Irish construction firm to list on London Stock Exchange

Dublin (AFP) – An Irish construction company announced Wednesday it would list on the London Stock Exchange to raise funding to deliver new homes as strong demand returns to the Irish property sector.

 “There is an imbalance between the demand for and supply of housing in Ireland, particularly in Dublin and surrounding areas, driven by a lack of capital, operational capacity and legacies of the financial crisis,” Cairn Homes said in a statement.

The company will issue shares at one euro each ($1.11) and is seeking to raise 350 to 400 million euros in the share placing, in addition to a 29 million euros investment by the company’s founders.

Limited supply, particularly in Dublin, has driven up property prices after the sector collapsed and lending ceased during the 2008-2012 financial crisis.

Cairn Homes said it will focus on developing green and brownfield sites mainly in Dublin, but also in the cities of Cork and Galway, where demand is strongest.

Nationally house prices were 15.8 percent higher in April than a year ago, according to the Central Statistics Office. In Dublin, prices were 20.2 percent higher.

But at a national level, residential property prices are still 37.8 percent lower than their peak and pre-crash levels in 2007, the CSO said.

Ireland’s economy has rebounded strongly since the crash, growing at the fastest rate in Europe last year, and unemployment has fallen below 10 percent, but new mortgage-lending remains slow.

John Reynolds, Cairn Homes chairman and former chief executive officer of KBC Bank Ireland, said strong growth in the Irish economy provided a strong backdrop for the IPO.

“These strong macro-economic conditions, together with a population that is forecast to increase to 5 million by 2031, will underpin a strong demand for homes over the coming years,” he said in a statement.

The company has acquired a number of sites, conditional on the IPO, with a total gross development value of 366 million euros. Construction is already underway at two sites in Dublin.

In an attempt to regulate the market and slow rising prices, the Irish Central Bank introduced stricter new mortgage rules in February requiring a 20 percent deposit and limiting loans to 3.5 times annual income in most cases.

The company has also identified a number of potential developments to build approximately 3,880 housing units with an estimated gross value of 1.8 billion euros.

Just over 11,000 housing units were completed last year in Ireland despite the Economic and Social Research Institute figures showing 25,000 new units are needed annually.

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