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CONSTRUCTION LOAN UPDATES

CONSTRUCTION LOAN UPDATES

We have been in regular contact with our Borrowers, who have active building sites, during the Covid 19 lockdown. We are happy to report that all are in a strong position, with no specific issues arising on their sites, and all can meet the new public health guidelines for construction sites. However, the 2-month shutdown will inevitably impact the repayment date for the loans, but lenders will still get paid interest during any extended period.

The following are the individual updates.

PALLASKENRY

This loan for €2.4m is now over 50% drawndown. It was provided to fund the construction of 16 houses in Pallaskenry, Co. Limerick, which is a 20-minute drive from Limerick City Centre.

  • When we last raised funds for this project, we advised you that Limerick City & County Council had issued a Letter of Intent to purchase all 16 units in the development, there has been significant progress in this matter in the intervening period.
  • The Council appointed a QS to calculate an offer price for the houses.
  • Following detailed negotiations with the Developer, Top Drawer Developments, agreement was reached on price for the entire development.
  • This proposal has gone to the Dept of Environment for sign off.
  • It is our experience that the sign off process is a very straight forward, so we expect this to be completed in a matter of weeks. We will advise you of the completion of the Sales Contract as soon as it happens.
  • The Developer is now back on site, however the lockdown has delayed the project. This may result in the completion of the development occurring after the current expiry date of the loan.
  • We will continue to update you on this situation, however given that there will be a sales contract in place with the Council and the delay is completely outside the control of the Borrower, this position is acceptable.
  • Lenders will continue to benefit from the advertised interest rate during the lifespan of the loan.
  • There will be further loan drawdowns for this development.

MULLAGH

This loan for €472,000 was put in place to fund the construction of 5 detached houses in the village of Mullagh, which is on the Cavan Meath border, close to Kells, Co. Meath.

  • The sale of the second and third houses completed just before the construction lockdown was put in place at the end of March.
  • These sales resulted in a loan repayment of €250,000, with funds being transferred to lenders accounts on the 16th of March 2020.
  • The remaining sales proceeds are held in an account, where we control the funds.
  • These funds will be used to complete the building of the final two houses.  Construction work has now recommenced on site.
  • Both of these houses have sales contracts in place, with a combined price of in excess of €600,000.
  • The fourth house is over 70% complete. The last house was at foundation level at the time of the lockdown.
  • The sale of the fourth house will fully repay the loan. This is expected to happen within 3 months of construction being allowed back to work.

MONASTERBOICE

This loan for €630,000 funded the purchase of a site in the village of Tinure, near Monasterboice in Co. Louth. The site comprised of two houses, one of which is being rented out and sites for five houses where the planning has expired.

  • When we brought this loan to our Platform in late February. We advised Lenders that the Borrower intended to put the first house on the market, as soon as the sale of the overall site completed.
  • Our Valuer attributed a value of €475,000 to this house.
  • The Borrower has agreed the sale of this house to a cash buyer for a price in excess of the valuation.
  • The new owner has requested some modifications to the house, which the Borrower has been unable to start until now, due to the lockdown.
  • We expect the sale to complete at some point in late June. This will result in excess of 50% of the loan being repaid. The remainder of the sales proceeds will be used to fund future planning costs, as was agreed on day 1.
  • The Borrower is continuing with its plan to sell the second house in the latter half of the year and to reinstate the planning for the five sites.
  • The proceeds from the sale of the second house will repay our loan in full.

CASTLEKNOCK

This loan for €400,000 funded the purchase of a buy-to-let property in Castleknock, Dublin. The property is currently being rented out to a local family.

  • We brought this to the platform just before Christmas 2019 as the purchaser and vendor were both in a hurry to complete the sale.
  • The borrower is making monthly repayments on this loan through a standing order.
  • Lenders were paid their first quarterly interest on the 28th of April, 2020. The next payment is due at the end of July.
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