As a developer and investor with over €30m of real estate assets in Dublin, South Hill Capital is calling for more of London’s challenger banks to follow Starling Bank’s lead in seeking approval to operate in Ireland, to help fuel development.
Starling Bank, a challenger bank set up by former Allied Irish Bank COO, Anne Boden, in 2014, has been given approval by the Bank of England to operate in Ireland, under the EU’s passporting arrangements.
With Ireland’s national banks still struggling to rid themselves of their bad loans, many of those trying to invest in, or develop, real estate in the country have been unable to secure the necessary funding. South Hill Capital, an active player in the Dublin commercial and residential property markets, believes that with the big Irish banks still nervous of lending to small and medium sized investors and developers, a void has been created that could be filled by more entrepreneurial lenders. It also claims that the length of time it takes to secure a loan from the main lenders is leading to stalled deals and slowing the market down.
South Hill Capital director, Philip Brainin, says: “There is currently a disparity between the length of time it takes to secure development loans from the banks and the speed with which property transactions are taking place. The difficulty in securing this funding is hitting SME investors and developers and causing them to miss out on deals, which is having a knock-on effect on the whole market.
“Challenger banks have become common place in London and across the UK, and are growing in popularity as a means for developers to access deals. A market place that has the uplift potential that we see in Dublin should prove an attractive proposition to lenders. This is especially true at a time when the Irish pillar banks and traditional lenders are adjusting to new regulatory requirements and have to be more cautious than they might otherwise like to be.”