Tuesday, 19 July 2016
Department of Finance
199. To ask the Minister for Finance if funding is being provided for any scheme by his Department or agencies under the aegis of his Department to assist developers buy land to enable them to build houses in view of the housing crisis; and if he will make a statement on the matter. [22565/16]
In line with its statutory mandate, the Ireland Strategic Investment Fund (ISIF) is examining opportunities to make investments on a commercial basis that have the potential to support increased housing output.
The Fund is involved in a number of important initiatives in this area including its investments in: (i) Activate Capital, which is described further below; (ii) Ardstone Residential Partnership, which is a residential equity investment fund that is seeking to develop and deliver residential units to the market over the short- to medium-term and which has already commenced development on sites with a prospective total number of houses of around 1,200; and (iii) the Wilbur Ross Cardinal Commercial Real Estate Mezzanine Debt Fund, which has funded a number of residential developments in recent months.
Activate Capital is an innovative non-bank financing platform that has been established by ISIF and global investment group KKR to invest on a commercial basis in residential development projects in Ireland to help address the current supply shortages in the main urban centres, in particular, new residential development in Dublin, the greater Dublin area, Cork, Limerick and Galway which have been identified as the areas of greatest demand. Activate can provide up to 90% of project funding and will provide funding for both the acquisition of land and to bring projects through the planning process. Its product is flexible as to term and repayment schedules, thereby enabling alignment with the cashflows of any particular development opportunity. To date, Activate has provided finance in respect of around 800 residential units and has a promising pipeline of further opportunities.
In addition, ISIF is currently exploring supporting the delivery of housing-related enabling infrastructure in large scale priority development areas. This is in order to kick start the development process, provided such financing can be done on the basis of appropriate risk and commercial return for the risks taken. Proposals will be assessed on a project by project basis. ISIF's flexible approach to funding and ability to look at potential longer timeframes means it can play a role that is not suited to more traditional debt providers or developer equity. Such finance for housing infrastructure would unblock large development sites to enable individual developers to proceed with building houses on individual landbanks and sites owned by them within the larger scale priority development areas.