industry," Cairn said.

The report comes on the back of a recent Goodbody note which found that the top 20 homebuilders in Ireland only sold around 1,600 units in the first half of this year.

In the UK, the top 20 homebuilders delivered 50pc of total supply in 2017.

Dublin-listed Cairn said that only around 3,500 apartments will be delivered by the end of 2021 in Dublin's central business district, despite the large number of apartment schemes in planning or through the planning process. This, it said, was a "critical under supply" for a city that is growing at the pace of Dublin.

The speed of office construction in the capital continues to "significantly exceed" apartment construction, Cairn said.

"We estimate that just over 6,000 apartments will be built in the same period (by 2021), meaning over 68,000 employees will be forced to seek accommodation in the suburbs".

Irish Independent

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