Thursday 27 June 2019

Buyers locked out as 'cuckoo funds' snap up 2,800 apartments in capital

Artist's impression of the proposed redevelopment at Connolly Station, Dublin.
Artist's impression of the proposed redevelopment at Connolly Station, Dublin.
Claire Murphy

Claire Murphy

Developers are planning to build at least 2,800 build-to-rent apartments in Dublin city alone, according to an analysis of applications lodged since the beginning of the year.

Big investors have been described as 'cuckoo funds' because they pump money into developments that are not available to purchase by individuals or families.

'Build-to-rent' developments mean that owner-occupiers are essentially locked out of purchasing these properties.

These 2,834 proposed units to date, for areas in Dublin city centre, Walkinstown, Stillorgan and out as far as Santry and Dún Laoghaire, are already planned for rental investors even before ground is broken.

These proposals lodged with the four local authorities and An Bord Pleanála outline plans for apartment developments ranging from 28 units up to 697.

The listed planning applications are indications that investors are increasingly keen to tap into yields in Ireland's rental market.

Defended the funds: Finance Minister Paschal Donohoe. Photo: PA
Defended the funds: Finance Minister Paschal Donohoe. Photo: PA

There are several benefits to a developer willing to invest in build-to-rent including:

  • They are not restricted to a maximum of 12 apartments per floor, as with other apartment developments;
  • They can allow for 'significantly' reduced car parking provision;
  • There is 'flexibility' in relation to the provision of storage and private amenity space.

An Bord Pleanála received a significant number of fast-track applications and consultations of this kind.

The largest of these is a plan to construct 697 build-to-rent apartments at Connolly Station Car Park, Dublin 1.

There is also an application for 492 build-to-rent residential units on lands on the Concorde Industrial Estate, Walkinstown, and 265 on the former Dulux factory site.

One plan to build 208 apartments on a site at the Old School House, Dún Laoghaire, outlines the intention to provide communal kitchen/dining/living and library spaces at each floor level - and the provision of a lounge/games room, gym and TV/cinema room.

However, one development of 28 apartments at Long's Place, Dublin 8, has already been turned down by Dublin City Council. The council said it refused permission because "the significant proportion of single aspect north-facing apartments will result in a sub-standard form of development and is therefore contrary to Residential Quality Standards".

The plan to build 55 apartments on Templeogue Road West was also refused by the council because its overall scale, height and bulk would be "visually intrusive and overbearing". Both of these decisions may yet be appealed to An Bord Pleanála.

There are proposals to construct 142 build-to-rent properties on a site at Roselawn and Aberdour, Foxrock, and a further 78 apartments at Clonkeen Park in Dún Laoghaire.

Dún Laoghaire-Rathdown Council has yet to decide on both of these proposals.

Dublin City Council has given the green light to a proposal to construct 52 build-to-rent apartments at Poplar Row.

The Department of Housing has actively promoted build-to-rent (BTR) to "accelerate the delivery of new housing at a significantly greater scale than at present".

"The promotion of BTR development by planning authorities is therefore strongly merited through specific BTR planning and design policies and standards," it said in its report 'Sustainable Urban Housing: Design Standards for New Apartments, Guidelines for Planning Authorities'.

Earlier this month, Finance Minister Paschal Donohoe came to the defence of the activities of 'cuckoo funds', saying they were the driving force behind apartment units being granted planning permission.

Tánaiste Simon Coveney also defended the funds - but conceded the Government will consider taxing them if they continue buying up residential property in bulk.

Irish Independent

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