Ikea store parent, Ingka Investments, has committed €100 million to fund the development of more than 250 social housing units across the greater Dublin area, with at least 150 of them ready for occupation over the next three years.
Upon completion, the new homes will be leased on a long-term basis to the relevant local authority.
In a fresh departure from the practice of other institutional investors involved in the supply of social housing, the Ingka Group said it will treat the rental payments it collects as mortgage repayments. This will allow the transfer of all 150 homes to the local authorities at the end of the lease term at an estimated zero additional cost.
The Ingka Group is one of 12 groups of companies that own and operate Ikea’s retail operations under franchise agreements with Inter Ikea Systems BV. It has three business areas: Ikea Retail, Ingka Investments and Ingka Centres. The Ingka Group is a strategic partner in the Ikea franchise system, operating 392 IKEA stores in 32 countries.
Commenting on his company’s plan to deliver social housing in Dublin, Peter van der Poel, Ingka Investments managing director said: “Ingka Group is guided by the Ikea vision to create a better everyday life for the many. As a purpose-led company, our aim is to invest with impact, delivering positive returns for communities and the environment for generations to come.
“We hope this project will provide an innovative, community focused template for social housing provision in Ireland, demonstrating a new way for companies like ours to be part of the solution.”
A significant portion of the funds being put up by Ingka will be allocated to ensure the energy efficiency of the homes is of the highest standard, thereby reducing the financial cost to the occupier. A percentage of the funding will also be invested in social facilities including parks, playgrounds and community centres.
The project will be executed and delivered by Aurium Capital, specialists in sustainability-focused investment, which will be responsible for co-ordinating the construction and delivery of the homes.
The planned developments will be new-builds across the greater Dublin area and will be designated for social purposes. Each of the projects is understood to be construction-ready and will be relatively compact in scale, averaging between 50 and 70 units each.
Nimesh Kamath, partner at Aurium Capital, said:“The objective was to deliver energy efficient and affordable housing for the benefit of the local community with a lasting legacy for the public.
“This joint venture with Ingka Investments leverages Aurium’s experience in delivering real assets with a significant environmental impact to assist with the drive to net zero, whilst providing genuine social impact.”