Stories
Aros Kapital, a Nordic challenger bank, has partnered with Irish specialist construction lender Property Bridges to fund up to €100 million of credit to Irish developers of new homes.
The bank and the Irish lender are offering loans of over €1 million and up to €12 million to build social and other residential housing.
The Sweden headquartered firm has already lent over €350 million to builders and developers in the British market using similar partnership models.
Property Bridges was founded in 2018 as a peer-to-peer lending platform for smaller developers seeking between €500,000 and €1.5 million and the company will continue to operate this business while offering developers seeking larger loans access to Aros Kapital.
David Jelly, the chief executive and founder of Property Bridges, told The Currency: “We’ve teamed up with Aros Kapital, a leading Swedish challenger bank, who are offering us a €100 million credit line. We will be their exclusive partner in Ireland.”
He said Aros Kapital was taking a 10 per cent stake in Property Bridges as part of the deal. They join other backers including Lagan Investments, the investment company of the family of Kevin Lagan, the NDRC, EI and a group of angel investors.
“We would hope to eventually offer buy to let mortgages with Aros or owner-occupier mortgages”
David Jelly
“The credit line from Aros Kapital is primarily for use in social housing development,” Jelly said. “We know the government is looking to build 33,000 new houses a year under its Housing for All plan, and we want to help in achieving that goal. We want to be on the ground providing funding to developers to build more houses.”
“We are three years in the market now and teaming up with Aros Kapital will really help us scale up. Property Bridges will do deal origination, credit risk, due diligence and manage risk as part of the partnership.”
Property Bridges, according to Jelly, will continue to run its peer-to-peer lending platform matching private investors with small developers.
“We’ve helped to fund several hundred housing units since we launched,” Jelly said. “We’ve deployed around €25 million into the market via our peer-to-peer investor platform building houses throughout Ireland as well as raising money from family offices.”
Jelly said the Aros Kapital €100 million credit line would be primarily to build social housing to be sold back to councils or housing bodies, but it would also consider funding private residential housing if the right deal came along.
“We would hope to eventually offer buy to let mortgages with Aros or owner-occupier mortgages,” he said. “Aros could become another challenger bank in the Irish market like Avant in time.”
Gustav Rocklinger, chief executive of Aros Kapital said: “We are delighted to be partnering with Property Bridges in what is a major strategic investment for the group.”
He added: “After assessing several markets in the EU, we believe Ireland is one of the most attractive in terms of overall market fundamentals, backed up by encouraging housing policy and positive demographic factors.
“We identified Property Bridges as an ideal partner, sharing our ethos and innovation-led approach to lending. We believe their strong track record to date demonstrates they are well placed to support our growth ambitions.”
Jelly added: “Our dealings with Gustav and the Aros team have been first class and their track record speaks for itself. We’re delighted that this partnership will help to deliver somewhere in the region of 600 social homes in the first 18 months and many more going forward.”
“The Housing for All strategy is set to be the most ambitious housing plan for a generation. With 310,000 new homes to be delivered before 2030 a huge amount of capital will be required both public and private,” he added. “As a provider of development finance, we are delighted to be playing a part in the delivery of those homes.”
Accounting firm EY was appointed as sole financial advisor to run the transaction for Property Bridges in a transaction led by Stuart Mogg an Associate Partner in the EY FS Corporate Finance team. Based in London, Mogg is a former director of structured finance with Royal Bank of Scotland.
Further reading:
Ronan Horgan’s Capitalflow has advanced €550m to Irish SMEs. And this is just for starters
