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Cairn boss attacks office-building 'imbalance'


Michael Stanley, chief executive of Cairn Homes

Michael Stanley, chief executive of Cairn Homes

Michael Stanley, chief executive of Cairn Homes

Dublin city will only see 800 new apartment units come to market over the next 18 months, according to the ceo of listed housebuilder Cairn Homes.

Michael Stanley said the imbalance between housing supply and demand is as pronounced as it was when the company went public in 2015.

"We have looked across Dublin City, and that includes Dublin 1, 2 and 4 by the way, and there is a total of 800 apartment units under construction."

"It takes about 18 months to build an apartment block, so that's all we're going to get for the next 12-18 months.

"I don't think people fully understand that imbalance, particularly in the city centre."

Stanley was speaking after Cairn published results for 2016 - its first full year of operation - showing revenue of €40.9m and operating profit before exceptional items of €3.6m.

The London-listed company said it plans to seek a primary listing on the Irish Stock Exchange this year.

"Following the substantial completion of its initial capital deployment phase, the company's focus is now firmly on continuing to scale its construction operations.

"This is a key year in this progression and the company will be building new homes on 10 sites by the end of 2017, seven of which are already active," Cairn said.

It said that with "strengthening mortgage-backed demand" it expected to sell 375-400 units this year. It aims to sell more than 850 next year and more than 1,200 in 2019. "I think we've seen an improvement in housing supply in suburban areas but city centre apartment building is still very, very challenged," Stanley told reporters yesterday.

"I believe all of the cranes bar a handful are building offices. We have an extraordinary imbalance in my view between commercial construction in the city and residential construction in the city.

"In apartments particularly, that does come back to build cost. It is much more difficult to build apartments, the costs associated with it are very high. There's a very high amount of capital needed to build underground car parking and large super-structures pre-revenue."

The company said the loosening of the Central Bank mortgage caps and the help-to-buy scheme had made a positive impact on house sales.

It said increases in rent had meant it was now more than 30pc cheaper to own a home rather than rent a similar home in Dublin.

Irish Independent