KKR & Co. and the Irish government will provide 500 million euros ($552 million) of lending to homebuilders to help ease a shortage of family homes as the nation’s real estate market and economy recover.
The investment by the New York-based private-equity firm and the Ireland Strategic Investment Fund, which will create 1,900 full-time jobs, is the biggest ISIF deal to date, KKR and the government said in a statement Tuesday. ISIF will contribute 325 million euros, they said.
Irish residential property prices rose 10.7 percent in the year through June, the Central Statistics Office said yesterday, driven by a dearth of family homes in Dublin. Fewer than 15,000 homes will be built in Ireland this year, compared with demand for 31,000 units a year over the medium term, according to Dermot O’Leary, chief economist at Goodbody Stockbrokers.
More than 90,000 homes were completed in Ireland at the peak of the market in 2006.
“Many builders and developers are reporting difficulties accessing finance for building projects so this investment is hugely significant,” Ireland’s Environment Minister Alan Kelly said in the ISIF statement. “Construction is still below what we might consider normal levels.”
The venture will provide homebuilders with as much as 90 percent debt financing for projects, according to the statement.