Building Success: The Vision and Teamwork driving Michael Stanley’s Cairn Homes.

Hello and welcome to another episode of the Renata's podcast. My name is Greg Dildjier and I'm delighted to be joined today by the co-founder and CEO of House Builder Karen Holmes. Karen was founded in 2014, floating on the stock market in 2015 and under Michael's leadership has become Arden's largest house builder. In this podcast we're going to talk a little bit about Michael's pre-care and life and experience. We're also going to talk about all things Karen Holmes, how its strategy has evolved over the years and of course how its currently positioned. Finally, we're going to ask Michael to take his Karen jersey off for a few minutes to talk about Irish housing generally, what's working, what's not working and how we can start to make some real progress. Okay, so before that Michael, life before Karen, what did you do and where did you come from and all that kind of stuff? Nice Greg. Life before Karen was very varied. I think I was fortunate that it's been quite a large part of my career in other industries and not always in home building and the son of the entrepreneurial dad and a home builder. Holmes, this person, Joe, has five sons. He's still alive and healthy in his early 90s and pleased he is as his mom still living where we grew up. But it was an interesting home to grow up in. Dad actually left Arden in the late 50s. Arden was in great shape then. He describes it more colorfully than that in terms of what Arden looked like back then and he went to the US. I was born in Boston as my old brother, Joe, I was dad. I think starting a factory and described that as just a horrible experience and wanted very early to own his own business and was a successful contracting plaster, contractor in Boston for many years. I had a couple of kids there, met my mom there, but I think wanted to raise a family in Ireland. Is it around the American? No, mom's a care woman and got it from go away. So good West of Ireland breeding and so. So yeah, came back to Dublin. My dad joined his brother and started a journey of housebuilding over many decades. His business was called Shannon Holmes, which he formed with his, my uncle Sean. And I suppose I lived through a period where that was obviously tough and times were difficult for dad and but then times of great success as well. So you kind of grew up witnessing quite a cyclical industry through this sort of peaks and troughs. So what's happening at the moment during the last number of years around housebuilding is not unique to ours. It's always been challenged over the decades. I think grown up in our home if you were kind of either good at studying or good at sport, you could avoid spending too much time in building sites. And so you did get plenty of exposure to building sites that you can try to avoid it. Yeah. You could end up sweeping out your houses or plaster off a window, but yeah, you did your best to keep busy. So what exactly were you doing again where before Karen happened, what were you doing, what sort of work were you doing before the Karen idea came to you and Alan McIntosh, I think, was the guy you founded it with. It's had us to run into that and how that worked. Yeah. So as I said, I did a lot of things outside the industry. My, I call myself either a formed or a failed accountant, depending how you look at it. I spent my first job as an accountancy practice moved into industry with a company that I used to do quarterly accounts for the two owners of that business where we're incredible role models for me. Pretty smart guys with skills that I probably even appreciated later in my life, what I'd learned at that time, that was a packaging business spent about 17 or 18 years there. And then left that and started getting more involved in my family business, probably close to when my dad was, was retiring. I'd always probably had a hand in or kept an interest in development and with a couple of my brothers and a couple of various sort of smaller development opportunities around mainly residential, not just in Ireland, but also in the UK. Yeah, we kind of formed a business post the merger of Shannon Holmes in the early 2000s. My brother Rob and Kev, you know Rob and I played with him. And so I have to say nice things about Rob, not as golfing and Kev also. So we were probably either smart or fortunate that we decided in the, after having a successful few years in the kind of around 2006 that the industry didn't make a lot of sense to us. And we actually sold a very substantial part of our land bank. So managed to avoid the real downturn of the GFC. I spent quite a bit of time back in industry, which was, which was where I, you know, it's spent most of my career. And just felt there was an opportunity in 2013, 2014 to start thinking differently about how you might form a more sustainable home building model. I mentioned my brother, Kev. He was involved me at that time as well. And indeed in the first few years of Karen, and was very important to our early growth. You could look into raised capital. It was very obvious to us that at that time that, you know, through NAMA 17, I think of the top 20 homebillars in Ireland were gone and had a business and there was going to be an opportunity if you could raise capital to probably scale a business that could be really meaningful. It was obviously also, it was also very obvious that development land was now in the hands of what was what we termed as not as unnatural owners. Financial institutions, private equity houses that had bought loan books would probably keep the assets and the income producing assets for likely to sell the development land. So if you could raise capital, there was incredible opportunities to scale a house building business and acquire land that what would be a once in a lifetime opportunity from both in terms of value, but also location. And so it was about raising capital. We had that kind of been easy at that time. Like people had got burned very badly. 2014. And I mean, the type of, you know, and we had solid offers from US private equity companies to give us capital, but but but the cost was by watering in terms of, you know, you're talking about 15% plus coupons and things like that. So I was very fortunate to meet our co-founder Alan McIntosh. Alan had a lot of experience in raising capital on the capital markets and and and where did you meet him by the way? He went in to see a solicitor who was in my brother's firm in Evercheds. And he said he was looking for somebody to partner with. Okay. On various ventures and art and particularly home building and and he was aware that I was looking for similar capital to try and scale the house building business. So he put us together. We had a meeting for a few hours. Show cans and did a deal. So it was it was that quick. I'm sure it was complete loan for a cycle. Yeah, we get what we got on exception well. And I think without that meeting, I think Karen wouldn't be what it is today. So massive gratitude to Mac for all of that. But so the capital interesting was in the difficult bit. We we pitched the idea to a number of foreign institutions both in the UK and in the US. We went out initially in June 15 to raise a couple hundred million. We actually were oversubscribed. We raised close to half a billion. Can I ask you did was being a public company in integral part of that? Or that just the idea? Yeah. I mean, the alternative capital really was was mainly going to be private equity or get financing, which is going to be way too expensive. So getting if you like public funds albeit it was a cash box. So it was a big last ask investors to trust us with their with their capital. We were very successful. I mean, the market at that stage, I mean, we were already building at that stage for for a little over a year. In fact, maybe I can be brave enough to say this now. But I mean, two, three months before we IPO'd, we launched some heads for sale and couldn't sell us in Gohouse. So I think our first launch after our IPO in June 2015 was in the following September. We sold 11 homes. So Karen's first year's turnover was four million euros. And we'll turn over a billion this year and our tenth year. So quite an extraordinary growth. But the capital piece wasn't as difficult as I expected. People did believe in the Irish reinflation story. They believed that Ireland was on the right track. I'd say non Irish people much more far quicker to believe that I think the Irish community were pretty much shell-shocked at that stage. And for many years after it worked. But I think Irish companies had created, which I hadn't appreciated either to like travel. They had created a really strong reputation, particularly in the US even at that time. So Irish public companies that were incredibly successful, names we all know, whether it's Mourphood, Sir Ryanair, Sir Hage, Paddy Powers, Lyskoson and investors we met. Investors we met said, "Look, we love Irish companies. We love Irish management." And we like the story that our own is on. So if you're going to make if suppose an investment in the reinflation of the Irish economy, a home builder is one way you can get access to that investment opportunity. So it was an easier hard work, but it was an easier journey to raise the capital. The fact that we'd follow on, we raised over 750 million within a year. And within a year and a half we really already invested all of that capital in a high quality land bank. Michael, tell me exactly when you became a public company, 2015? Yeah. Was it June 15th? You were ten years old this year. Were you CEO from the get-go? Yeah, and just prior to that, I mentioned my brother Kevin. He was CCO and an important part of the first few years as well. So there was two of us. We only had about six or seven other employees. And not the easier bit, but the easier bit was raising capital. The more challenges it was, the better. Being a public company, I know it's really hard to even free to remember how you felt then, but compared to the job has changed, not really to what you do now. But back then, the big thing was executing and spending the money wisely. But how did you deal with the sort of investor, the demands from investors and the whole public company machine? Yeah. I mean, the big thing I think I reflect on is getting it right from the beginning in terms of the approach we took. You know, you'll probably get there, Greg, but I mean, there's a history and part of the Irish kind of, you know, maybe fortunate to be of a generation that came from, you know, Ireland being in a very different place economically to having everything to witnessing nearly losing everything, you know, our generation is kind of quite unique in that sense. And maybe maybe that makes it's better for that experience. But equally, the home building sector had gone through an incredible, incredibly tough period. We wanted to, we wanted to genuinely build a business that very quickly gained a reputation for really caring about our customers, really caring about the quality of the schemes we build, how we build places, not just homes. It was really important from the beginning that we built homes of real quality and tried in some ways just ensure that our industry started to earn back respect and be more regarded for quality, you know, homes, people who buy a home, which is the biggest single expense in their life. It's the biggest financial commitment they'll make. And that brings a massive responsibility as a business that's providing that for people. Yeah, did the fact that you had money had a set of them a part of money to spend you, you weren't strapped to the pin of your collar, so you could do things. 100%. 100%. I mean, the great thing about, I mean, the PLC life is not necessarily always easy. I maybe argue year on year, it gets a little bit tougher because, you know, the environment of how PLC's most operation continues to evolve, but it's permanent capital. So it was very clear to me from an early day that they couldn't take the money back. Ultimately, I could get fired and I've said, you know, and management can kind of, investors can lose faith in management, but the capital is permanent. And that gives you an opportunity to think dearly about the business you're growing and think about a business that can be a little bit more longer term in its strategies and its thinking. In terms of what your strategy was then, if you can remember it, it was just build, I guess, but you would have had sites ready to go. I presume. Yeah, we acquired, we acquired, you know, we acquired about a 12,000 unit land bank within the first two years. And a lot of that land was except you were located. I mean, we spent about close to a billion euros on land between 2016 and 2017, nearly four billion of land traded in Ireland in that period. So we weren't buying everything, but we were able to be very targeted. We were also able to go after larger sites that weren't as attractive to others and sites that were more strategic. Bigger sites on multimodal transport links was important to us. Areas of high employment, initially a lot of land in suburban Dublin area, which we saw as a big growth area. So we could be quite targeted, Greg. So now my color, we're a number of years on from that, a lot of water under the bridge. So looking back on us, I know we could spend a long time going through each stage of development, but from looking back on us, what are the best things you've built to make you feel proud now? It's a good question. I mean, it's been a momentum journey, Greg. I mean, I can't honestly say 10 years ago, I thought that Karen would be where it is today, and the fact that it is is just down to the quality of people that I've met and that have joined the journey, not just people who work in Karen. We're going to be close to 500 direct employees by the end of this year. We've had an incredibly talented team. We've been able to attract a lot of talent back from abroad, a lot of Irish people, people forget, and our industry moved abroad in those years, posted to the Celtic Tiger. They are in, they learn skills, learn and work to another very large construction organization. So they rejoined us and brought talents and expertise. The supply chain has been, you know, on our subcontractors, has been probably not understood but a really important part of how our business operates. So we're nothing without our subcontractors. Every day and across the 25 sites, roughly that we were working on currently, somewhere between four and five thousand people check in and work their full time. So you know, a very large proportion of them are full time employees are subcontractors. So the fact that our structure allows them to grow their businesses incredibly important. Most of our subcontractors, I mean our average spend with our biggest subcontractors is 15 to 20 million a year. They employ between 50 and 100 people. These are really skilled home builders across all of the trades. And that would just be unmanageable if they were all employees. Yes, it would because they're experts in their field. You know, so they are a big part of the delivery expertise. But it's across the various trades, if you like, that they bring that skill, sir. In terms of your own employees, are people staying longer than the average? You seem to have a good team spirit. If that's a reasonable phrase, we wouldn't like working for you. Well, I think the enjoy working with each other. It's a very fast-moving business. I mean, there's no doubt that if you think about that growth I mentioned in our business, it's more like something you'd see in a tech company. You know, that pace of growth. Circa, we've grown at a compound rate of about 70% a year, Greg. So it's a very high-paced environment. It's not for everybody, but it's quite a devolved organization. People are empowered to make decisions. We really believe in people working every day and thinking like they own the business. And having that commercial mindset and giving them the autonomy and freedom to do that, with a collective goal, with something we all believe in. And I think that's probably the key to our success also. We're not very hierarchical. We try and the structure is raised me flat in terms of even now with the business of our scale. Every project director who opens a site every morning at 6 a.m. to create a working environment for so many people, they have to think like a business owner. They're running a business unit if you like. And then at Head Office or at Central, we're probably, you know, less than 200 people who provide that kind of support to each of the development sites that operate, as I say, like those development units. I mentioned about what are you most proud of just in terms of, I know every you're proud of everything I would imagine, but anything stand out from today looking back. What about this clon bars and the 7 mils thing? I've read up a lot on this business over the last few weeks just so I could speak to you half coherently, but they sound like pretty interesting and very big. Yeah, I think if you consider our business size, the best way that we can deploy our capital and our scale set is trying to be, trying to deliver more ambitious projects. 7 mils is a new town that we're building in West Dublin. It's kind of to orientated its clandalk and luke and lifi valley if you like between those three. Was it farmland before that? It was partly farmland, but was partly land that wasn't in use. It was designated as a strategic development zone, you know, initially decades ago, but the sheer cost of delivering a town for 25 or 30,000 people was probably just made it difficult to get off the ground. It took our capital, but also, and really importantly, you know, good thinking for government and support. Like, the converse has enjoyed investment from the state through infrastructure investment. What's called your idea funding, which is urban regeneration funding. It's a great example of how private capital component or public capital to making happen. For a little over two years in size, and we live a thousand families living there by this summer. Not only a town. It's not just a building site. It's going to be a town. Yeah. Okay. The most important thing in 7 mils or 7 mils is directly on a rail line and an electrified rail service into Dublin and bringing you all the way into use and station. So it gives people living there. Everybody lives in 7 mils within 10 minutes walk over rail line. I've never done a launch where people actually got the train hopped off and went to a show court. They actually drive there. So, a really good example of, let's say, less car dependent way to develop. But in terms of ambition, if you think about towns, the size of Newbridge or NACE or Port Leash, their towns of 20 to 30,000 people that have existed for decades and longer. So you're trying to create something of that size within a summer, your period, which is quite ambitious. So, like that sounds like a huge job. There must be other builders working on that. Yeah. We're probably about half the overall development. So, Dublin County Council has a substantial portion of land as well and it started building there as well as our two other companies as well who are building a part of the development as well. Okay. So this new town, Clonburrs, 7 mils, is that a kind of a template for the future in terms of what you guys are going to be doing? Will you be liking to do those things rather than one self-smaller developments? Yeah. If we think about the broader challenge and how does Ireland breach that kind of 30,000 units, I mean, beyond, it's hard to achieve that with small, infill developments of 20, 30, 40 homes. Our average development size tends to be between 500 and 1000 homes. So even though Clonburrs are 7 mils as massive, most of our developments are multi-year developments. And I think the challenge for most home builders in Ireland is getting access to those scale developments and getting and having access to capital to be able to take them on. It's a major challenge. There are two large PLCs in Ireland. There's also a number of well capitalised private home builders. But the vast majority of home builders in Ireland are really only on single sites and need to grow organically. So it's going to take quite some time for the industry to scale. Just to finish on the Clonburrs, 7 mils thing, what sort of products, if I can use that word, or obviously everything, you've got apartments, you've got the same IDs, you've got detached houses, tell me about the products. Yeah, it's a very, very tenure mix as we call it. So homes for people of all ages needs to be, to be a town. It needs to include homes that are appropriate for the entire spectrum of people's needs and demographic and also homes for private ownership, affordable purchase, affordable rental, social homes. So again, people who own homes and 7 mils, some of them are mortgaging and buying directly themselves, some of them are getting support from the local authority for affordable purchase. So again, it's a great example of how the state can support an element of housing, particularly those people that require support for affordable homes, but also create the opportunity for people to own their own homes as well. We're building a lot of apartments there as well, as well as duplexes and houses, numerous schools, parks and everything that goes to make a new town successful. Seeing as you mentioned apartments, again, this could be a silly question, but I'll risk it. It would appear to me that people say getting their first house, and I think to own your own home is very important and they kind of really want to own their own house, I think, and there's a sort of a sense that an apartment is second choice after a house. Is that something we could do with losing that connection with it has to be a house I don't want to apartment? No, I don't think so Greg. For me, it's not either or. There's only a couple of things that kind of genuinely bug me about the conversation and housing and one of them is people who seem to think we need to tell other people are to live and the type of homes they live in. Look, yes, of course, the dream of a nice home with a back garden and everything that goes with it is something that's really important to our people and something we do a lot of. It's a core business. A starter homes is pretty much what we've built our successful business on. But what it doesn't recognize is that Ireland has to also evolve the way it builds for many, many reasons. We read every day what's happening to our planet and we know how expensive Ireland not hitting its carbon target to our soul. Sustainable development is really important. So part of the mix has to be development that works for the economy and how the economy is growing. If I look at the last 10 years, since we IPO, the working population in Ireland has gone from too many working people to 2.8 million working people. So when people criticize the housing crisis, they have to appreciate that we didn't know this is going to happen. So genuinely, and our population has grown massively, working populations grown massively. So the response to that over the last 10 years has been a largely building more low-density housing in suburban areas. It just simply is not a sustainable way for us to develop our cities. And equally, we've built most of that low-hanging fruit as well, Greg. We're running out of land. In fact, we are out of land in large parts of suburban cities to develop to build more low-density housing. So if we want to build a future for the next generation, it must be a balance of more of that housing, but also in apartment, apartment's no close to employment. I mean, one thing I've been quote on before, and I think it's worth emphasizing, if you think about Dublin City Centre, just inside the canal, it's our business district. In the last eight, eight, nine years alone, we've built enough office space for about 125 to 150 thousand working people. Complete it. Foot finished. And largely well occupied. In that same period, we've built enough apartments for 25 thousand people. So as a result, would you argue that our city is better for that? I'd argue not. I think we lack the important pass of supervision that living cities have, where people live there and care about the environment and make it a more secure environment for people to live in. So we just have to be careful at the pattern of development. I did a results recent as Greg. I was, this was quoted widely in the number of newspapers that, you know, Michael Stanley believes that apartments is the only answer. That's probably not been true, but a lot of people said that. And it's certainly not what I meant. What I probably meant was that if you give somebody a choice between an apartment and a house, they will probably prefer the house. If you give a young person a choice of the box bedroom in their parents room or a two-bed apartment, you know, in a beautiful part of Dublin, I think they take the two-bed apartment. So there's an element of needs most in housing as well and what we're offering the next generation. We need to offer them a choice. Yeah. Michael, you're just a month past your results, great results that they were. Could you just remind us of the key numbers and things coming out of those results and obviously have been speaking to investors. So you'll have got their feedback and all that and it tells us how well that went. Yeah. The feedback from investors on Ireland is incredibly positive and interesting. Greg Ireland has seen a little bit of a beacon at the moment. I mean, you wouldn't think it if you listened to the dollar. No, but you'd hear it internationally, particularly in the UK. They're going to some tough times. If you think about even how it relates to home building, the home building sector in the UK is incredibly well capitalized. A lot of major public companies, but the government doesn't have the wherewithal or the capital to support them from terms of their ex-jacker balance and what they've available to the Ireland is probably just like the opposite challenge where we have a very well, you know, a government that can afford to support home building. We probably just lack an industry that has the capital and scale to support it. So it's quite a reverse almost to what's going on. But they like Ireland. I think for me, what are the most important things about our numbers at the moment? 10 years in business, Greg, I suppose we're going to hit two and a half thousand units this year. We IPO'd with a target of about a thousand. So it's good to have kind of breach that. So it's all about output now. I think the way government needs to continue to measure policy effectiveness is in the actual number of finished units started to be completed. It's a really important measure. We've seen some data and starts and commensions and things like that. And while they're important indicators, it's really all about completing homes. Sorry. Why is that such a difficult number? Because political problems, I know recently, but surely that should be, and I should be able to see that every day on a screen, that's the number that have been completed. It was kind of a bit vague as to what we were going to do. I think to be fair, there is a lot of schemes that were commenced or started, but unless they had realizable demand at the other end, which doesn't just come from people with mortgages, but it comes from other, let's say, whether it's institutional investors, arms of the state, et cetera, et cetera, whether that's the HB sector or others, certainty around a lot of those projects probably caused a bit of a problem. It's probably fair to say that that transition of going into a election period, that's certainly improving. I mean, Ireland is the only country in Europe that's returned to government. I think that's incredibly positive because there's lots of good lessons. Lots of good stuff has happened, I think, in the last five, six years, but obviously we haven't got it all right, but as a private sector, but also from a policy perspective. So it's important you don't lose those lessons, and I think the incoming government has a real chance to get the balance right. There's no doubt that the political will is probably as high or as strong as it's ever been. It's been very strong, but the political system is still very adversarial about the whole thing. International capital, it appears as absolutely essential yet the opposition have no interest in that and consider it vulture funds and all that kind of stuff. It's very, very adversarial, but I think the government are as committed to this as they've ever been and more so, I think, in the last few months. Yeah, I mean, the total government budget, and you have to look at capital versus current, but if you look at combined, you're looking at some routine five and six billion a year, it's a north of 20 billion challenge just to get to 40,000 homes. So the vast majority of the capital is going to have to come from not just institutional capital, but the mortgage market, people's savings for private homes, etc. What the private sector needs to do is it needs to better illustrate value for money for the state because the biggest challenge is the cost of housing is increasing. And that's a global challenge. And you ask me, what's one of my proudest of in terms of care and achievement? It's probably the number of affordable homes we're building. If you look at that, that's a global challenge. So I was, as I mentioned, Mipham, I was, I was dealing with a research for that. I read it. I read a UN housing report that analysis basically put the challenge globally as up to 40% of people globally would require affordable housing by 2030. And the reason for that is that on 40, the cost of building homes globally is not going down. And the vast majority of the materials we use are natural resources, labor costs are increasing. Regulations are increasing. Very positive thing. What expensive thing? What can be expensive, yeah? So what you have now is a situation across Europe, not just in Ireland where the cost of a home is roughly eight to ten times average wage versus the four to five times that maybe you and I were looking up to see when we were younger. So what that means is that governments now that maybe previously would have looked at social housing as something that the government should provide better performing economies and governments that are rethinking further ahead are looking at the affordable sector. And they're looking at the people who are not earning enough to be able to maybe get access to mortgage and buy their own home, need state support. And equally, their salaries are not low enough to need full, like said, social housing. That's affordable because of state intervention. That's what makes it affordable. And the private sector's role is to ensure that if that support is being provided that we're delivering homes at competitive price points, we're delivering them as affordable as we can. And I believe we are doing that with partners like the LDA and a lot of it with the affordable housing associations who are incredible organizations. They're doing a big part. If you look at last year, I mean, housing output fell last year as you knew. So if you look at housing output falling by 6% or 7%, I wrote the group by 30. So certainly we're an outlier in the market. Interestingly, the HB sector, the other sector that massively grew last year, they delivered nearly 6,000 homes. So I think if more capital is provided for affordable schemes, be it affordable purchase, cost rental and kind of funding. I mean, to give you one example, you may have read this. And again, it's back to people like apartments. There was approximately 40 units in the Google, part of the Google building offered for affordable rental recently on a week ago, 2.5,000 people applied for 40 apartments. Last year, there was 3,000 cost rental homes. I'm sorry, do they have to apply by getting approval from the stage before they apply? How does it work? To the housing association. Okay. And there was qualification criteria in terms of whether they were working in the area, whether they lived in the area. What they were earning, all of that. All of that. Yeah, it has to be in a certain salary ban. But cost rental last year, there was about 3,000 homes produced in Ireland for cost rental, which is basically it's your market rent less a discount of about 25, 30%. And the government puts that. And the government puts that effectively. But the government owns the product. Okay. I'll be it through the affordable housing association. These are long term affordable owned homes by the state. Is there any worry? Would you have any worry, like looking down the road, that the government would overreach them on some of that and get them thousands into trouble by solving this huge problem and becoming the funder of them all? Absolutely not. Because the Irish government currently probably owns the lowest percentage of our housing stock of any developed economy in Europe. In most better form and economies in Europe, the government owns a bigger portion of housing stock. And if it owns a bigger portion of housing stock, it can have a better influence in the market. It can have a better influence on the affordability of the market. So I think it's really important that the government, the Irish government today owns about 7 to 8% of the belief of housing stock in Ireland. Way too low. Okay. Michael, seeing as you have a beautiful vehicle, Karen PLZ in situ and it's doing very well and we've heard your numbers and performance. Given the huge need for international capital, surely you have to consider raising more capital in terms of the huge need that's required raising more capital and building out some of the stuff we're talking about. Now we've a very strong balance sheet crank. We're fortunate to have that. We just increased our debt facility somewhat, but again within the sort of pretty conservative range that we tend to use in our business. We have a lot of equity. You know, our balance sheet is available to us over a billion euros. So I think our growth is well supported but our balance sheet areas where we could grow is maybe through joint ventures where and I touched on some of those opportunities with state partners as well. Even local authorities, the land development agency, AHBs, there may be ways for us to sort of attract institutional capital that might want to co-invest with a delivery partner and then potentially also an army of state. So there's ways for us to expound our business without messy going back to the market. Do you have any sense of what's the nice, are the right balance for you in terms of sort of state stuff and your private work? Is there, yeah, we'll actually, our biggest growth this year is probably going to go flip back to delivering more starter homes. It's taken us a while to unlock more land opportunities. The interesting thing about Ireland and I know you know John Reynolds are going chair and he's a good friend here as he just sent me an article this morning actually. He likes to remind me every now and again of some of the things that are going on in the world and the macro. But the interesting that John sent me this morning was and he, when we look at land, in Ireland, we're not very, we're not very densely populated. When you compare, I think it's about 79 people to every square kilometer in the UK. It's nearly 300 or something like that. So you would think land shouldn't be a problem, but we don't zone enough of development land and we don't have enough of service development land. So the challenge for us in many homebillars, particularly the smaller ones, has been getting access to development land in locations that are well serviced and on transport links. So that's something we've had to reinvest a lot in, is more land, particularly in that starter home market. So the bias of our growth or the sort of focus of our growth for the next couple of years is going to come more in that kind of private starter home market. Why would continue to do quite a lot of businesses I mentioned with those excellent housing associations and others that we do business with on the states side? You're going to be a busy man. Michael, I'm just the final section here on the sort of general housing market and we're asking you to take your care and shirt off for this one. Obviously there's so many moving parts to this. It's extremely complicated, as I said, I was reading about this and there's no one answer to anything. It's very, very interlinked, but it's probably the most discussed topic. It's obviously massive in the doll and really divisive, really divisive and adversarial, but hardly a pub that you go into. Everybody is talking about housework. So it's a very unpleasant environment to be working in. It's got every given out and morning and you've made international comparisons which make us look pretty good, but this is a bad vibe around housing and people. So, in terms of you guys, do you feel part of that at your building house and you're building a lot of houses and you're doing extremely well? Do you feel you're kind of wrapped into the property developer, a bad reputation thing? Is that you conscious of that? Yeah, I think we were at the outset. I think we were conscious as we started the business that we wanted to try as I said, earlier Greg, to build a reputation and that Karen, hopefully, over time, if somebody was selling a Karen home to the market, having bought it off us five or six previous, the first line in the advertiser would be built by Karen. That itself would be, if you like, a badge of honor, that people saw real value in the homes we built. So, I do, I believe that I can understand why it's divisive. I can, and I can particularly understand why it's a challenge for the younger population. And I think they're the people that we've got to think most about. I think my own lads are in their 20s and I listened to them and their pals and we're not necessarily creating a fair situation for housing in Ireland. If you think about it, Greg, I mean, in just an impure home ownership, you know, 5% on the 35s in Ireland on their own home, 5%. That's a third of what it used to be. So we are definitely causing a major issue for younger people. We know about the number of people forced to live with their parents. So I think more needs to be done. And therefore you can understand why it's divisive. But equally, I'm not by nature a negative person. This is something that we can fix. I think the incoming government need to have both a multi-year strategy, a bit like how we think about our business. They've got to understand where they're going and I think and I think they do. But you also need the running repairs. And for me, there's a number of things that could be done very quickly and are being done, I believe, by the current government, to try and ensure that while you're trying to deal with the more strategic things, like land availability, like planning, the more, the bigger infrastructure deaths that's required to be resolved. You can do lots of things. For example, most government policy, particularly on capital expenditure, are annual allocations. Now, when you're trying to build large mixed-hound your developments, they're multi-year developments. So for me, if you look at a lot of these policies, you need to think about a multi-year strategy. And you need a capital commitment for that period. If you have that commitment, then institution capital will also invest. And that capital doesn't need a big return, by the way. It can be quite attractive capital. It's quite happy to accept a lower return for that more secure investment of our own. It's funny. I was about to ask you if you were the minister for housing and can implement just three changes, just three to housing policy. What would they be? And I'm guessing they probably answered one of those. I think the real big ones, what is going to open the gates a little bit? Let's get some flow into that. I think it's a mixture of those kind of running repairs and the more strategic. So for me, the most important thing is to look at each of the different incentives that relate to different tenures and understand how they would better work together. There can be quite a bit of silo thinking and silos within policy. But if you're trying to fix a housing crisis, you've got to deliver a large mixed-hound developments. That can include homes that are for private ownership. It has apartments, but also for rentals, for affordable rentals for social, just due to accommodation crisis is a big part of it. Step down opportunities. We've a challenge around appropriate elderly living and opportunities for older people to be able to trade into more suitable accommodation. The Irish housing market is very illiquid. People don't move. That's a big, big challenge for us. People stay in the home that they grew up in. My mum and dad are very fortunate to live in a referendum or we grew up there since the late '60s. The challenge that I present, though, is that you don't get younger people cycling through to family homes. You have a very low turnover rate. That makes new housing stock even more challenging because you're trying to build more homes. I talked about this recently down in Mipham. If you think about it, it's quite extraordinary. But Ireland actually has enough of bedrooms to have its population. In fact, we have way more than we need. Ireland is a country populated with larger homes with lots of bedrooms. Now, fortunately, it's empty ones. It's not legal to knock into your house, Greg, and say, "Can I sleep in one of those very bedrooms?" Therefore, we need more housing units. That goes back to that point about one or two bedroom housing units and how that's so important. I love it's about Nick. If I was looking at policy, I would genuinely be trying to do everything I could to try and support the right type of housing as well. I would also look at how the various policies that are working, but there are probably sub-scale Greg. They're only starting to really have an impact or scale and how they work together. They're probably some of the key things. A lot of discussion is about the housing market generally and the arguments are about housing market. I'm just some notes here, rental owned apartments, houses, rural, urban, social, private, students, elderly, all sizes, one bed, two bed, three. There's so many different segments of the market and different markets within a market. I guess what you'd like is the focus to help the, particularly the affordable stuff and the younger brigade. If people are fortunate enough in Ireland and the success for economy and particularly foreign direct investment, it's a large portion of our young population are in good salaries and it's practically full employment. Most of our home buyers are largely two incomes anyway. We rarely sell a home to somebody in a single income. Two people are a couple or whatever are fortunate enough to be earning 90, 100,000 euros. They're not necessarily being left behind because they can afford to access a home and particularly with support like the first home scheme and help to buy. Their challenge is probably more around availability of products and that land challenge I mentioned earlier. But we've got about half a million people in Ireland earning above 45,000, which is roughly the cap for social housing and less than 80,000. The home ownership rates in those 500,000 is very, very low, single digit. They're the people that are working in all of those key workers. They're the key workers. They're the two and a half thousand people that applied for those 50 apartments in the community. The industry aligned to provide that product for them. I know you're clearly doing it. You've got a couple of other big names, but you've got all the little, can everybody sort of start to focus on those so we sort of fix the biggest problem. Yeah, I think so. It's going to require. It's going to require, you know, trust between the private sector and the government. Do you think it can change? But like this has been sort of going on and on and on. It's frustrating people for so long. Will there be this? We're sitting here this time next year. Would you be saying, look, can you see now it's dramatically changed because of the government policy and the sort of will to do it and they've cleared the, what about planning by the way? It's not always going to be a problem. Or can we change anything dramatically there? Again, the planning system and the new planning act will take time to bed in, but we still have circa 30,000 units with planning permission that haven't commenced in Ireland. So, so, you know, look, as I said earlier, Greg, I don't, I tend to look at last half full. I'm not saying that overnight we can increase to 50, 60,000 units, but I think over the next five years, yes, we can fix this challenge. Ireland is a great country for building. You know, if you look at the last number of years, we have built a massive volume of hotels. We have built a lot of office developments. We're building data centers, et cetera, et cetera. So something we can do. Some things work. Yeah. So, so we just need to balance that output. And we need to, we obviously need to prioritize housing. But yeah, I think it can absolutely improve. And I mentioned that trust point only because it's in, it's responsible. It's really important for us in the private sector to prove to government that we can deliver quality homes at value for money. And we can manage our cost base. And even though that's higher and that, and then that the government and particularly, you know, not just elect to go to government government, look, look at the long term value of that housing. I think the problem sometimes with housing, it's often looked at us, you know, for me, it should be considered part of the state infrastructure, particularly if it's affordable or social. It should be considered the same way as the other things that you need to provide your society to prosper and for the economy to do well. I think the challenge has always been that housing is seen as, as you said, something that people invest in. It's also a very emotional topic. But I guess I'm being influenced as, as indeed, many people are by the media coverage of the topic and what goes on in dollar and the whole thing is given out in moaning. And, you know, it's very, it's very unpleasant. And then the media report on that. And so what Joe Public is consuming is sort of bad. Like the government are failing. The industry is failing. Everyone's failing. And that's, you're in the business and you're not deviating because of any of that noise. But I think people do feel a bit tired of the whole thing. It's been discussed and it would be nice to see some demonstrable progress. Whatever number our data that would be like, I don't know what number says you're in a housing crisis. I don't know what set of numbers says that. I know there probably are some, but what number says you're not in a housing crisis anymore? What number would that be? I think being realistic. If we can get closer to 40,000 in the next year or two and grow that to 50,000 units over the next couple of years, it may be shy of where, you know, estimates are. But I do think getting to 50,000 units could put a serious dent in the problem when I think it could bring down the cost of housing. We need to, you know, it has to be affordable. Yeah. You know, it is possible. You know, we have gone from a period where, you know, Karen started. I talked about our very first launch where we saw the Leven Homes. We've gone to a situation now where we open up a new launch on a Friday and we close it two hours later because we can't deal with the level of inquiries. So the country has changed as well. I think people hopefully have to recognize, you know, the point I made earlier about the size of our population, the very sad situation that happened in the last couple of years in Europe and again, more refugees have come into our own as well as natural population growth, the age of our population as well. And if we're talking about, you know, we're reflecting on what's in media and let's say in in dollar and, you know, I just don't think younger people have the big and a voice, you know, a lot of those, a lot of that commentary comes from people that, you know, let's be honest, there are probably often fortunate enough to already own their own home, if you like. And if you look at the concentration of wealth even in Ireland today, it's very much in, you know, above 50 years of age and beyond, you know, we've a massive concentration of home ownership in those older years and also wealth. So that's not, you know, when you reflect or reflect and how well our economy is done, that's not that's not equitable. It's not fair. And I think from a housing perspective, anything we can do to rebalance that is really positive, which is why I think the focus on policy and output for the next number of years has to be start our homes for first time bars. Yeah. And it has to be affordable accommodation and the only metric that matters genuinely is home completions. That's the only metric that really matters. Number of units delivered monthly. And as you say, it's not that hard to track that. Yeah. But a lot of the noise can get in the way. Yeah. And for this podcast, because I wanted to speak to somebody who knew what he was talking about regarding the whole housing thing. And if certainly done that and you're, and to be fair to you, you've taken the Karen Jersey off and sort of talked from some other perspective as well, which is great. I knew it was going to be good chat. I really enjoyed it. I hope people get something out of it. And you've talked nicely about Karen too. So maybe they're going by some Karen houses as well. Thank you, Greg. It's been really good chatting to you. Thank you, Michael.