While the report earlier this week that the Land Development Agency (LDA) has struck a €40 million deal with Nama to advance plans for 2,500 “affordable” homes at Clongriffin in north Co Dublin should be a cause for celebration, don’t go breaking out the bubbly just yet.
Even if the anticipated deal proceeds, the LDA will be up against it immediately as the clock ticks down to the expiration in December 2024 of the existing planning permission for the 1,823 residential units located on the 27.4-acre portion of the site, long controlled by developer Gerry Gannon’s Gannon Properties. The clock is ticking, too, on the planning permission that’s in place for 400 homes on the portion of the lands that were controlled by another Nama client, Barina Construction.
All told, the LDA, an arm of the State, is said to be prepared to pay up to €45 million to secure control of the Gannon and Barina sites from Nama, another arm of the State. If that figure sounds familiar, it’s because it’s the same amount that another developer, Sean Mulryan’s Ballymore, had been gearing up to pay for the Gannon lands by themselves, before pulling back from the deal last September in the face of rising interest rates and a spike in building costs.
With little prospect of securing the sale of a private rented sector (PRS) scheme to any of the institutional investors, who by then were already beating a hasty retreat in response to the European Central Bank’s decision in July 2022 to raise its key interest rate for the first time in 11 years, Mulryan knew better than to take a gamble.
While the LDA’s decision to step into the breach left by the withdrawal of pension funds and other institutional investors will be welcomed by many, the move is set to be a particularly costly one, notwithstanding the lower price being mooted for the site and the agency’s status as buyer of last resort. What a pity that Nama didn’t just press ahead four years ago with the development of the near 1,900 apartments for which Gannon Properties secured planning permission in 2019.
Having masterplanned the north Dublin site a full 20 years ago, Gannon had, with the State agency’s support, already built some 400 houses on the lands which sit immediately adjacent to Clongriffin Dart station. One wonders why they didn’t just keep on building at a time when the costs of construction were 30 per cent lower.
The Clongriffin development, which is now being repackaged as the biggest single State housing project in decades, with building costs far in excess of €1 billion, could well have been delivered by now, and at a much lower cost to the taxpayer.
