Cairn Homes, the Irish housebuilder, is set to spend €120 million on acquiring 11 new sites as it accelerates its housebuilding plans.
The company, which raised more than €400 million when it listed on the London Stock Exchange in June, said it is carrying out checks on the Irish locations where it plans to build up to 1,600 new homes.
The 11 new sites will be added to the nine the company purchased recently for €130 million. In its interim results, released yesterday, the company said the first nine locations could be worth €568 million when they have been fully developed.
Cairn will begin marketing its first houses at Parkside, off the Malahide Road in Dublin, in September, where average house prices are between €315,000 and €395,000. The company also plans to start selling houses at a site in Killiney in early 2016.
It said it expects a “significant number of new site acquisition opportunities” to be available over the next few months as the National Asset Management Agency (NAMA) and Ulster Bank put new land banks on the market.
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“Following on from our initial public offering, Cairn Homes has progressed the acquisition, planning and development of premium sites in the Dublin, Galway and Meath regions,” Michael Stanley, the company’s chief executive, said. “The availability of prime development lands continues to be a positive for Cairn Homes and the company is confident in can deliver quality homes in a market where there is an acute shortage of supply.”
According to Davy, the stockbroker, Cairn could be a good investment option for those looking for exposure to the housing market.
“It continues to be the best way to play the Irish housing recovery story,” Colin Sheridan, an analyst at Davy, said. “Despite some price moderation in recent months following the implementation of the Central Bank’s new mortgage rules, Cairn now sees a more sustainable property market into the future. It highlights a number of favourable regulatory changes, such as the vacant site levy, the lowering of the affordable portion of sites from 20 per cent to 10 per cent and the draft Dublin development plan changes around apartment regulations.”
Goodbody Stockbrokers said the company is a step ahead of its rivals in the housebuilding market.
“We believe a well-capitalised homebuilder, with an investment capacity of €400 million assuming about 20 per cent leverage of debt, such as Cairn Homes has a strong competitive advantage against a decimated industry,” Colm Foley, an analyst at Goodbody said.