DUBLIN Dec 7 Ireland’s Cairn Residences and U.S. fund Lone Star struck a deal on Monday to acquire 20 percent of the land available for residential development in Dublin, amid a serious shortage of housing in Europe’s quickest increasing economy.
Cairn, which in June became the first Irish housebuilder to float considering that a 2008 house market place crash, will take a 75 percent share in the portfolio of land.
The pair bought the land from Royal Bank of Scotland’s Ulster Bank for 360 million pounds ($ 542 million).
That represented a 78 % discount to the par value of 1.63 billion pounds for RBS and is the final portfolio to be sold from its “poor bank” of Irish assets following it lost billion of pounds in the property meltdown.
Cairn mentioned its share in the 1,700 acres of development land, which also consists of some websites outdoors Dublin, would permit it to create over 14,000 new residences more than the coming years, with an expected net development value in excess of two billion euros.
Although Ireland was left with a surplus of homes after the 2008 home crash that cut values in half, the wrong stock was built in the wrong locations, leaving property scarce in cities such as Dublin even though out-of-town housing estates lie empty.
Given that then, Ireland has failed to construct even half the 25,000 residences a year analysts say are needed to maintain up with demand among a population that is also the fastest growing in the EU.
“This is a extremely good deal for Cairn and its partner on the deal, Lone Star, is also very familiar with Irish house assets, getting been involved in deals totalling numerous billions of euro here in recent years,” stated John Cronin, analyst at Investec Ireland.
Cairn shares had been 1.five percent larger at 1.17 euros at 0920 GMT.
($ 1 = .6636 pounds) (Reporting by Padraic Halpin and Steve Slater in London Editing by Mark Potter)