INFORMATION MEMORANDUM FOR INVESTMENT IN THE IRISH SOCIAL RESIDENTIAL REAL ESTATE MARKET - through an AIFM Regulated Fund "The Irish Real Estate ...
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INFORMATION MEMORANDUM
FOR INVESTMENT IN
THE IRISH SOCIAL RESIDENTIAL REAL ESTATE MARKET
through an AIFM Regulated Fund
“The Irish Real Estate Social Fund”THIS INFORMATION MEMORANDUM (THE “DOCUMENT”) IS PROVIDED BY CKW INVESTMENTS LTD (“CKW) TO A SELECT NUMBER OF RECIPIENTS (“RECIPIENTS”). CKW IS NOT AUTHORISED OR OTHERWISE APPROVED BY THE CENTRAL BANK OF IRELAND AND IS NOT SUPERVISED BY THE CENTRAL BANK OF IRELAND. THIS DOCUMENT HAS NOT BEEN SEEN, REVIEWED OR APPROVED BY THE CENTRAL BANK OF IRELAND. THIS DOCUMENT IS PRIVATE, CONFIDENTIAL AND PERSONAL TO THE PERSON TO WHOM IT IS SENT AND MAY NOT BE COPIED, IN WHOLE OR IN PART OR DISTRIBUTED TO ANY OTHER PERSON. THIS DOES NOT, AND SHALL NOT, BE DEEMED TO CONSTITUTE AN INVITATION TO THE PUBLIC IN IRELAND OR ELSEWHERE TO APPLY FOR SECURITIES. NEITHER THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO SUBSCRIBE FOR SECURITIES IN THE COMPANY IN ANY JURISDICTION IN WHICH SUCH OFFER WOULD BE UNLAWFUL ANY INVESTMENT PURSUANT TO THIS INFORMATION MEMORANDUM WILL BE THROUGH A REGULATED AIF WHICH IS OPEN TO PROFESSIONAL INVESTORS ONLY. THE AIF’S INFORMATION MEMORANDUM WILL BE MADE AVAILABLE TO INVESTORS WHO HAVE EXPRESSED AN INTEREST TO INVEST. It is acknowledged by the reader that information to be furnished in this Information Memorandum is in all respects confidential in nature, other than information that is in the public domain through other means, and that any disclosure or use of this confidential information by the reader may cause serious harm or damage to CKW Investments Ltd.
Contents
Executive Summary:...................................................................................................................................... 4
Introduction: ................................................................................................................................................ 5
Why invest in Ireland? ............................................................................................................................... 5
The Irish Social Housing Market: ................................................................................................................ 7
Social Housing: ...................................................................................................................................... 7
Proposed Investment: ............................................................................................................................... 9
Current Opportunities: .................................................................................................................................. 9
CKW The Promoters & Fund Advisers: ......................................................................................................... 10
David Walsh ............................................................................................................................................ 10
John Corcoran ......................................................................................................................................... 10
John Kidney: ........................................................................................................................................... 11
Advisors to the development SPV ............................................................................................................ 11
The Fund Structure: .................................................................................................................................... 12Executive Summary:
CKW Investments Ltd CRO Number 680793 (“CKW) is a corporate vehicle by which an experienced team of
professionals (Accountancy, Architectural, Building and Investment) have come together to deliver completed
social housing to Irish Social Housing Bodies (Local Authority or Approved Housing Body) through a regulated
fund.
Due to the scale of the housing shortage the Irish Government launched Rebuilding Ireland an initiative with
the stated objective of building more homes in Ireland. “The overarching aim of this Action Plan is to ramp up
delivery of housing from its current under-supply across all tenures to help individuals and families meet their
housing needs and to help those who are currently housed to remain in their homes or be provided with
appropriate options of alternative accommodation, especially those families in emergency accommodation”. 1
Launched by the government in 2016, Rebuilding Ireland is considered an ambitious strategy to alleviate the
housing crisis by accelerating the housing supply nationwide and delivering sustainable long-term housing
solutions to those in need. It aims to address the needs of homeless people and families in emergency
accommodation, accelerate the provision of social housing, utilise vacant homes and improve the rental
sector. This will be achieved through collaboration between Local Authorities, Approved Housing Bodies
(AHBs), the National Treasury Management Agency (NTMA) and the private sector.
Social Housing is a vital part of the housing market in Ireland and it is provided by a local authority or an
approved housing body to people who are unable to afford housing from their own resources. Both providers
are the primary delivery channels of social housing units with a total of approx. 175,000 units throughout the
country and growing.
Our model is to identify the particular needs of housing (Unit Size) with the various housing bodies and to
then identify and acquire sites with planning, develop same and sell the completed units, at a pre-agreed
contracted sale price.
All housing bodies and councils are Government funded and as such offer investors defined exits in terms of
price and time.
Investors can expect a minimum 5% per annum return with potential for additional interest in certain
circumstances. Investors will invest through a regulated fund which will have full control and security of all
developments.
The Investment term is for a minimum 2 year term with the option for longer periods of 3 to 5 years.
1
Rebuilding Ireland Action PlanIntroduction:
Why invest in Ireland?
Despite the Covid impact and following the Brexit trade deal Ireland remains a solid investment destination
and has proved somewhat resilient during both crises.
Although hurdles remain, the development and prospect of widespread deployment of vaccines offers hope
for a path out of the crisis and, further out, an improved outlook for economies and societies. (source Central
Bank of Ireland).
“Despite the adverse economic impact of the pandemic, Irish sovereign borrowing rates remain at very low
levels - supported by the ECB’s pandemic emergency purchase programme – while the medium term maturity
profile is broadly favourable, with no bonds maturing in 2021. The National Treasury Management Agency
(NTMA) also entered 2021 with large cash balances, increasing sovereign funding flexibility.” 2
This borrowing capability together with direct taxes proving to be much more resilient than expected will
provide support for the Government to fulfil their social housing requirements. A belief is also held with
Government that once the pandemic is over the focus will return to the housing crisis.
Who invests in Ireland?
Over 1,150 international companies and numerous real estate funds have operations in Ireland. These
companies are involved in a wide range of activities and sectors including technology, pharmaceuticals,
biosciences, financial services, Real Estate and manufacturing. The attraction of Ireland as an investment
location can be attributed to the positive approach of successive Irish Governments to the promotion of
inward investment, its membership of the European Union (“EU”), a very favourable corporate tax rate and a
skilled and flexible labour pool.
Forbes has ranked Ireland one of the best countries in the world for business. Ireland has succeeded in
attracting some of the world’s largest companies to establish operations here. This includes some of the
largest firms in the global technology, pharmaceutical, biosciences, manufacturing and financial services
industries.
They are in Ireland because Ireland delivers:
• low corporate tax rate – corporation tax on trading profits is 12.5% and the regime does not
breach EU or OECD harmful tax competition criteria.
• low (if any) tax on certain foreign dividends.
• tax allowances for Intellectual Property.
• capital allowances for expenditure on intangible assets.
• regulatory, economic and people infrastructure of a highly developed OECD jurisdiction.
• benefits of EU membership.
• common law jurisdiction, with a legal system that is broadly similar to the Australian, Canadian,
US and the UK systems.
• refundable tax credit for research and development activity and other incentives; and
2
Central Bank of Ireland Quarterly Bulletin Q1 2021• extensive and expanding double tax treaty network, with over 70 countries, including the US, UK,
China and Japan.
• Ireland has the youngest population in Europe with one third under 25 years of age and almost
half the population under the age of 34.
• Ireland’s education system is amongst the top 10 globally.
Our own experience, together with research carried out by the Economist Intelligence Unit, indicates that it is
the unique combination of these factors, and not one specific element, which attracts investment to Ireland.
While other countries may be competitive in some of the areas highlighted above, Ireland’s ability to create
the most compelling suite of both tangible factors (such as taxation and the regulatory framework) and more
intangible elements (such as a “can do” attitude to business) is generally cited as central to its ability to
attract investment over other EU countries.
Did you know?
• 9 of the top 10 global pharmaceutical companies
• 9 of the top 10 software companies
• 12 of the top 15 medical tech companies
• 15 of the top 20 financial services companies
• 9 of the top 15 internet companies - 3 of the top 6 games publishers
are all located in Ireland.The Irish Social Housing Market:
The economic case for targeting the real estate market is well documented in Ireland considering the
pressures the Irish Government are under to deliver housing to its citizens. The whole housing issue
dominated the recent Irish General Election.
Social Housing:
Due to the scale of the housing shortage Rebuilding Ireland is an Irish Government initiative with the stated
objective of building more homes in Ireland. “The overarching aim of this Action Plan is to ramp up delivery of
housing from its current under-supply across all tenures to help individuals and families meet their housing
needs, and to help those who are currently housed to remain in their homes or be provided with appropriate
options of alternative accommodation, especially those families in emergency accommodation”. 3
Under Rebuilding Ireland, the Government has committed more than €6 billion to support the accelerated
delivery of over 138,000 additional social housing homes to be delivered by end 2021.
The plan revolves around 5 Pillars, from our perspective 1 of these 5 pillars is key. Pillar 2 “Accelerate Social
Housing”
Accelerate Social Housing:
Some Key points of this Pillar are:
• 50,000 social housing units will be delivered under Rebuilding Ireland’s plan by 2021.
• 33,500 of these homes will be exclusively built as social housing.
• 6,500 homes, many of which will be newly-built, will be acquired by local authorities (LAs) and
Approved Housing Bodies (AHBs) directly from the market or the Housing Agency
• 10,000 homes will be leased by LAs and AHBs. 5,000 of these will be sourced via the National Treasury
Management Agency’s Special Purpose Vehicle. A further 5,000 units will be secured via a pilot Repair
& Leasing Initiative and under long-term lease arrangements by LAs and AHBs
The plan involves the private sector acquiring sites, developing and selling social homes directly to councils
throughout the country. We currently have active relationships with local councils and housing bodies and
have agreements in principle for the sale of homes on a number of sites we are working on. All sales to the
councils and housing bodies are a discount to market value.
The table below reflects the current delivery situation which is behind target.
3
Rebuilding Ireland Action PlanRebuilding Ireland - Targets and Progress
Year/Category Target 2020 Output 2020 Target 2021
Build 7,736 725 8,907
Acquisition 800 355 800
Lease 2,631 387 2,450
Subtotal 11,167 1,467 12,157
RAS 600 373 0
HAP 15,750 7,825 10,000
Subtotal 16,350 8,198 10,000
Overall Total 27,517 9,665 22,157
Note:
RAS – Rental Accommodation Scheme
HAP – Housing Assistance Payment
Further supports have been earmarked for the industry in this year’s Government’s Budget (2021) announced
on the 13th October, these are:
• €3.3 billion spend on housing – 24% increase on 2020 and highest investment in housing by any
Government in a single year.
• Social housing, 28,500 additional households to be met in 2021.
• 12,750 new homes will be added to the available supply of social housing through build, acquisition
and long-term leasing.
• Support for local authorities and Approved Housing Bodies to deliver 9,500 new build homes in 2021.
The numbers above suggest the current market opportunity is circa €5.7 Billion reflected as follows:
• Average Cost of Individual Site €40,000
• Average Build Cost €180,00 (inclusive of services, fees etc)
• Average house size 93 M² (1000 FT²)
• Margin of Circa 18%Proposed Investment:
The Fund’s proposition is to identify and acquire sites with planning, in tandem, the fund will negotiate a sale
contract with an approved housing body or local council.
Once the contracts have been agreed, CKW, advisors to the fund will commence developing the project and
will deliver within the agreed timeframe.
Once the projects have been handed over and paid for all investors will be re-paid their invested capital with
interest or the option is there to re-invest.
Current Opportunities:
CKW are in continuous negotiations with site owners and several live opportunities and other mid to long
term pipeline ones have been identified.
The sites are at various stages in the planning process with a number due to be granted within 2nd quarter
2021.
An overview of these
1. A Mixed Development of 42 (3/4 Beds) Units in Co.Tipperary.
2. A Development of 63 (3 Beds) in Cork
3. A Mixed Development for 31 (2/3beds) in Cork
4. A Development of 16 units (3 beds) in Cork
5. A Development of 30 units (3 bed Townhouses) in Cork
All of the above units will be sold on a pre-agreed sale contract.
Individual Project durations are between 12 – 18 months.CKW The Promoters & Fund Advisers: Patrick O’Toole: Patrick is a qualified, EU-registered Architect & Planning professional. Patrick has over 17 years’ experience in the successful delivery of private and public housing projects and has overseen over 2,500 residential completions in Ireland. Patrick has in depth knowledge of the Irish housing market, its regional variations and enjoys close relationships with many state and industry stakeholders. Patrick has held senior positions with STW Architects, Remcoll Capital and has also been responsible for growing Meitheal Architects into one of the largest housing design and planning practices in Ireland. Patrick has led industry-firsts in tall building and Strategic Housing Development consents. As well as his professional commitments Patrick has taught at Oxford Brookes University & University College Cork CCAE. David Walsh David qualified as a Mechanical Engineer in 2002 and has been in the residential building and development sector for over 15 years. David has been involved in a number of successful private multi scale residential developments in the Cork, Ireland area and has significant experience of sourcing off market land development opportunities. David through his building company Rockforest Homes will be the principal building contractor for all residential housing projects and will act as project manager for apartment opportunities which require specific building expertise. Rockforest Homes are currently building a number of multi-unit residential developments. John Corcoran: John Corcoran is a director and shareholder in 3 companies, all within the financial sector. These companies are AHR Private Wealth Europe Ltd, an Irish Central Bank regulated Investment firm where he holds the office of Managing Director a Pre-Approved Controlled function (PCF) as laid down by the banks Fitness & Probity regime. AXG Asset Management, a firm based in London a firm regulated by the FCA and Cap Corporate Finance Services Ltd which provides transaction services to clients. John holds a BCL and a LLM (Business Law) from UCC, a Post Graduate Diploma in Corporate Finance from Chartered Accountants Ireland. he is, a Registered Stockbroker, a Registered Tax Consultant, a Qualified Financial Advisor, has Diplomas in Wealth Management & Investments, is a Member of Chartered Institute for Securities & Investments and a Member of the Irish Institute of Bankers and a Member of the London Institute of Banking and Finance. John has 20 Years + experience in Private Investment & Corporate Finance Transactions (Disposals, Acquisitions, Valuations, Fund Raising, Structured Product) in both Ireland and the UK. He has served in
senior management positions with PLCs and AIM listed companies in addition to working with start-ups and
established SMEs.
John has significant knowledge of the development landscape in Ireland having organised funds for clients
through the existing lender market and additionally has significant experience of the investment vehicle
landscape in Ireland.
John Kidney:
John qualified as an accountant in 1997 and is a member of the Institute of Certified Public Accountants in
Ireland. John is currently managing partner of FJ Forde and Co who are Registered Auditors and accountants
since 2002.
John’s client base is right across all industry verticals and especially within the construction and development
sector where he has gained considerable experience of residential development projects.
Advisors to the development SPV
• Legal: CDS Law & Tax, Penrose Wharf, Alfred Street, Cork, Ireland
• Architect: Meitheal Design Partners, 5 Father Mathew Quay, Centre, Cork, T12 X0PR, Ireland
• Quantity Surveyor: John J Casey & Co. Carrig House West End, Ballincollig Co. Cork, Ireland
• Planning Consultant: Butler O’Neill, No. 7, Thompson House, MacCurtain Street, Cork, Ireland
• Accountants: FJ Forde & Co, Carrigtwohill Cork, Ireland
• Financial Advisors: Cap Corporate Finance, 26 Upper Pembroke Street, Dublin D02 X361,IrelandThe Fund Structure:
Bastion Wealth Fund
Manager
CKW – Advisor to Fund
Manager
Fexserve Fund Services Reyl & Cie (Malta) Ltd-
Deloitte- Auditors
- Administrator Depositary
The Fund is regulated by the Malta Financial Services Authority and will have passport rights to market in
Ireland and other selective EU countries under Regulation 33 of the EU (AIFM) Regulations 2013.For further Information please contact:
John Corcoran
EUI Private Wealth Limited
26 Upper Pembroke Street
Dublin 2
Tel 353 1 234 37 87
jcorcoran@euiprivatewealth.comYou can also read
