Cairn Homes sells almost 300 unfinished apartments to cuckoo fund
Cairn Homes has sold 282 apartments at The Quarter in Citywest to institutional investor Urbeo for €94m.
The homes are currently under construction and will be finished late next year. Once completed, they will be rented out privately.
The build-to-rent market is becoming increasingly popular here as institutional investors, dubbed cuckoo funds, radically change Ireland's traditional housing market by buying or building entire blocks of accommodation to be rented long-term.
Cuckoo funds are so-called as they are seen as elbowing in and pushing first-time buyers out of the market.
Richard Ball, partner at Urbeo, said the group has "ambitious plans" to expand its build-to-rent portfolio through further acquisitions and forward purchase agreements with partners such as Cairn.
Urbeo is an affiliate of US investment giant Starwood Capital. Last year it formed a €1bn build-to-rent residential platform in Ireland.
Of the €1bn in funding, Ireland Strategic Investment Fund, formerly the National Pensions Reserve Fund is investing up to €60m.
Meanwhile, this is Cairn's second large private sector rental transaction following the forward sale of 120 apartments at Six Hanover Quay in Dublin city centre.
Michael Stanley, co-founder and chief executive of Cairn, said: "As Ireland's most active homebuilder, Cairn's core business is the construction of high-quality, competitively priced starter homes to meet the pent-up demand from first-time buyers."
He added the group would consider selling more homes to institutional investors, or cuckoo funds.
"In addition to this, significant demand exists from long- term institutional investors for multi-family private rental sector apartment developments and with our pipeline across our circa 4,400 unit well-located apartment sites, we will continue to actively engage with these institutional investors," he added.
Last week one of Ireland's biggest housebuilders, Glenveagh, said it plans to sell more homes to cuckoo funds, as it announced three land acquisitions in Co Meath, Co Wicklow and Dublin.
Incoming chief executive Stephen Garvey said institutional investors were needed to increase the supply of homes and "because they bring professionalism into the market".