Cairn Homes still in the market for development sites

Cairn Homes chief executive Michael Stanley has told The Irish Times that the Irish housebuilder was open to acquiring more sites for residential housing here if the right opportunities arise.

“We are still in the market for the right sites at the right price,” he said.

Mr Stanley said the company, which is listed on the London stock market, has net cash of €170 million and could “trade out” €80 million to €90 million in assets that it acquired in Project Clear from Ulster Bank last December but does not intend to develop.

The first of these deals could be concluded in a “number of weeks”, Mr Stanley said.

Some 157.6 million additional shares in Cairn began trading in London yesterday following a capital raising that netted the company about €169 million in proceeds.

This brought to €661 million the amount of funding it had raised from investors since its flotation last June. It also has a debt facility of €200 million from AIB and Ulster Bank.

Working capita

l Mr Stanley said Cairn was “done for the foreseeable future” in terms of raising more capital. “We don’t see ourselves going back to shareholders [for additional funding],” he said. He put the company’s working capital needs “in the €100 million category”.

Cairn currently has about 12,000 units on its books to build out, with 92 per cent of them located in the greater Dublin area and some 75 per cent earmarked for first-time buyers.

“We are looking to scale the business over the next two to three years,” he said. This would involve getting its run rate of completions up to between 1,000 and 1,200 units a year across 10 sites from 2019 onwards, he added.

“We don’t think 1,000 units a year represents a risk,” he said. The company is currently working from three sites and expects to increase this to eight within 12 months. “We’ll be adding a site a quarter over the next few quarters.”

This will include developing an eight-acre site at Marianella in Rathgar for 199 apartments and 40 family houses, and a one-acre development Hanover Quay in Dublin’s docklands, where planning consent exists for 100 homes.

Developments

Mr Stanley said the company has achieved 65 sales at its Parkside development off the Malahide Road in north Dublin where prices range from €310,000 for a three-bed house to €385,000 for a four-bed property.

Cairn has added 20 staff to its workforce to manage its growing number of developments. It now has about 35 employees at head office, which Mr Stanley expects to rise to 60 as it ramps up its activities.

“We have six construction teams for the first six schemes,” he said. But he said sub contractors need to scale their businesses again for house building to grow to meet the demand for 25,000 new units a year.

Shares in Cairn closed up in London yesterday by 0.4 per cent at £1.16.