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Macro Location Analysis
EvoEstate Risk rating is of an informative nature only & can not be considered investment advice.
Loan To value
Mirc Properties Limited
Village View, Johnstown, Co. Kildare
A first fixed charge over the property
7% per annum (paid on completion)
LTV / LTC
70% / 68%
24 months (12 month minimum)
The purpose of this loan is to provide a bridging loan for the purchase of Village View, Johnstown.
Mirc Properties has agreed to purchase a property known as Village View in Johnstown, Co. Kildare. The property which will be purchased for €465,000 is in the village centre and has obvious potential for redevelopment into housing units.
The plan is to acquire the property and to apply for planning permission for 18 apartments - 14*2 beds and 4*1 beds.
Our view is that the location adjacent to the M7 and within the village centre of Johnstown means that the planning authorities would support and in fact would require that the site be used for housing at the density levels that the application will set out. However, we are not relying on a positive planning decision.
A valuation conducted by a well-known local agent on the 7th of May 2021 has valued the property at €455,000 as is. If planning is rejected, the borrower would put the property back on the market and sell the property as it is.
The main promoter of Mirc Properties Limited has significant development experience and owns multiple assets in the area.
A first fixed charge over the property to be acquired by the borrower consisting of a detached 4-bed bungalow and shop on a .4acre site known as Village View, Johnstown, Co. Kildare.
A first floating charge over the borrower company.
Property Bridges has compiled this report on behalf of our lenders and have taken reasonable care to ensure the information provided is authentic and accurate. Please be aware that returns are not guaranteed, and your capital is at risk. Please also note that the term is not certain and may be extended under certain circumstances. Investors should seek their own advice before investing.
Property and Location;
Johnstown is a growing commuter village located on the Dublin side of Naas and just off the M7 motorway. The village has a range of amenities and the subject property has the benefit of being within walking distance of local facilities which is a significant factor when planning for more dense housing development is being sought.
We have had a full valuation report completed on the property and this confirms that the purchase price essentially represents the value of the property (Valuation €455,000 / Sale price €465,000)
The valuation was carried out by Coonan’s Auctioneers who are local market specialists in Kildare and they used a comparison method to arrive at the valuation.
The property itself is a large 4 bedroomed detached bungalow and a disused shop all located on a 0.4 acre site in the busy village of Johnstown, Co. Kildare.
There are three options for exiting this loan
Option 1: Should the planning permission be issued then Property Bridges or another funder will be quoting for the development loan and this development loan will refinance the bridging loan.
Should planning issue as intended it will significantly enhance the value of the property. In this busy and attractive location the scheme is likely to be profitable and attract quotes from other development lenders.
In summary should planning issue then the loan will be repaid through the proceeds of a development loan.
Option 2: If planning is refused then it is likely that the refusal would be one of detail as opposed to the concept of building accommodation on the site. The borrower would amend the planning application and proceed with the new development and again use a development loan to exit. Even at lower densities the economics of the deal appear reasonable.
If a development loan was not forthcoming the site could be resold with the benefit of the newly acquired planning permission.
Option 3: No planning issues and no viable scheme appears likely to succeed.
Under this scenario, the property would be placed back on the market and our Facility Agreement has a clause inserted requiring this to happen at month 21 of the loan facility if no planning has issued. The borrower is agreeable to this provision.
The loan will be repaid from the sale of the asset. This is an existing building/business and as such the current sale was not predicated on a planning permission play so the price should not change as a result of an unsuccessful planning application.
This loan is not dependent on the success of the planning application for its exit. The borrower understands this and will simply sell the property if planning does not issue - our LTV is comfortable and the loan is low risk even if the planning decisions all went against the borrower.
It is possible that site conditions or other geographical conditions could frustrate planning.
It is possible that a combination of an outright refusal on planning is matched by a fall in the price of property in this location - we see this as an unlikely combination in the current market. Planners are under pressure to approve schemes for housing in areas such as this and the lack of supply of accommodation is currently causing property price inflation not deflation. For the term of the loan it is difficult to see either of these positive factors being reversed.
The property has a prime location in a busy commuter village well located beside the large and vibrant town of Naas and adjacent to the motorway which connects the area to Dublin city which can be reached in 30 minutes.
The property is large and has an extensive site of 0.4acres. The zoning is Village Centre which allows for a range of residential and commercial uses.
Planning is likely to be achieved the main issue would be at what level of density. The location of the property in the middle of the village will encourage approval of relatively high density development as policy is to maximise development in areas where all the services are already in situ.
The loan is not dependent on planning being achieved - if it is not then the property will be resold and the loan plus accrued interest repaid.