New lending partnership to fund two south Dublin housing developments

Castlehaven Finance and Avenue Capital will loan developer Michael Moran €20 million to fund home building on two high-profile sites in what is the lenders' first deal as a partnership.

New York-based Avenue Capital bought a stake in Castlehaven last month and pledged to loan up to €2 billion to home and commercial building projects in the Republic over the next four years.

Castlehaven confirmed on Wednesday that it had agreed to loan €20 million to Michael Moran of Seabren Developments and the Red Cow Hotel to build 71 new homes across two sites in the high-end Dublin neighbourhoods of Blackrock and Ranelagh.

The deal includes Seabren's purchase of a site owned by builder, Marlet, in Blackrock with planning permission for 51 homes, and the construction of 20 houses on a plot at Dunville Close, off Annesley Park, close to Ranelagh village.

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Seabren paid €8.7 million for the Ranelagh property last year. The company intends building nine three-bedroom homes and 11 four-bedroom houses on the 1.2-acre site.

The Blackrock property that the developer is buying from Marlet is on Newton Avenue and has planning permission for 42 apartments and nine three-bedroom houses.

The Seabren deal is the first that the pair have done since Castlehaven joined forces with Avenue late last month.

The New York-based investor bought out Pollen Street, the Irish company’s previous backer, for more than €250 million, giving the US firm both a stake in the Dublin-based lender and ownership of loans already advanced to builders.

When the deal was announced, it emerged that Avenue intended lending €500 million annually for the next four years through Castlehaven to developers for the construction of new homes, shops, offices and hotels.

Castlehaven also confirmed yesterday that the alliance would earmark €200 million every year from the total for development in Cork, Limerick and Galway, centres where there is demand for homes and offices.

The lender's Cork-based business development manager, John Fitzgerald, welcomed the news. "We're thrilled that this partnership now allows our clients to take advantage of commercial development opportunities, as well as residential."

First deal

Commenting on the Seabren deal, Castlehaven partner, Will Aylmer, said the firm was “delighted” to close its first deal with its new backer, Avenue. “Michael Moran is an existing client and we’re confident he will deliver an excellent product,” he added.

Mr Moran noted the deal moved quickly. “This is our second transaction with their team,” he said.

Castlehaven is on track to lend more than €300 million this year to fund residential and commercial building. The firm recently agreed to finance the construction of 74 new homes that developer Patrick Durkan's DRES is building in Delgany, Co Wicklow.

Since 2014, Castlehaven, run by Mr Aylmer and Clark McCann, says it has loaned €603 million for property development, much of it used to build new homes and social and affordable housing.

Under its deal with Avenue, Castlehaven will find the builders and the projects while the US company will put up the cash. The Irish firm will be responsible for managing the loans and dealing with clients.

Avenue manages $10.3 billion (€9.4 billion) for its clients. It specialises in property lending and “distressed debt”, which is where borrowers face difficulties in repaying their liabilities, along with other businesses.