Former AIB finance executive joins house-builder plotting IPO
Myles O’Grady hired to beef up management team of new company DRes Properties
Two home-builders have floated on the Irish Stock Exchange since the middle of 2015, Cairn Homes and Glenveagh Properties
Former senior AIB finance executive Myles O’Grady has been hired to beef up the management team of a house-builder being lined up for a €300 million-plus initial public offering (IPO).
Mr O’Grady has become chief financial officer of the new company called DRes Properties, which has been set up by US private equity giant Lone Star and Patrick Durkan, managing director of Durkan Residential.
The appointment fills a key role at DRes as it lays the ground for a possible flotation as early as the fourth quarter of this year given Mr O’Grady’s heavy involvement in Europe’s largest IPO last year, in which the State raised €3.4 billion by selling a 28.8 per cent stake in AIB.
A spokesman for DRes, which has retained US investment bank JP Morgan and Davy in Dublin to advise on a transaction, declined to comment.
Dallas-based Lone Star, founded by billionaire John Grayken who renounced his US citizenship in 1999 to become an Irish citizen for tax purposes, has been among the most active buyers of Irish property loans and assets since the property crash.
The firm has built up a land bank of about 600 acres in Dublin, and plans to roll two prime Co Dublin sites – in Adamstown, near Lucan, and Portmarnock – into DRes. The two sites have the combined capacity to deliver more than 5,000 homes.
Two other home-builders have floated on the Irish Stock Exchange since the middle of 2015, Cairn Homes and Glenveagh Properties. They have seen their shares fall in recent months even as both unveiled solid trading updates last week as demand for new homes runs well ahead of supply.
Analysts at Davy said on Wednesday that the share price weakness in both companies had been overdone, and presented a buying opportunity for investors.
“The fundamentals underpinning the Irish housing market remain heavily stacked in favour of the two Irish-focused home-builders,” Davy said. “We believe that concerns around build cost inflation have been overplayed for the plcs, which have outperformed the wider industry on costs.”
While the latest figures from the Central Statistics Office show that labour costs in the construction industry grew by 5.4 per cent year-on-year in the second quarter, Cairn said its build cost inflation was 2.9 per cent in the first half, while Glenveagh outlined that it was experiencing about 4 per cent cost increases.