16 Feb Time is ripe for Irish property development financing
There is so much going on in the Irish property world that it is quite difficult to know where to start. Barely two months into the year and the Irish property journals, blogs and newspapers are all brimming with a positive outlook. Irish property development financing is now a viable short and medium term investment That doesn’t mean that there are no problems in paradise, but overall Irish property is doing well. All the activity, growth projections and the Government announcements relating to infrastructure investment indicate that Ireland is the place to be at least for the next decade.
Faith in the Future
When the government puts forward its plans to make a substantial dent in the housing shortage things begin to change. This is exactly what has happened in Ireland. Towards the end of 2017 the bank of Ireland announced that it would be providing €1bn for property development in the Republic. This kind of approach fuels the optimism in the market countrywide. This is more than four times more than the €250 million that was made available in 2014. Definitely signifying a substantial shift in development confidence.
After the Tracker mortgage debacle, the bank of Ireland has continued to identify accounts that will enjoy redress. This mean that 14500 customers have now been identified as having been impacted by the problem since 2010. An additional 6000 customers having been identified for redress. This shows that there is good faith in the property industry and the banks are working hard at said redress.
The bank has now adopted a policy where proper home building strategies will be encouraged and financed. Rather than the land hoarding of the past which may have contributed to stagnation in the property development industry. With property development financing has already included the financing of over 3500 housing units and 1500 student beds. They have clearly positioned themselves to grow this area of their portfolio.
Government investment in infrastructure
The Irish government has allocated a €116bn investment in the future infrastructure including housing, health and environment. this has been planned over the next two decades. Private industry is therefore taking the cue for a surge in the market. With the knowledge that new infrastructure will be built by the government private business is now prepared to get on the bandwagon.
Dublin – roads paved with gold
Recent figures indicate that Dublin commercial rents are now as much as six times higher than they are elsewhere in the country. They are also rising and expected to reach an increase of between 5% and 6% during 2018. Prime industrial rents are expected to rise by as much as 7% across the Capital. During 2017 there was a record uptake of commercial property leasing especially offices, indicating an increased demand. The domino effect that can be expected from this is a kneejerk reaction. Coming from industry to prevent a shortage and any related crisis this may precipitate.
The jury is till out on whether office space will continue to be scooped out, or whether vacancies will increase. Property professionals don’t agree on the details. Quality office accommodation is expected to increase in demand even if overall occupation decreases.
What this means for Irish property development financing
The ongoing growth in the Irish property market has been fuelled by government investment. This is an indicator that development opportunities will abound over the next few years. It can be expected to continue almost certainly for the next decade. Catapulted by the governments commitment to invest, Irish property development financing is likely to become a catalyst for the privately funded market.
Access to investing in the Irish property development market does not need to be difficult. Sometimes gaining access as a UK investor, hurdles can be experienced. It doesn’t really have to be once the property development financing has been arranged. This is usually sourced and managed by an experienced, resourceful and reputable broker or financial advisor. Belgravia Property Finance have an excellent network of both investors and Financiers offer private finding. Whether you are looking for a mezzanine loan, Irish property development financing or Irish bridging loans, Belgravia are the people to speak to.