Residential Property Development – Cork Region
Tom Collier
Tom Collier

Tom Collier is a Director of ITF, a residential development company founded in 2012. He has 30 years of experience developing residential and commercial property in the Irish and European markets. Tom graduated from UCC with a Degree in Dairy and Food Science and worked in the food and agri sector before moving into property. He founded Hollycourt Developments in 1992, which developed mainly residential housing throughout Ireland, but primarily in the Munster region. He has partnered with medium sized building companies within the region which has proved to be a very effective strategy that has now been adapted by ITF. Tom is an investor and director in a range of other businesses and is a director in a number of charitable organisations. Cantor Fitzgerald raised loan note capital for two residential developments with ITF in 2015 and 2017.

Tell me about ITF?
ITF was born from the coming together of a developer and a house builder. We started small in infill locations where we could see there was pent-up demand. This ensured sales risk was kept low. From there we focused on acquiring sites in unfinished estates and also on acquiring new greenfield sites in strong locations. We have kept our focus on Cork city, where we believe we know the market best and where we have a solid network and good quality development opportunities.

From a personal perspective I established ITF on the same set of core principles that have guided me throughout my career in business. I have worked in a variety of industries ranging from food additives to farming and from forestry to retail. In each business I have found that hard work and attention to detail are essential to making them successful. In ITF my focus remains on those core principles but also on passing on to the younger members of the team the lessons that I have gathered along the journey.

ITF appears to have focused on the high-quality end of the residential market. Do you see this as a particular niche for ITF?
This was the market segment we initially focused on as we could see the challenges facing first time buyers in obtaining mortgage approvals. Our research was also telling us that there was a buildup of people wishing to move to larger and better quality homes. This segment of the market had been underserved for the previous 10 years and there was a good pool of people who were now in a position to afford a higher quality house and had families that needed more space. As always with residential development, location is key to ensuring sales, and our focus is very much on identifying quality locations where we can provide a top quality product which will create a desirable address.

What do you find are the biggest challenges in bringing through a housing development from concept to delivery?
I think we have similar challenges to most players in the residential development sector. Sourcing affordable debt finance and ensuring that we have sufficient equity in place to bring the project through to successful completion are the biggest challenges.

What gives you most satisfaction in the delivery of housing product?
As a business owner, making money is obviously a key driver – the comfort of knowing that our business is running effectively and that we are making the right decisions in how we operate is very important. In this context, getting to the end of a development and being able to confirm that we turned a profit is a big source of satisfaction.

Positive feedback from buyers also means a lot. Investing in a house is often the biggest purchase decision people make in their lives. To deliver a product that people are genuinely happy with is a great source of satisfaction – knowing that they are happy in their new house.

Which aspects of management do you see as most important in running the ITF business?
Like all businesses, keeping a handle on costs is really key. We run very stringent cost control processes at ITF. Equally important is management of the various stakeholders involved in the business – within this I would include investors in the business and customers that are buying our houses. Buying a house is a big step, so a certain amount of “hand-holding” through the process is really important to make sure that the customer is comfortable with the process and ultimately happy with the final product.

Will ITF continue to focus on the Cork market?
For me, Cork is definitely where our focus lies. The last decade has left much pent-up demand from property purchasers and renters alike. I strongly believe there will be good opportunities for development in this market for the next two decades. Cork is a city with a strong level of population growth which will drive requirements for additional housing. Near term levels of employment generation are very positive for Cork which will also drive demand and affordability.

Many market commentators continue to predict ongoing house price inflation over the coming years. What is your view on where houses prices will go?
In my view the rate of house price inflation will level off over the short to medium term. House prices, at the end of the day, must be affordable. While there may be some further upward pressure, affordability will ultimately contain how far this pressure can push prices.

Production of new housing stock has been a national challenge. What do you see as the biggest obstacles to overcome in order to bring more new homes to the market?
That’s a big question with many contributing factors! Among the key challenges are:

  • Availability of finance for smaller developers
    Development of housing stock in Ireland has always involved small and medium sized development firms adding a significant proportion of annual output. The challenge will not be overcome if we rely solely on a few very large scale development firms.
  • Bonding
    All developments require a bond to be paid or lodged with the local planning authority. In the past these bonds were sourced from insurance companies which provided bonds on behalf of development companies, in exchange for an annual payment. Since the financial crash these insurance companies have largely left the market, meaning that development companies are faced with the challenge of providing a cash sum to the local authority before they can commence work on a site. This additional cash requirement is a significant burden on development.
  • Conveyancing process
    The process of transferring land ownership in Ireland is slow and costly. Other countries appear to have much simpler systems. This is an area that needs to be tackled.
  • Tax
    The money that Government takes in all kinds of taxes, levies and bonds is something that ought to be debated in public. I am not convinced that the public appreciates just how much the state generates from each house that is produced. This key element of the cost of a house is often ignored in the debate on the cost of housing.

Finally, do you think the vacant site levy is having an impact on bringing more zoned sites to market?
I’m not sure it has bitten too many as yet. It may have more of an impact into next year as land holders start to receive bills from the Revenue Commissioners.

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