The deal commences Fortwell Capital's lending into Ireland, where it is aiming to emulate its rapid growth in the UK debt sector.
As part of this new initiative, Fortwell has partnered with Dublin-based real estate investment, development and finance specialist Warren Private, who they will work with to source and underwrite high quality construction finance deals in Ireland, of which the Red Rock Developments transaction is the first.
Fortwell Capital's extensive track record within purpose built residential, later living and commercial construction underpins the business' ambitions to play a central role in the growth of these sectors in Ireland. Fortwell Capital is seeking to establish a €300mn loan book and will follow a similar strategy to the UK and is structuring loan sizes of €10mn to €50mn to support the purpose built residential, retirement living / care homes and commercial sectors, identifying experienced developers requiring leverage of up to 75% Loan to Value or 85% Loan to Cost.
This initiative follows the recent upsizing of Fortwell Capital's UK credit line with Cain International ('Cain'), the privately held investment firm led by Jonathan Goldstein, from £400mn to £500mn. Cain is also supporting Fortwell on its Irish strategy.
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Dan Smith, CEO, Fortwell Capital, commented: "We identified a clear and present need for Fortwell's product in the Irish market and are taking this opportunity to propel our next phase of growth in line with Ireland's national objectives to accelerate development activity over the long-term. We have been considering European expansion for some time and Ireland was always our initial objective given its robust market and strong legal framework.
"Through our partnership with Warren Private we are confident of achieving our target of a €300mn loan book by writing between €100m and €150m of new loans in Ireland per year, in addition to Fortwell's UK activity. Fortwell has a highly experienced team and extensive track record in the UK and we have ambitious plans to play a central role in the Irish market over the coming years. The residential sector will be a particular area of focus for Fortwell with current housing shortages high on Ireland's policy agenda, while we are also assessing a number of interesting opportunities in the later living and commercial sectors."
David Kelleher, Principal, Warren Private, commented: "We are delighted to partner with Fortwell Capital to provide construction loans to the Irish residential and commercial real estate sectors. We believe that combining Warren Private's local knowledge with Fortwell's construction lending expertise will create a strong offering for the Irish market, and will enable the partnership to grow a substantial lending platform in the short to medium term. Our experience is that Fortwell are excellent partners due to their client-focussed, proactive and entrepreneurial approach to real estate lending."
Red Rock Developments will use the new construction facility, which is also Fortwell Capital's first loan outside the UK, to power the development of its inaugural hotel, a 113-bedroom scheme on Gloucester Street in the heart of Dublin's central business district, pre-let to Premier Inn and offering panoramic views of the River Liffey and across Dublin City.
Smith added: "We have been selective with our first loan in terms of sponsor and product, with Red Rock Developments boasting an exceptional track record of delivering high quality residential and commercial schemes in the city. The development team has more than lived up to its first-class reputation and has been fantastic to work with throughout the transaction, persistently demonstrating its experience and acute understanding of the local market from day one."
Keith Craddock, Founder and Managing Director, Red Rock Developments, commented: "The Fortwell Capital and Warren Private teams demonstrated expertise on both the finance and property side to close this transaction. They showed a complete understanding of the development market and our specific model. Fortwell's execution processes is exceptionally efficient and the team was a pleasure to work with, enabling us to swiftly deliver on our promise of bringing a brilliant new hotel to Dublin's tourist centre, adding to the many iconic landmarks on the city's skyline."
