Cairn Homes secures €50m loan for Montrose site purchase

Housebuilder Cairn Homes has agreed a €50 million loan facility secured by a charge over the site it recently bought from RTÉ at Montrose.

Activate Capital is providing the loan as a funding partner solely in relation to the RTÉ site on a two-year term.

"This new facility, on competitive terms, is ring-fenced on the RTÉ Montrose site which reflects the quality of the asset being acquired," said Cairn Homes chief executive Michael Stanley.

"It represents an evolution of our funding strategy and sits outside of our existing €200 million corporate debt facility with AIB and Ulster Bank."

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At the beginning of June it was announced that Cairn was successful with its €107.5 million bid for the Montrose site.

The Irish listed property group said it planned to seek permission to build 500 apartments and nine houses on the 8.64 acre site.

The price offered by Cairn at the time was substantially above the €75 million guided by estate agent Savills.

Cairn is one of the most active housebuilders in the Irish market. Its landbank consists of more than 12,000 sites, of which 96 per cent are either residentially zoned or have planning consent.

Founded two years ago, Cairn has since spent more than €750 million on site acquisitions, mostly aimed at first-time buyers.

In a note to investors, analysts at Davy stockbrokers wrote that they expected the company’s debt to peak at between €200 million and €220 million shortly after the Montrose site is complete. “The group’s debt level should begin to fall significantly beyond that point,” they added.