Dáil Éireann Debate, Tuesday - 22 March 2022
245. Deputy Eoin Ó Broin asked the Minister for Finance if he will outline all investments by the NTMA-ISIF for each of the five years 2018 to 2022 in residential development; the breakdown of the location and number of units in each that are funded; and the average price to rent or buy the units provided in each local authority area. [14359/22]
Amharc ar fhreagraThe Ireland Strategic Investment Fund (ISIF) has informed me that it is a commercial investor in businesses, platforms and projects which support the delivery of new homes in Ireland. These investments are in private market commercial operations, typically featuring a significant quantum of third-party investment. As such, the activities of individual investments are commercial matters and as such it is not appropriate for me to comment on them. However, ISIF has provided me with the following information.
ISIF invests on a commercial basis in the Irish homebuilding sector to catalyse the development of starter and mid-market homes across a range of dwelling types and tenure. Its overarching objective is to increase supply and optimise the existing housing stock. The Fund achieves this by targeting financing gaps in the marketplace which are an impediment to supply, and by crowding in third party capital. Furthermore, ISIF seeks to embed resilient sources of capital in the market to help ensure a robust funding environment to support Irish homebuilding through the cycle.
In total ISIF has committed over €950m to housing related investments. These investments have supported over €3.3bn of homebuilding activity, which cumulatively are expected to deliver over 15,000 new homes by 2025.
ISIF has directly supported platforms in the areas of development finance for homebuilding, on-site infrastructure finance and build to rent. These investments have contributed significantly to increasing the availability and robustness of funding for Irish homebuilding.
In 2016 ISIF funded the establishment of Activate Capital, a new lender in the Irish market focused on the provision of construction finance to Irish homebuilders at a time when this market was highly constrained. Reflecting the success of this investment and an on-going need in the market, in 2020, ISIF rolled over its initial investment in Activate to enable it to continue to support homebuilding nationwide. Activate reports that since inception it has funded construction on 62 sites, predominantly focused on mass market homes. All sites funded to date have the capacity to deliver 15,000 new homes.
ISIF has also invested to support the development of new homes by small and mid-sized developers nationally through Pearl Residential Equity Fund which is targeting the delivery of 2,000 new homes.
ISIF has been active in the provision of infrastructure funding which can unlock landbanks and accelerate the delivery of new homes. In Cherrywood Co. Dublin, ISIF invested in the up-front provision of infrastructure such as roads, water, parks to unlock the site which is now in production and will result in the construction of over 4,000 new homes. ISIF has now supported the roll out of this model more broadly, through a platform called Housing Infrastructure Services Company (“HISCo”).
In the period 2017-2019, ISIF sought to support new apartment construction and rental supply at a time when supply was constrained. The largest commitment in this segment was €140m made to Irish Life Residential Fund, an evergreen fund focused on forward purchasing and forward funding of new apartments for rent. This means that ISIF’s investment in this segment is entirely focused on new construction.
In total, this segment represents c.25% of ISIF’s total investment in Irish homebuilding and has stimulated the development of over 2,800 new homes for rent in the greater Dublin area through investments with Irish Life, Avestus, Niche and Urbeo. More recently, in 2021 ISIF invested €25m with Harrison Street with the objective of supporting the development of new Purpose-Built Student Accommodation in Ireland.
The implementation of the Pandemic Stabilisation and Recovery Fund in 2020/2021 resulted in a reduction of investment in new homebuilding opportunities. However, ISIF has a strong pipeline of new opportunities in this area and continues to be focused on investing in opportunities which provide risk capital and infrastructure solutions to Irish homebuilders.
