Shares in homebuilder Glenveagh Properties rose today after it said it is on track to deliver 1,150 sales in 2021 with all its new homes now sold, signed or reserved.
In a trading update issued ahead of its AGM today, Glenveagh Properties said its plan to build 3,000 homes a year by 2024 is on track.
After several months of restrictions on construction activity which began in early January, full operations resumed on the group's existing construction sites from April 12.
Chief executive Stephen Garvey said Glenveagh has increased its sales output from last year by 36%.
"Our long term goal for the business is to deliver 3,000 homes by 2024 and we're making great progress to doing that," he told business news on Morning Ireland.
"We have sold the majority of our product for this year. We won't concentrate on selling any of our product for 2022 until the back end of the summer this year."
The business has also started construction on three new suburban sites which will deliver new homes from 2022.
Glenveagh said that as a result of the "catch-up" in activity levels after the full re-opening of residential construction and global commodity price increases, it is seeing inflation of about 5% on current tenders.
It said this will largely impact on deliveries from 2022.
Earlier this week, Fingal County Council voted in favour of proceeding with the proposed development of 1,200 new homes at Ballymastone, near Donabate in North County Dublin and Glenveagh was selected as the preferred bidder following a competitive public tender process.
The company gave an undertaking not to sell any of the units to corporate investors.
Mr Garvey thanked the local authority for its support. "It was great to see that the public sector and the private sector can come together to deliver much needed housing.
"This project is unique, it will be predominantly suburban housing. There will be a small number of apartments in the overall development and we just want to see the project delivered as quickly as possible so hopefully we will have diggers on the ground in the next 12 months and start delivering homes there."
The overall structure of the agreement is that Glenveagh will have to deliver set price affordable housing at €250,000 and €270,000 for 3-bedroom homes.
Mr Garvey described the deal as a great result for Fingal.
"That's extremely affordable product and that's factored into the overall deal. As part of the overall project we contribute €11m to the land acquisition but we have to deliver the affordable homes and the social homes at those set prices," he added.
In relation to corporate investors, Mr Garvey said "a very small proportion of our overall portfolio" has been sold to institutional investors in the past.
"Our predominant focus is on owner occupiers. Delivering to those is key for us. We see that's where the strongest demand is into the future for us," the CEO stated.
He said around 134 of the 200 units at the Marina Village development in Greystones had been sold to German investors, Realis.
He also referenced a development of 70 apartments on Adelaide Rd and a development in Barnhall in Co Leixlip.
Mr Garvey said recent changes to the rules around the purchase by institutions of large numbers of homes would predominantly impact the suburban market which is mostly owner-occupier.
He said the sector would "have to deal with the changes".
"We need institutional investors, particularly for big schemes, where you are doing apartment developments of two or three or four hundred units, the capital intensity of those projects require institutional investors and there is no alternative out there at this moment in time," the CEO said during a media briefing following today's AGM.
The group said it added to its development land portfolio via eight new sites, two of which are adjacent to existing sites owned by the group, for €48m. The new sites can deliver over 1,900 units.
Inclusive of recent site acquisitions and its first partnership scheme - with Final County Council - it said its landbank is now approximately 17,000.
Mr Garvey also said Government policies are starting to address the issue of supply, with the Shared Equity Scheme likely to be of big benefit to some customers.
However, he said the planning system continues to be very onerous, with a number of decisions going into judicial review.
On where house prices might go, Mr Garvey said the pandemic has held back supply and this had been coupled with tight supply in the second hand market, but he added that as the pandemic eases those pressures should also.
John Mulcahy, Glenveagh's executive chairman, has told the board of his intention to transition to a non-executive Chairman role, from January 2022.
Mr Mulcahy said he believes the company is at the appropriate stage of its evolution for his role to transition to a non-executive capacity.
He also said he will work closely with the other executive directors for the rest of the year to ensure a smooth transition of all executive duties.
Shares in the company moved higher in Dublin trade today, up 2.45%.
- additional reporting Will Goodbody
