The Land Development Agency (LDA) has started exploring the purchase of sites for housing outside cities in a bid to encourage more regional development.
Last year, the LDA was one of the most active participants in the private land market, buying development sites with capacity for thousands of homes from landowners.
Speaking at the launch of its midyear progress update, chief executive John Coleman said it was likely the agency would spend €200 million on development land this year.
He said the LDA, which has so far focused its development activity on cities and the Greater Dublin Area, needed to branch into the areas further afield where the private market has shown little interest in building at scale.
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“There are lots of great places to live around Ireland that aren’t the cities and we have a mandate now from the Government to drive development regionally,” Coleman said.
“What that looks like to us is to select and pursue sites that are outside the city areas, of a scale of, on average, 200 homes and to bring them through the planning process with a view to getting them up and running for development.”
He said the LDA’s volume would come from large development sites in cities, such as projects in Clongriffin and Lissenhall, both Co Dublin, where thousands of homes can be delivered, but it had been looking at regional opportunities and would “have good clarity on them as the year progresses”.
“Even if they’re not financially viable from day one – so if we do our numbers now and they cost more to build than you could sell them for on the market – we’re still prepared to take those first steps on the ladder,” Coleman said.
“At least if you have sites with planning permission, you have options to make decisions. If you don’t have those, you have no options. So we’re taking those first steps, selecting those sites to drive regional development as well.”
The State’s affordable housing developer, which was set up in 2018, has a total capitalisation potential of €8.75 billion.
In the first half of this year, it acquired three new sites with capacity for more than 1,900 homes, bringing its total development pipeline up to 30,000 homes.
At present, it has more than 6,500 homes under construction on more than 20 sites. Coleman said the agency would complete 1,800 new homes this year, nearly 3,000 next year and more than 3,500 in 2028.
He said it would cost, on average, €430,000 to build each of these 8,300 homes or close to €3.5 billion in total.
The agency’s midyear review also disclosed that its total assets are now valued at more than €2.9 billion and, based on the agency’s forecast, it would spend a combined €1.5 billion on development and land acquisition in 2026.
Coleman said the agency made gross income of €25 million in the year to date. That has helped the agency to make progress on discussions with the European Investment Bank (EIB) about borrowing hundreds of millions of euro for further housing developments and servicing that debt.
Alongside debt facilities from Ireland’s pillar banks, the LDA has targeted to borrow around €1 billion.
“We had a lot of engagement over the past number of weeks with the EIB. We’re appointing financial advisers at the moment. We’re pursuing debt facilities from the EIB, which we hope to make some progress on later in the year,” he said.
“We’re also looking to put facilities in place with the pillar banks as well in relation to other funding of the LDA. So a significant level of debt capacity will be introduced to the LDA over next six to nine months.”
