Developer to build 17% more units than expected at RTÉ site

Cairn Homes plans to build 550-600 units on Montrose site, which it acquired in 2017 for €107.5m

 

The developer which acquired land formerly belonging to RTÉ in Donnybrook has signalled its intention to build up to 17 per cent more units than originally earmarked for the site.

In a report to its investors published on Monday, homebuilder Cairn Homes said it expected to build between 550-600 units on the site, which it acquired in in 2017 for €107.5 million.

This is about 40-90 units more than it originally expected to build when it acquired the site. Building at this level would bring the acquisition costs per unit down from bout €210,784 per unit to €179,166 at the outer limit of 600 units.

Part of the site is to be called Donnybrook Gardens. Cairn said it will build 86 spacious dual-aspect two- and three-bedroom apartments and penthouses “divided among five architecturally designed buildings” here.

The RTÉ Montrose site acquired by Cairn Homes in 2017 for €107.5 million.
The RTÉ Montrose site acquired by Cairn Homes in 2017 for €107.5 million.

It is understood no planning application has yet been filed but it is almost certain to progress straight to An Bord Pleanála under strategic planning legislation which allows larger proposed developments to bypass the local authority planning process.

Cairn Homes did not immediately respond to requests for comment.

The increase in anticipated housing provision on the site - updated from an initial appraisal of 510 units at the point of acquisition - is likely to attract some local opposition.

“I think that degree of intensification would raise concerns given the scale of what is being proposed there, although it’s a big site,” said local Fine Gael councillor Paddy McCartan.

He said anxieties around the pending development was exasperated by concerns regarding the impact of the Bus Connects plan for the locality.

However, Labour councillor Dermot Lacey said more housing was required and the Montrose planning application would have to be judged on its merits.

In its report, Cairn Homes said figures show that Ireland does not have a “functioning homebuilding industry”.

Just 20 new residential developments will deliver more than 100 home sales each this year, and all are either in the capital, or the greater Dublin area, highlighting the chronic shortage in new housing supply around the State.

Five of the larger schemes, which will sell more than 100 homes apiece this year, are being developed by Cairn, with a further two developed by Gannon Homes. All of the 13 remaining 100+ developments are being developed by separate construction firms.

“It is very difficult for building companies to leverage scale benefits unless they are building on multiple large scale schemes,” the report said. With annual demand at 35,000 units, the output from Ireland’s top homebuilders equates to just 9.3 per cent, based on their current annual output of about 3,150.

But bringing supply to the market faster is being “constrained by the inability of Irish homebuilders to scale at pace” Cairn said.

Looking specifically at apartments, Cairn said that it expects just 3,500 apartments will be built in central Dublin by the end of 2021, a “critical undersupply” for a city that is growing as fast as Dublin is.

Commenting on affordability and possible buyers of Cairn Homes properties, using Revenue statistics on income, Cairn said they are about 483,000 couples in Ireland who can afford to buy a house priced between € 282,000 and €525,000, and 165,000 who can afford to buy a house priced between €303,000 and €486,000.

Assuming that a quarter of these already own their own home, Cairn says that its “addressable market” is some 265,000 couples, and 69,000 single people for its 7,200 starter homes, and some 98,00 couples, and 55,000 individuals for its more upmarket trader-up/down homes.