Urbeo in ‘pole position’ for 282 apartments at Cairn’s Citywest scheme
Irish residential investor set to pay around €90m to secure the portfolio
An artist’s impression of the Citywest Quarter scheme which is under development
Urbeo Residential, an Irish residential investment platform backed by Starwood Capital Group and the Ireland Strategic Investment Fund, is closing in on a deal to acquire a scheme of 282 apartments being developed by Cairn Homes at Citywest in Dublin.
While talks between the parties have yet to enter into exclusivity, a source familiar with the matter said Urbeo was now in “pole position” to secure the Citywest Quarter portfolio for a figure in excess of the €90 million price quoted by joint agents Savills and Hooke & MacDonald when they brought the scheme to the market in April.
The price sought for the portfolio reflects an average price per unit of €319,950.
Cairn is expected to deliver the first of the Citywest Quarter apartment blocks in the fourth quarter of 2020, with final delivery expected by the end of the third quarter in 2021. The development separately contains 123 houses, 42 duplex units and 14 apartments which Cairn will offer for sale to individual home-buyers in the private market.
Cairn Homes’ decision to sell the Citywest Quarter portfolio to institutional investors as opposed to the traditional owner-occupier market follows on from its successful sale for €101 million in June 2018 of its Six Hanover Quay development to Carysfort Capital.
While all 120 apartments at the Dublin Docklands scheme are now being offered for rent at average rates of €3,700 per month, Urbeo will be looking to offer a more affordable option at Citywest.
Established in December 2018, Urbeo differs from its competitors in the private rented sector in that it specifically states its intention is to deliver “an element of social and supported tenancies” both in Dublin and in other major Irish cities.
The company’s CEO, Felix McKenna, highlighted the opportunity these elements of the private rented sector presented last year when he and co-founder Bill Nowlan were in the process of seeking funding for their new venture.
“We believe there is a clear gap in the market to provide a quality rental housing option to low- and middle-income households,” they said.
Seeded initially with a portfolio of three assets comprising 334 private and social residential units in Dublin, Urbeo is in the process of building a €1 billion platform of build-to-rent accommodation in the capital and in other major Irish cities.
The company’s pilot development – the 131-unit New Bancroft in Tallaght, Co Dublin – has been fully let. The scheme was acquired for €33 million in July 2017 in an investment backed by the Ireland Strategic Investment Fund, the €8 billion Government-owned fund that invests with a long-term horizon on a commercial basis. At the time of its purchase it was expected that more than 30 per cent of the apartments at the New Bancroft development would be set aside for social and affordable tenants.
Urbeo’s business model sees it partnering with builders, developers, and housing associations to deliver new rental housing projects in well-serviced locations, with good connectivity to employment centres.