Housebuilder Glenveagh to build 2,650 more homes than planned

Glenveagh Properties will build 2,650 more homes than it had originally expected between 2022 and 2024, the company said in a trading update on Wednesday.

The Dublin-listed housebuilder increased its target by 46 per cent from 5,750 homes to 8,400 in advance of a capital markets day in London being held for its investors. Shares in the company had risen more than 2 per cent by lunchtime.

Glenveagh said it expects the market environment to “remain favourable with significant private and institutional demand for housing”.

“The extent of the institutional demand for high quality residential product is such that the group now expects to forward fund a series of urban apartment developments,” it added.

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Davy analyst Colin Sheridan said the move to forward fund more developments will result in “revenue, profit and cash being realised in advance of delivery of the unit targets”.

Instead of completing 1,750 homes in 2022, Glenveagh now plans to complete 2,350. In 2023, the target has shifted from 2,000 to 3,050 while in 2024 the target has increased from 2,000 to 3,000.

"We have now completed our net investment in land and, with the inherent opportunities in our business and underlying strengths of our organisation, I'm confident in our ability to deliver the significant ramp-up in volumes alongside maximising sustainable returns to our shareholders," said Glenveagh's chief executive, Stephen Garvey.

Excess affordability

In its presentation to investors, Glenveagh noted that there is excess affordability evident in the Republic’s rental market. The ability to pay rents above the cost of owning a home, it said, “demonstrates the affordability in the system and the sustainable nature of current house prices”.

In Dublin, Wicklow and Cork city, it noted that the monthly percentage difference between paying a mortgage and paying rent was in excess of 50 per cent. In Meath and Kildare, the difference exceeds 74 per cent.

Glenveagh is currently active across several sites in locations such as Dublin, Cork, Limerick and Galway. The company, which had its initial public offering in 2017, is planning to build 3,000 houses a year by 2024 and has 1,100 units under construction at present. By 2024, Glenveagh says it will have delivered 12,000 homes.