TIDMGLV
RNS Number : 9835S
Glenveagh Properties PLC
29 June 2018
29 June 2018
Glenveagh Properties PLC
Trading statement
Glenveagh Properties PLC ("Glenveagh" or the "Group") a leading
Irish homebuilder listed on Euronext Dublin and the London Stock
Exchange is holding its AGM today at 10 a.m. at Herbert Park Hotel,
Ballsbridge, Dublin 4. This statement comments on the Group's
current trading and outlook for the financial year.
Group highlights
Glenveagh is delighted that its first year as a public company
has been marked by strong achievements and progress across all its
objectives. Glenveagh is ahead of schedule in delivering its key
IPO targets, namely acquiring land for residential building,
constructing and selling houses and apartments, and scaling its
business as a PLC.
-- Land Acquisitions
o EUR404 million of capital has now been deployed in land assets
since last October's IPO. Glenveagh is pleased to announce four
further substantial land acquisitions for Homes and Living
today:
Ø Three sites for Homes and one site for Living, with a combined
acquisition cost of EUR120 million capable of delivering 2,780
units.
o The Group's landbank is now 10,120 units, 31% of which are
shovel-ready with 97% zoned residential(1) :
Ø Homes's landbank comprises 8,270 units across 38 sites;
Ø Living's landbank comprises 1,850 units across four sites;
-- Construction
o Construction has now commenced on 12 sites for Homes with
c.700 residential units currently under construction and c.800
expected to be under construction by Homes by the end of 2018.
-- Sales
o Sales activity has been strong with 234 units signed or
reserved since 1 January, through a combination of show home
villages and marketing suites.
o The Group is currently selling from six sites, which will rise
to eight sites during 2018.
o Homes continues to evaluate its sales options for its Herbert
Hill, Dundrum site following reverse enquiries from institutional
investors seeking yielding product in a scarce environment for
quality, new build rental stock.
-- Scaling the business as a PLC
o Headcount has increased from 85 permanent employees at IPO,
148 employees at the March interims, to 204 permanent employees
today, with over 80% of recruitment in the construction, health and
safety and commercial departments.
__________
(1) As a proportion of acquisition cost.
Outlook
The Group's market backdrop remains very favourable with
significant demand for housing, particularly starter homes, clearly
evident across the Group's selling sites.
Homes remains on target to deliver 250 completed and sold units
by year-end and retains its principal focus going forward in
constructing well-built and value for money houses for the starter
home market. The speed and skill at which Homes has opened its
construction sites post IPO and use of off-site construction
methodologies, including timber frames, has also de-risked the
delivery of the Group's unit delivery targets of 725 and 1,000 in
2019 and 2020 respectively.
Land acquisition conditions remain attractive for the Group
given the nature of the sellers, favourable creation values when
purchasing sites of scale, and the ability to achieve gross margins
in line with projections. A number of significant land
opportunities are expected to be brought to market by various
parties over the summer months.
Glenveagh's Co-Founder and CEO Justin Bickle commented:
"I am delighted to report that we are ahead of schedule in
meeting each of our IPO goals. We continue to enjoy significant
structural advantages as a PLC including a strong balance sheet,
construction operations of scale, and an attractive pipeline of
residential land opportunities. Since last October when we created
Glenveagh, we have made a fast start in turning land into built
stock in a very favourable selling market. Using timber frames to
construct our houses, benefiting from a strong and growing network
of sub-contractors, and having assembled a sector-leading
management team with a culture of innovation and capital
discipline, we are well on our way to becoming a volume homebuilder
and the leading residential delivery platform in Ireland.
While we expect the current favourable market conditions to
continue for our core Homes business, in parallel through our
Living division we are seeking to deliver mixed-tenure solutions,
to address the public housing crisis, and other PRS solutions,
having regard to the structural shift to rental in Dublin and other
key cities.
We believe that the combination of our Homes and Living
divisions allow us to access both consumer and institutional demand
for modern, well-built residential product in Ireland, and help
diversify risk across the cycle. We look forward to reporting on
our further progress in the coming months."
Current market environment
The Group is experiencing favourable market conditions,
illustrated by strong progress on sales and reservations towards
its 250 unit year-end target, ahead of the autumn sales season.
Demand is most pronounced in the starter home market, which is the
Group's core focus. House price inflation and construction cost
inflation is tracking in line with Group expectations.
Central government policy initiatives encouraging building
delivery such as fast-track planning, Help to Buy, Vacant Site Levy
and changes to apartments building regulations are also a net
positive for the Group.
Land acquisition
Announcement of further substantial land acquisitions
The Group is announcing four further substantial land
acquisitions for Homes and Living today, with a combined
acquisition cost of EUR120 million capable of delivering 2,780
units, assuming planning is obtained.
Homes
1. Cork's Docklands
Homes has exchanged contracts to acquire a 4.6-hectare site in
Cork's Docklands with the potential to deliver up to 1,000
residential units. The exact purchase price is commercially
sensitive but is in excess of EUR15 million. The acquisition is
expected to complete by Q3 2018. This acquisition is Glenveagh's
first in Cork's Docklands, the city's new major urban hub and
regeneration area. The development site is located in close
proximity to Cork city centre and adjacent to a large concert and
sports venue. The Group acquired the site following a public tender
process.
2. Project Bill - GDA
Homes has also exchanged contracts to acquire a c.16.2 hectare
site of zoned residential land in the Greater Dublin Area ("GDA")
which has the potential to deliver c.400 residential units subject
to planning. The exact purchase price is commercially sensitive but
is in excess of EUR20m. The acquisition is expected to complete in
Q3 2018. This acquisition further strengthens Glenveagh's focus on
delivering starter homes in the GDA in proximity to transportation
nodes. The Group acquired the site off-market.
3. Project Hector - GDA
Homes has signed an unconditional legal contract to acquire a
large landbank in the GDA which has the potential to deliver up to
700 residential units subject to planning. The exact purchase price
is commercially sensitive but is in excess of EUR9m. The
acquisition is expected to complete in Q3 2018. This acquisition
further strengthens Glenveagh's focus on delivering starter homes
in the GDA.
Living
4. Castleforbes, North Docklands, Dublin
Living has exchanged contracts on the underlying loan package
secured against Castleforbes Business Park ("Castleforbes") a 2.44
hectare site in Dublin's North Docklands. Living intends to take
control of the Castleforbes site, having also acquired 100% of the
shares in the site's associated management company, through a
consensual 'loan to own' transaction. Once controlled, Castleforbes
has the potential to deliver more than 650 units, subject to
planning. The exact purchase price is commercially sensitive but is
in the region of EUR60 million.
This transaction is Glenveagh's second major acquisition in
Dublin's North Docklands. Castleforbes is adjacent to the East Road
site which the Group acquired from the same vendor in January 2018
and provides Living with optionality to deliver a c.1,100
apartments campus in Dublin's North Docks, which is one of the
City's major urban hubs and regeneration areas. The site is in
proximity to major employers such as Facebook, and enjoys
favourable transportation links to Dublin airport, and via rail and
road to the rest of the city. Again the secured loan and associated
management company were acquired by the Group off-market.
Since its IPO in mid-October 2017, the Group has evaluated over
EUR1.6 billion of land opportunities out of an addressable land
market of c. EUR5 billion as estimated by the Group at IPO. Of that
EUR1.6 billion, the Group has deployed funds against c.EUR400
million, or one quarter, of the land opportunities considered. When
determining the attractiveness of acquisition sites, the Group's
principal evaluation criteria is (i) location, (ii) attractive
margins, (iii) availability of infrastructure and (iv) early unit
delivery in the years 2018 to 2020.
Of the residential land acquired since IPO, c. 80% has been
secured off-market, which is testament to Glenveagh's proven
sourcing and underwriting model and deep sector relationships.
Going forward, Glenveagh's land opportunity continues to be
significant with additional land now being tendered on market,
while off-market transactions remain in strong supply.
Glenveagh Living (Living)
The Group is also pleased to announce today significant progress
for its Living business, which comprises Partnerships and delivery
of new homes designed for PRS.
Partnerships
Capitalising on its first mover advantage in this vertical, the
Partnerships business focuses on mixed-tenure developments and
joint ventures, having regard to the public sector housing crisis
in Ireland and relationships driven nature of the broader property
market locally.
Living continues to promote the benefits of adopting a
mixed-tenure approach to housing delivery solutions, particularly
where the land is owned by a local authority or other State agency.
The Group believes mixed-tenure solutions will be increasingly
utilised by these State bodies over time, following appropriate
procurement processes.
Delivery of New Homes for PRS
Following the acquisition of Castleforbes referred to above,
Living's PRS development portfolio now comprises 1,850 units, which
is one of the largest in the Irish residential market. The scale of
Living's PRS portfolio, wholly assembled since IPO, and the
significant pipeline of similar opportunities open to Living to
deliver rental communities of scale means that the Group is
presently evaluating financing options for Living's PRS portfolio
given institutional appetite for private rental units in Ireland's
key cities.
For further information please contact:
Investors: Media:
Glenveagh Properties Gordon MRM
PLC
Ray Gordon 087 241 7373
Justin Bickle (CEO)
David Clerkin 087 830
Michael Rice (CFO) 1779
investors@glenveagh.ie glenveagh@gordonmrm.ie
-------------------------
Note to Editors
Glenveagh Properties PLC develops and builds sustainable
starter, mid-size and executive homes (both houses and apartments)
in Ireland. The Group comprises two divisions, Glenveagh Homes
(Homes) and Glenveagh Living (Living). We strive to found, create
and contribute to communities by consistently delivering
exceptional homes and value for money, via our two operating
divisions.
Glenveagh Homes offers a platform that combines conveniently
located residential development sites in Ireland (mainly in the
Greater Dublin Area), with an award-winning developer and a
sector-leading senior management team. In addition to developing
our own land, through its Partnerships arm, Glenveagh Living works
with strategic holders of development land in the public sector to
facilitate the development of mixed-tenure communities and through
its PRS arm provides private rental communities for institutional
investors. www.glenveagh.ie
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END
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