Lone Star rolls Irish land into Quintain unit as IPO ditched

US private equity group Lone Star has abandoned a plan to roll its massive Irish residential landbank into a Dublin-listed vehicle, opting instead to use its UK property development arm to deliver more than 9,000 homes on the sites.

Quintain, the UK development business acquired by Lone Star in 2015, has set up an Irish unit to deliver the homes as well as 600,000sq ft of commercial office space on Lone Star's 460 acres of land on the outskirts of Co Dublin, the company said in a statement. The sites are in Adamstown, Clonburris, Portmarnock and Cherrywood.

Quintain is also one of the bidders that submitted an offer to take an 80 per cent stake in the former Irish Glass Bottle site ahead of an October 11th deadline set by the seller, Nama, The Irish Times has established.

Meanwhile, it is understood that Quintain will use housebuilder Durkan Residential, led by Patrick Durkan, to build on much of its landbank. Dallas-based Lone Star had originally planned to put its Irish land into a vehicle that would have been combined with Durkan Residential and floated in Dublin as DRes Properties.

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Portmarnock and Adamstown

Durkan Residential has been building for Lone Star in Portmarnock and Adamstown.

The DRes initial public offering (IPO) was put on ice late last year as global stock markets succumbed to a bout of volatility. Irish housebuilders were among the worst performers on the Iseq index in the second half of last year amid fears over easing house price inflation and rising construction costs.

Lone Star has decided in recent times to scrap the planned IPO entirely and take a longer-term view of the Irish market. About 70 per cent of the pipeline will be aimed at owner-occupiers, with the remainder expected to be sold to firms in the rental sector.

Separately, Lone Star had put Quintain, which owns one of London’s largest urban regeneration sites at Wembley Park, on the block early last year with a price tag of £2.2 billion. However, that plan was aborted 13 months ago as it failed to reach an agreement on price with any bidder.

Stagnating prices

Quintain Ireland is being launched as a 12-person team jointly led by Eddie Byrne and Michael Hynes. "In 2020, we expect to more than double the size of our team in Ireland and expand our development pipeline," said Mr Byrne.

The development comes at a time when Dublin house prices are stagnating, having soared by 95 per cent from their February 2012 lows to the end of August, according to Central Statistics Office data. Economists attribute the slowdown to Central Bank mortgage lending rules and general market nervousness amid Brexit uncertainty.

Still, the market for houses valued at below €500,000 remains robust, according to economists. More than 90 per cent of the units being planned by Quintain fit this category.

Quintain is believed to be planning to complete 500 homes next year, rising to 800 in 2021 and about 1,200 in 2022.