Lotus Investment Group, an investment firm located in Dublin and backed by wealthy American investors, has confirmed that it has over €100m worth of capital available to invest in the Irish construction sector, specifically in new house building.
Lotus, which funded €25m worth of projects last year and €40m for this year to date, concentrates on developers who are building ‘ghost estates’, or constructing new developments in the commuter zones around Ireland’s primary cities, regardless of their individual credit history.
The firm’s offering includes structuring finance for developers, funding for real estate purchasers, and a wide range of investment and financing solutions. An average Lotus loan, which is not subject to any regulation, ranges in total from €250,000 to €5m and carries an interest rate in the double digits.
In terms of acquisitions, Lotus investment Group focuses on both residential and commercial real estate in preferred sections of Dublin, Madrid, and other important population centres. Recognising the strong demand for high-quality residential and commercial property development opportunities in Ireland and Spain and the present scarcity of bank financing, Lotus works in joint venture with land owners, developers, and other construction professionals to create financing solutions.
Ireland’s ‘ghost estates’, which look set to be revived by the Lotus intervention, are haunting remnants of the country’s pre-2008 property boom. From the mid-1990s to 2006, large four-bedroom homes were appearing in remote towns far from major employment areas. These places were often called ‘holiday homes’ because the future occupants were not expected to obtain, or even need, jobs.Then, in 2008 with the start of the global financial crisis, it all came to a stop.
In 2009, the Irish government announced its intention to invest €20m to convert ghost estate properties into social housing, but the plan was criticised because there were no basic amenities such as schools and shops on the estates. In consequence, many of these houses fell into a state of disrepair and neglect. In February 2012, a two-year-old boy drowned in a water pool on a ghost estate, bringing the problem of these estates into sharp public focus.