Donal Buckley
Fast-track planning applications have been submitted for more than 4,000 new homes in Co Kildare since the Strategic Housing Development (SHD) fast-track planning system was introduced in 2017 and apartments accounted for at least 1,231 units, or 30pc of the total.
It will be interesting to see how these are sold. Will the developers go aim to generate sales as quickly as possible and sell the entire entity to institutional investors.
It will also test the appetite among institutional investors for developments where more than 70pc of the dwellings are houses rather than apartments.
One local agent acknowledges that while institutions prefer to buy complete projects with complete control over the block management, some developers aim to sell the apartment section of their developments to institutions and sell the houses to individual buyers, including first-timers.
This strategy will enable developers to achieve fast-track planning and will also enable them to reduce the risk of having to wait for months, if not longer, for individuals to buy vacant units and while bank interest bills are mounting.
However, not all developers are adopting this strategy as some commentators say there is now stronger demand for and availability of apartment mortgages than there was in the past when lending institutions shied away from them.
Joey Sheahan, head of credit at MyMortgages.ie, a broker set up in 2005, said his firm has had no difficulty obtaining mortgage approval of up to 90pc of apartment prices for first-time buyers.
“Some years back, when credit was tighter, certain banks reduced the loan-to-value available for one-bedroom apartments to as low as 75pc. And still today some banks may offer a lower loan-to-value on apartments in rural areas – of perhaps 80pc. But, in the main, most lenders are offering 90pc loans on apartments now,” he said.
One of the country’s biggest developers, Cairn Plc, is selling two-bedroom apartments at its Elsmore development in Naas, Co Kildare, for which joint agents, Coonan and Hooke & MacDonald, are quoting starting prices of €249,000. Furthermore, although not yet completed, they are already selling off the plans.
Elsmore also includes three-bedroom duplexes as well as three- and four-bedroom houses, with the three-bedroom terraced houses priced from €310,000.
Cairn also secured approval for an SHD at Mariavilla, Maynooth. It will comprise 320 houses and 106 student units with 483 bed spaces, as well as a local neighbourhood node including a creche, café, gym and a retail unit. However, it will have only 26 apartments and all of those will have only one bedroom.
A local agent says some institutions are also interested in Kildare developments, with one developer believed to be in the process of selling about 90 units in Maynooth.
It will be interesting to see how developers configure these mixed residential developments and the future management companies in order to attract both institutions to the apartments and home buyers to the houses.
There has been institutional demand for houses as well. For instance, IRES Reit purchased tranches of houses in developments in Balbriggan and Hansfield in Co Dublin, so there may well be others who will also buy these mixed residential developments in the wider commuter belt, especially in projects which are located close to train stations and motorways.
One of the largest developers in the country, Glenveagh, has shown its confidence in the Kildare market by purchasing a number of sites, including two which received SHD approval for 100 apartments and 350 houses in Barnhall, Leixlip, and another at Athgarvan Road, Kilbelin, Newbridge, with approval for 48 apartments and 283 houses.
Earlier this year, Glenveagh paid around €50m for the two sites, equating to an average of about €63,000 per unit site.
The vendor Ardstone Homes has been the most successful developer in terms of getting SHD approval for Kildare sites, with three approved to date. Its third was for 125 units in Naas, of which 28 are apartments.
It has a fourth one in the pipeline at Celbridge comprising 230 houses and 125 apartments.
An analysis of six Kildare SHDs which were granted approval shows that of the 1,912 units approved, apartments accounted for 559 of them, which indicates an average of almost three apartments to seven houses have been approved.
A local estate agent said that the An Bord Pleanála does not appear to apply a minimum number of apartments or a maximum number of houses in Kildare but it does apply a minimum density of about 14 units per acre, which can be demanding for those traditional builders who focus on houses.
One industry expert noted that to apply a blanket density of 14 homes to the acre for the whole county was unfair to these developers, especially when there is development in areas that are not close to rail and road services.
Within the approved SHDs, the ratio of apartments to houses can vary considerably. For instance, Ardstone’s Kilbelin project was granted permission where only 14pc, or 48 out of the 343 units, were apartments.
By contrast, one of the few Kildare projects to seek a high portion of apartments was Stennock’s 281-unit Newbridge development, where 60pc are apartments.
Not that a dominance of apartments ensures An Bord Pleanála approval, as the Comer Brothers recently found out.
Their application for 135 apartments on a site opposite Manor Mill shopping centre Maynooth has been the subject of negotiations with the Bord for almost two years.
The Comer brothers have had a remarkable run since they returned to investing in Ireland in the wake of the bust, with a series of property developments.
