First of its kind public-private social housing deal worth €51m agreed

Transaction Overview

Circle Voluntary Housing Association (VHA) has agreed a landmark €51 million investment package. This will provide social and affordable housing for families across the country. The approved housing body announced it’s plans today to deliver 250 homes over the course of the next 12 months through an innovative model of financing.

The finance package, structured by Centrus, who acted as Financial Advisor to Circle, and funded by AIB, provides the housing association with a three-part loan. This will be over a 30-year period, which includes a revolving credit facility, a term loan and a working capital facility. The nature of the agreed package allows Circle VHA to re-use the borrowed funds at any time over the period of the loan, providing a safeguard for ongoing speedy development of social housing.

The deal is now the largest private financing package to any approved housing body in the country. It is hoped that the initial 250 properties are the first of many thousands to be developed in the coming years in areas such as Greater Dublin Area, Cork, Limerick,  Waterford Kildare and Galway.

The positive announcement comes in the midst of negativity as the Department of Housing, Planning and Local Government announced latest figures of 10,514 homeless people living in emergency accommodation in recent weeks.

“We are absolutely delighted with this historic agreement which has ultimately safeguarded our passage to delivering over 250 homes for social housing across the country in a mere matter of months. This innovative public-private partnership approach is what is needed to solve the housing crisis and now with our 30-year agreement, we estimate we will be able to bring approximately 300 social houses to the market each year.

This finance solution was a result of combined-thinking and collaboration between Centrus, AIB and ourselves. What we have achieved is a modern approach to financing that has never been accomplished in this sector before. It is a sustainable model which will benefit thousands of families over the course of many years due to the revolving nature of the credit, allowing us to expand and provide additional homes on an ongoing basis.

I must commend Centrus for their leadership in this deal. Their professionalism and commitment is what secured such a workable funding structure for Circle. Also, we must mention AIB who are facilitating the financial package and who once again are showing their commitment to help solve the housing crisis.”

John Hannigan, CEO – Circle VHA

“We are delighted to have been involved in this ground-breaking agreement which will help many families across Ireland. Transactions like this provide sustainable solutions to deliver much needed additional social housing to the market. Working with both Circle and AIB has been a rewarding experience and has proven the effectiveness and importance of organisations operating collaboratively.

Our team are thrilled to see the first of the 250 houses now ready for occupation 69 in Dublin and Cork. In our experience to deliver real social impact it requires innovative modern financing models which deliver long-term and viable solutions for financing housing .

I am confident that if developers, legal teams, financial institutions and approved housing bodies continue to foster collaboration in a similar manner, projects like this will grow and develop, allowing the provision of housing to be expediated.”

Jason Murphy, CEO – Centrus

“AIB Corporate Banking is delighted to have delivered this important financing package for Circle VHA which will ultimately support the housing of up to 300 families. AIB is actively engaged with the social housing sector and we continually seek ways to support the delivery of housing. This innovative financing is a great example of working in strong collaboration with our clients and their advisors to deliver a long term sustainable funding source. We look forward to continuing the strong relationship developed with Circle and Centrus on this transaction to support the sector in the future.”

Cathy Bryce

For more information, please contact jason.murphy@centrusadvisors.com

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