GROWING demand for corporate finance for residential, hotel and office developments in Cork and Munster is a sign of continuing good times ahead.
Corporate finance providers LeBruin has handled around €70m in finance for new projects over the last 12 months, with another €100m in the pipeline. Of course, the main banks are also actively providing finance for projects in the southern region, as are RELM and Finance Ireland.
LeBruin’s Fergal Deasy says the shift in corporate finance is a good indicator of where the economy is now moving. Where management of debt restructuring was a dominant part of LeBruin’s business in Munster in past years, and of course remains significant for the company, the big shift is in the growth in demand for capital for new developments.
“There is a lot of funding activity going on at the moment,” said Fergal Deasy. “We’re managing a lot of private equity, buying out loans and refinancing. We’re really seeing growth in demand for funds for development, notably in residential, hotel and office developments.”
LeBruin has strong relationships with traditional and non-traditional funders in Ireland, the UK and the USA. Since 2008, LeBruin has raised over €10 billion in new debt and equity funding for its clients.
The company works with a number of equity funds that continue to have a keen appetite to invest in its clients’ projects and this has enabled us to assist clients in refinancing their assets in Ireland, the UK and mainland Europe.
Becoming more active in Cork in recent years, LeBruin has worked with partners in providing capital for hotel projects in Little Island and East Cork, and Cork city centre, as well as new developments in retail, banking, residential and offices. The company has been involved in recent projects in the South Mall and Douglas village.
“Cork is very vibrant at the moment,” Fergal said. “A lot of housing is being bought out from NAMA, and a lot of individual sites for redevelopment. There is a massive shortage of apartments in the city.
“There is a lot of activitiy around the movement of the Port of Cork to Ringaskiddy, plus developments in the Port of Cork and Tivoli. We have had a good deal of success in providing finance for these developments.
“The mainstream banks are active but they’re still quite cautious, which is creating a market and adding to the opportunities for companies like ours. Overall, the market is very positive in Cork right now and getting even busier.
“Dublin has gained a huge amount of business, but Cork is also very much on the agenda for new business and property development. There are significant developments in Navigation Square, which is getting significant international interest, while UCC is also involved in a lot of city centre redevelopments.
“The one big disadvantage for us is that the VAT treatment of developers is holding back the potential for growth in residential. That is something the Government has to come up to speed with. To invest in residential, developers need to get a reduction in their contributions and a reduction in VAT. If there’s another concern, then it’s labour.”
Availability of accommodation is a priority issue for international companies considering where to locate business, a consideration closely linked to availability of skilled workers.
LeBruin is an independent Irish company specialising in corporate finance and debt advisory services. The company has a wealth of experience in financial services and in asset investment.
It works with clients who are looking to secure a range of funding options, to invest in lucrative opportunities, or to manage and restructure debt. LeBruin has offices in Dublin and London.
Fergal Deasy’s own background is primarily in investment and pensions. He has been working in financial services for the past 30 years. He joined LeBruin two years ago.
“Corporate finance and lending are really picking up. We are putting a team together in Cork, because there is plenty more business coming down the line,” said Fergal.