Glenveagh to spend €120m on purchase of four sites
Cantillon: Acquisition would bring builder’s homes in Cork and Dublin to total of 2,780
Chairman of Glenveagh John Mulcahy: Glenveagh will pay about €60 million for a site in Castleforbes with the capacity for 650 dwellings. Photograph: Gareth Chaney Collins
Housebuilder Glenveagh Properties announced it was buying four new sites for €120 million before its first annual general meeting, in Dublin on Friday. Assuming it all goes to plan, they will hold a total of 2,780 new homes in Cork and Dublin.
Glenveagh raised €550 million from the market in October to buy land so it can build new homes, mostly for first-time buyers. The company has not wasted time, spending €404 million since then, including the €120 million announced on Friday. It has also sold or reserved 234 homes since January, bringing it close to its stated target of 250 for this year.
The new fast-track planning system for housing will heavily influence Glenveagh’s ability to meet targets. The company’s projects exceed the threshold of 100 homes needed to qualify for this.
The courts have quashed a recent decision under the system to grant another developer, Marlet, permission for more than 500 homes in Dublin after An Bord Pleanála admitted failing to consider the EU habitats directive when weighing the application. This will have worried the industry, as fast-tracking is meant to deal with such issues before builders seek permission.
Still, it is too early to say whether or not fast-tracking will succeed. Glenveagh chief executive Justin Bickle indicated on Friday that the company is happy with how it was working.
Site prices are another issue. There is plenty of speculation on whether or not these have reached a peak. There is a comparison of sorts: in 2016, Cairn Homes paid €18 million for its Hanover Quay site, which will hold 120 apartments, that is €150,000 each.
Glenveagh will pay about €60 million for a site in Castleforbes with the capacity for 650 dwellings, or €92,000 each. It is not strictly like-for-like, as Hanover Quay, which Cairn is now selling for €101 million to Carysfort Capital, includes a restaurant and shops, but it does suggest that there is still value out there.