NI's Lagan Homes sets its sights on the Republic
Northern Ireland's largest home-builder, Lagan Homes, is set to tap into huge latent demand for houses in the Republic as it plans to enter the market south of the Border next year, the Irish Independent has learned.
The company, owned by Kevin Lagan and connected to the wider Lagan Group, is understood to have already held discussions with a number of parties regarding site acquisitions and operations.
It's believed that the company, which was established in 1983, will initially focus on construction in the Dublin commuter belt, where pent-up demand for homes has helped to fuel soaring prices.
The company declined to comment on specifics of its entry to the market in the Republic or confirm if talks have been held regarding site acquisitions.
"While developments are at an early stage, we see significant potential to deliver affordable and high-quality housing in the Republic of Ireland, building on our 30 years' experience and success in the North and Britain," said a spokesperson for Lagan Homes.
The developer's arrival in the Dublin market is likely to see it compete with companies such as stock market-listed Cairn Homes and Kennedy Wilson Europe for valuable sites around the capital. However, Lagan Homes focuses on building houses rather than apartments.
During the summer, Cairn Homes agreed to pay €107m to buy part of RTE's Montrose campus in Dublin. It intends to build 500 apartments on the site.
Lagan Homes is linked to both the Belfast-headquartered Lagan Group, and to Dublin-based Lagan Asphalt Group. Lagan Asphalt Group operates aggregates and asphalt plants around the country, as well as a large quarry in Cork.
Lagan Homes is expected to complete 500 homes this year between the North and Britain.
Last year, it secured planning permission for developments in both Belfast and Bangor for a combined 1,200 houses. The schemes will cost about £200m (€221m) to develop, it's understood.
The latest set of publicly-available accounts for Lagan Homes in Northern Ireland show that it made a £1.6m operating profit in the six months to the end of 2015. The Northern Ireland firm was acquired by Lagan Homes UK in 2014. Accounts for that firm, also for the six months to the end of 2015, show it made an operating profit of £2.5m in the period on turnover of £18.6m. Figures out this week showed that annualised house price inflation hit 12.7pc in Dublin as a shortage of supply continues to drive up prices.
Davy Stockbrokers estimated last week that between 35,000 and 50,000 housing units a year need to be built in Ireland up to 2021 to meet demand. Last year, just 7,500 units were completed.
This week, Kennedy Wilson Europe's chief operating officer Peter Wilson said that the group wants to add about 3,000 housing units to its current stock of 2,100 over the next three to four years. Such an expansion would make the company the country's largest private landlord.