250 new social homes to be built nationwide by Circle VHA
A landmark €51 million investment package aims to provide 250 new social homes across the country in the next 12 months.
Circle Voluntary Housing Association (VHA) has agreed an investment package to provide social housing in a number of counties, with Cork and Dublin the first areas to see new homes delivered.
The finance package, structured by Centrus, who acted as Financial Advisor to Circle, and funded by AIB, provides the housing association with a three-part loan, over a 30-year period. It includes a revolving credit facility, a term loan and a working capital facility.
The nature of the agreed package allows Circle VHA to re-use the borrowed funds at any time over the period of the loan, providing a safeguard for ongoing speedy development of social housing.
The deal is now the largest private financing package to any approved housing body in the country, and it is hoped that the initial 250 properties are the first of many thousands to be developed in the coming years in areas such as Cork, Limerick, Waterford, Kildare, Dublin and Galway.
The first 69 of the 250 homes are ready for occupation in Dublin and Cork.
The announcement comes in the midst of increasing pressure on Housing Minister Eoghan Murphy.
There are more than 10,500 people in emergency accommodation in Ireland and the Department's own analysis of social housing waiting lists revealed that more than 68,000 people are on waiting lists around the country.
Of these, more than 18,000 have been on waiting lists for more than seven years.
The Department also analysed its social housing delivery. Just 35% of its targeted new builds for 2019 were completed in the first nine months of the year. Some 2,219 of a target of 6,200 social houses were built by this time.
John Hannigan, CEO Circle VHA, said the "historic agreement" will deliver homes "in a mere matter of months".
"This innovative public-private partnership approach is what is needed to solve the housing crisis and now with our 30-year agreement and our existing structures, we estimate we will be able to bring approximately 300 social houses to the market each year," he said.
"What we have achieved is a modern approach to financing that has never been accomplished in this sector before."
Jason Murphy, CEO, Centrus said: "I am confident that if developers, legal teams, financial institutions and approved housing bodies continue to foster collaboration in a similar manner, projects like this will grow and develop, allowing the provision of housing to be expedited."
