Finance Ireland, the country's biggest non-bank lender, expects to provide more than €100 million in loans this year to finance commercial property transactions here.
The privately-owned company, led by former Permanent TSB chief executive Billy Kane, has revealed that it has financed more than 40 transactions since it entered the market in 2016, involving a combined €65 million in loans.
Ken Murnaghan, Finance Ireland's managing director of commercial mortgages, told The Irish Times that its current run rate for lending was €10 million a month. "We've had a great first quarter of the year, and running at €10 million a month is a nice place to be."
Mr Murnaghan said the Irish company had focused on lending to domestic borrowers at between €1 million and €5 million per transaction. This has been used to fund deals on income-producing assets with SME-sized tenants. This typically involves a small block of apartments, offices, retail or factories.
“It’s a targeted segment of the market. In this space we see that we’ve done more business than anyone else. We have our own money and our own balance sheet, and we make all of our decisions from this building.”
Urban areas
He said 85 per cent of the lending was used to support projects in urban areas (Greater Dublin, Cork, Galway and Limerick) and the balance in provincial centres.
Some 30 per cent was in both the residential buy-to-let space and retail, 25 per cent in office and other commercial, and 15 per cent in industrial.
Finance Ireland’s typical loan-to-value ratio is 75 per cent, with interest rates ranging from 6.5 to 8.5 per cent. The company is a regulated business, allowing it to lend to individuals as well as companies.
Mr Murnaghan launched Finance Ireland's commercial mortgage division last year having previously held senior roles with both Ulster Bank and AIB. The company employs 10 staff in this area.
Momentum
“We are experiencing strong market momentum at the moment,” he said. “We doubled our size in Q1 with regard to both customer and team numbers. International loan funds remain active, and we are an important part of the story on how they exit the market and how borrowers rebuild their businesses with a new lender.”
Finance Ireland was set up in 2002 and employs about 100 staff. Its shareholders include the Ireland Strategic Investment Fund (ISIF) and global investment group Pimco, and it is also involved in auto finance, leasing and agri-finance.
