Latest news with #KarlRogers
RTÉ News
12-05-2025
- Business
- RTÉ News
Regulatory uncertainty hits housing investment
Regulatory uncertainty is stiffling much-needed investment in residential housing, according to private market specialists Elkstone. In its latest State of Private Markets Report Elkstone - which has invested in LetsGetChecked and Flipdish - said international investors are keen to deploy capital in European property but are not convinved they can get a return if they do so in Ireland. "When we think about interest rates and the interest cost of debt associated with it, as well as inflation and increased costs that are associated with that in terms of development - in most areas across Europe, those costs would be pushed through to the end user and the development would still have the same kind of return expectation," said Karl Rogers, chief investment officer at Elkstone. "In this case, however, because only a portion of that goes through, the cost of the project gets increased and it goes outside of the range of institutional capital requirements - which helps create a slow up in the actual development itself," he said. Mr Rogers said the country was between a rock and a hard place in terms of trying to protect consumers while also trying to encourage enough development to ease housing costs. "Short term there would be more pain before the relief comes," he said. "If there isn't as much supply coming then the price is going to remain higher. "If there was a situation where rental caps were taken away, those costs would be pushed through in the shorter term but more supply would be enabled. After a few years time that supply would catch up and should decrease the prices." The report also highlighted short-comings in other forms of infrastructure - in particular around energy. However it said that while the moratorium on data centre development was a bottleneck, it was actually coming because Ireland was ahead of the global trend in terms of building this industry. And, he said, the problem was creating opportunities in other ways. "We need to increase the supply of the grid and we're doing that through the likes of offshore winds," he said. "So instead of capital going into developing demand assets, capital is going into the development of supply increasing assets." Meanwhile the Elkstone report highlighted a broader trend in the investment market, with larger 'mega-funds' increasingly drawing in more capital than smaller players. This was a consequence of higher risk aversion among investors. "What that means for Ireland is that these mega-funds aren't located here - so the very, very big funds aren't located here," Mr Rogers said. "The smaller funds aren't getting as much funding - therefore it's important that both the State funding continues as well as local, private capital. "Otherwise they're not getting the advantage of that international capital," he added.
Irish Times
12-05-2025
- Business
- Irish Times
Regulatory uncertainty blocking housing investment, Elkstone warns
Uncertainty around future regulations is frustrating investment in Ireland's undersupplied housing sector, investment firm Elkstone has warned. In its latest assessment of the private investment market, Elkstone claimed the regulatory environment here, in particular the system of rent controls, had created 'a paradoxical situation where, despite clear structural supply deficits similar to other European markets, Ireland's development pipeline is stalling precisely when new housing is most desperately needed'. The Government's rent pressure zone (RPZ) system which limits annual rent increases to 2 per cent or inflation (whichever is lower) and which expires this year is currently under review. While the industry wants the rules loosened, Opposition parties claim they keep already high rents in check. READ MORE 'Rental caps introduced with the intention of protecting vulnerable tenants in our tight housing market have created an unintended consequence by capping growth for rent and investments,' Elkstone's chief investment officer Karl Rogers said. 'Increasing construction and financing costs are becoming locked into projects, making many developments financially unviable for developers,' he said. Elkstone's report also warned that the Irish energy regulator's moratorium on new data centre approvals was redirecting potential investment to competing European markets. 'This infrastructure bottleneck represents an opportunity for private investors in renewable energy projects that could alleviate capacity constraints while supporting Ireland's climate goals,' it said. Elkstone, best known for its investments in start-ups such as Flipdish, LetsGetChecked and Manna, said Ireland's economy is forecast to grow at a pre-tariff rate of 4.2 per cent, in gross domestic product (GDP) terms, outpacing the euro zone. Yet this masked 'potential vulnerabilities in an economy heavily dependent on FDI [foreign direct investment], with President Trump's recent trade policies and tariffs creating significant uncertainty for Ireland's multinational-driven economy'. 'These potential vulnerabilities could be counterbalanced by developing a stronger domestic tech ecosystem through Ireland's underfunded venture capital sector, which currently lacks institutional investment and needs a domestic venture champion to nurture local start-ups,' it said.
Irish Examiner
11-05-2025
- Business
- Irish Examiner
Report claims rental cap 'paradox' exacerbating housing crisis
Rental caps designed to protect housing tenants could inadvertently be exacerbating Ireland's housing problem, according to a report by a leading Irish investment firm. Elkstone launched its Private Market Report on Monday, analysing trends in the Irish and global investment industry. The report suggests there is a "paradox" in Ireland which is deeping the housing crisis, with regulation intended to protect tenants stalling future housing supply. It said Ireland's real estate sector shows prime yields stabilising at 5% for offices/logistics and 4.75% for residential assets. "However, international investors are unable to invest in Ireland's residential development sector while the regulatory framework remains uncertain and subject to political pressures, despite an increasing appetite to deploy capital in European housing markets." The report said that the sector is stalling precisely when new housing is most desperately needed, creating both challenges and opportunities for innovative financing solutions. 'Rental caps introduced with the intention of protecting vulnerable tenants in our tight housing market, have created an unintended consequence, by capping growth for rent and investments," said Elkstone chief investment officer Karl Rogers. "Increasing construction and financing costs are becoming locked into projects, making many developments financially unviable for developers. This roadblock will continue to impact new housing supply and ultimately prolong the housing shortage.' Elkstone specialises in investments in alternative assets, including real estate, venture capital, private equity, private credit, and hedge funds. In real estate Elksone oversees 2,700 student beds, 2,500 homes, and 1,200 private rental sector units across Ireland, with developments in Dublin, Cork, Limerick, Belfast, and Galway. Mr Rogers said that the State is one of the few funding options to increase supply, through the Land Development Agency and approved housing bodies' capital allocations. 'To break this cycle, Ireland should create a new long-term regulated vehicle for institutional investment that would provide much-needed certainty on regulation, fund design, and tax rates — establishing a framework that can attract investment capital while maintaining appropriate protections for tenants,' said Mr Rogers. The report said that investing capital into housing, infrastructure, and indigenous innovation will insulate Ireland from US tariffs and external shocks. "By channeling domestic capital toward our most pressing challenges – housing, infrastructure, and indigenous innovation – we can build a more resilient economy less dependent on external factors,' Mr Rogers said. The report notes that Ireland's GDP is forecasted to grow at 4.2% in 2025, outpacing the wider Eurozone's projected 1.4% growth, highlighting economic resilience. The report cautions that while growth projections are impressive, they mask vulnerabilities in an economy heavily dependent on foreign direct investment, with tariffs creating significant uncertainty for Ireland's multinational-driven economy. The report says these potential vulnerabilities could be counterbalanced by developing a stronger domestic tech ecosystem through the venture capital sector. 'By cultivating domestic innovation, nurturing homegrown talent, and creating policies that attract private investment into key areas, Ireland can build a more resilient, self-sustaining economy and lay the foundation for long-term prosperity.' The report also states that energy grid constraints for data centres create investment opportunities. "The data centre moratorium isn't about Ireland missing the boat – it's a consequence of our early success in attracting global tech firms," said Mr Rogers. "This represents a prime opportunity for public-private partnerships to modernise our energy infrastructure."
