Irish housebuilder Cairn Homes has secured a €50 million two-year loan from Activate Capital, a Dublin-based residential development lender.
The loan will be used to finance the purchase of 8.64 acres of land known as the ‘Montrose’ site in the Donnybrook district of the Irish capital.
In early June, Cairn bought the former television studios site for €107.5 million from Irish broadcaster RTÉ, with plans to seek permission to build 500 apartments and nine houses.
The new facility, with a loan-to-value ratio of 46.73 percent, carries “competitive” pricing in the context of site acquisition financing in the Irish market, a spokesperson with Cairn Homes said.
The loan is solely secured on the RTÉ Montrose site and sits outside of the company’s €200 million senior debt security package provided by Allied Irish Banks (AIB) and Ulster Bank, the Irish arm of Royal Bank of Scotland, in March last year.
“We are very pleased to welcome Activate Capital as a new and additional funding partner for our business” Michael Stanley, chief executive of Cairn Homes, said.
“This new facility, on competitive terms, is ring-fenced on the RTÉ Montrose site which reflects the quality of the asset being acquired. It represents an evolution of our funding strategy,” he added.
In June 2015, Cairn Homes became the first Irish housebuilder to list on the London Stock Exchange for around 20 years. The firm raised €385 million through an IPO, giving it a market cap of almost €430 million.
Following its debut on the LSE, the Irish housebuilder partnered with Lone Star in December 2015 to buy a portfolio of real estate loans from Ulster Bank.
The Project Clear portfolio contained €2 billion of debt secured by residential development land in and around Dublin. The book was sold for €503 million, of which Cairn contributed €378 million for its share of 75 percent of the portfolio.
Cairn Homes said at the time that it planned to develop more than 14,000 new homes on the sites with an expected net development value of more than €2 billion.