Brexit relocations spur Dublin property boom

London

BANKERS and lawyers relocating to Dublin while Brexit reshapes London's financial industry are fuelling a property boom that's got the attention of debt investors.

Dilosk Ltd, which lends to buy-to-let investors in Ireland, is already planning another offering of securities repackaging its own mortgages after an inaugural deal last week, chief executive officer Fergal McGrath said in an interview. That deal saw orders for three times the debt on sale.

New jobs in Ireland created by the UK's upcoming exit from the European Union "means those coming from abroad are competing with domestic tenants", Mr McGrath said, citing banks including Barclays Plc that are hiring in the Irish capital. That means loans backed by high-end properties leased to financial professionals will be "more prevalent in the next deal" Dilosk arranges, Mr McGrath said.

Dilosk has become the biggest player in Ireland's buy-to-let sector, which lent a combined 272 million euros (S$415.8 million) to landlords last year, up from 214 million euros in 2016, according to figures from Ireland's Banking & Payments Federation. The country's banks have been "tepid" in getting involved after buy-to-let was among the worst hit sectors when a speculative property boom turned to bust, according to alternative-credit analysts Integer Advisors.

Dilosk's 215 million-euro mortgage-backed deal last week saw 700 million euros of demand for five tranches of notes, Dilosk said in a statement on Monday. The underlying home loans were made through ICS Mortgages, which it bought from the bailed-out Bank of Ireland in 2014.

The junior tranche of that securitisation is retained by Dilosk, meaning the company's shareholders including McGrath and London-based Chenavari Credit Partners are first in line for losses if landlords default on their mortgages.

"Everything we've originated is fully performing - it's still a short period but the market is strong," Mr McGrath said. BLOOMBERG