Ireland's two big homebuilders eye growth in state-partnered projects

By Graham Fahy and Padraic Halpin

DUBLIN (Reuters) - Ireland's two largest homebuilders, Glenveagh Properties and Cairn Homes, are ramping up building on behalf of the government and see it is a major growth area, the companies said after reporting full-year results this week.

Despite recovering to a 15-year high of almost 33,000 units last year, new housing supply in Ireland has for a decade failed to keep up with demand. Analysts say closer to 50,000 homes are needed a year as the economy and population grows strongly.

Cairn and Glenveagh, who have accounted for around 15% of housing output since 2019, according to Goodbody Stockbrokers, said the share of that output being sold to the state is rising thanks to increased government funding, new initiatives and shrinking demand from institutional investors.

"We've identified this as a key growth area. We see a big opportunity for both sides, both for the state to meet its needs and us for what we can do as a business," Glenveagh CEO Stephen Garvey told reporters on Wednesday.

Glenveagh expects revenues in its new "partnerships" division - set up for schemes it is developing with local authorities and government housing bodies - to exceed 100 million euros this year with the capacity to reach three to four times that if the number of projects grow, Garvey said.

Glenveagh reported total revenue of 608 million euros last year and a 1% rise in operating profit.

Cairn, Ireland's largest private apartment builder, expects to keep selling more blocks to the state and will be "massively supportive" of the state-owned proportion of the housing stock moving towards the European norm of 20% from 10% currently, CEO Michael Stanley said on Thursday.

Cairn reported a 10% increase in full-year operating profit to 113 million euros last year.

"The ownership within the state by the government or state entities needs to increase massively," Stanley told reporters, saying many current policies could help achieve if they are scaled up and there are more housebuilders of scale to deliver.

"We have to wake up guys and realise this, we are destroying our economy because of our housing shortage for young people."

(Reporting by Padraic Halpin; Editing by Hugh Lawson)