Glenveagh Homes has sold a forthcoming development in Blackrock, Co Dublin to German investment fund Union Investment.
The forward purchase deal for Newtown Gardens, a controversial 140-unit apartment development near the village center of the affluent suburb, is set to close in the third quarter of 2024.
Due to the nature of the deal, the one- and two-bedroom apartments will not be sold on the open market for owner-occupiers, but will be rented out by Union.
It is the Hamburg real estate investor’s second transaction in Ireland, having bought the 8th Lock development in north-west Dublin last year.
“Blackrock is considered one of the most sought-after and desirable residential addresses and benefits from proximity to public transport, proximity to Dublin city centre, amenities-rich Blackrock Village and Seapoint Beach,” says Friedrich Georg Warmbold, Head of Investment Management Residential at Union Investment.
“Due to the structural lack of high-quality rental apartments in affluent areas, we expect continued strong demand in the future.”
Glenveagh chief executive Stephen Garvey said last week the government should change planning rules to favor more gated suburban housing developments rather than residential ones.
He said housing construction is too expensive and not sufficiently supported by demand from private homebuyers or institutional investors.
Glenveagh derives the majority of its income from residential construction, according to recent interim results, but the margin on individual unit sales is higher.
So-called cuckoo funds like Union Investment have sparked protests in Ireland because they pushed out individual buyers in an extremely tight real estate market.
The funds buy entire projects before they’re even built, meaning potential owner-occupiers never get a chance to bid for the homes.
Last year the government added a 10 percent stamp duty penalty to such transactions, but Treasury Secretary Paschal Donohoe added an amendment exempting funds that leased the properties back to the local authority.
https://www.independent.ie/business/irish/glenveagh-closes-blackrock-deal-with-german-cuckoo-fund-41999661.html Glenveagh completes Blackrock deal with German cuckoo fund