Friday 21 October 2016

21pc gross yield set to top the lots at July auctions

Donal Buckley

Published 14/07/2016 | 02:30

Four bumper auctions during the last two weeks of July will see a number of agents offer over 100 properties, including commercial and residential investment properties in Dublin and around the country.

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Double digit gross yields are flagged for some of the commercial and mixed use properties, with one guide price suggesting a yield of more than 21pc.

The largest of the auctions is the O'Donnellan & Joyce auction in Galway, at which 60 lots will be offered, with combined guide prices totalling €8.085m on Friday, July 22. Commercial properties will account for 16 of these lots.

Its highest yielding investment is a ground floor retail unit, 1 Millrace House, Chapel Lane in Tuam, Co. Galway, which is currently rented to National Schoolwear Centre on a 25-year lease from 2006 and it earns €16,000 a year. At its €75,000 guide price this suggests a 21.3pc gross yield.

The next highest yield is the 20pc guided for Unit 16a Sandyford Business Park, Bohermore, Galway, an office let to ServiSource for the past seven years. It is on a month to month rolling lease earning €15,000 year and its guide price is €75,000.

The most valuable investment property is a block of six apartments at 13-18 Durabhan in Roscam, Galway, which are fully let and earning €59,000 a year. At their €640,000 guide price their gross yield would be 9.2pc. They are evenly split between three and two bedroom units.

A mixed use property at Bridge Street, Athenry, Co. Galway, earns €21,000 a year from a takeaway outlet and one of two overhead apartments. At its €180,000 guide price the suggested yield would be 11.66pc. One of the apartments is currently vacant, so a purchaser might increase the yield.

A retail warehouse, Unit 12F, at the N5 Business Park in Castlebar, Co. Mayo, is let on a four-year lease since October 2011 and earns €18,000 a year. At its €110,000 guide price it may yield 16pc.

One of the more attractive development properties is a parcel of 6.09 acres with frontage on to the pretty Spiddal Beach and promenade overlooking Galway Bay and bordering the R336 main Spiddal to Galway Road. It is a zoned village centre permitting a mix of uses, including community associated with residential uses, and has an asking price of €120,000, or about €19,700 per acre.

In Galway City, which is currently experiencing an office shortage, a 147 sq m mid-terrace office, Unit 6D Liosban Business Park, Tuam Road, generates €15,000 a year. At its €135,000 guide price this suggests a gross yield of 11.1pc.

The DTZ Sherry FitzGerald auction on July 27 at Leopardstown Racecourse, Dublin, will comprise 13 lots, of which eight are industrial type properties. Its 10 commercial properties have combined guide prices of about €1.75m.

The most valuable of them is Block A, Unit 1A, Dunshaughlin Business Centre, Dunhaughlin, Co. Meath, which has a €200,000 guide price. This end of terrace industrial unit extends to 117.8 sq m and includes an office element arranged over two floors with kitchen facilities at ground floor. Its first floor office area accommodates open plan and cellular offices.

A second industrial property, Unit 2B, Century Business Park, St. Margaret's Road, Dublin 11, extends to 428.46 sq m, has a €195,000 guide price and earns €26,793 in annual rent. This suggests a gross yield of 13.74pc.

Bayside Auto occupies its ground floor, which accommodates a car body repair shop, music recording studio and waiting room area. This tenant also installed a mezzanine floor which accommodates a dance studio. A second tenant operates Tommy's Dance Studio on the first floor.

One of the more unusual properties is a vacant former secondary school, St Joseph's in Tulla, in East Clare, which has a €175,000 guide price.

The property comprises a site extending to 2.46 acres, of which 1.3 acres is taken up by buildings. Agent Diarmuid McMahon says it is zoned for community use. This suggests possible potential for a pub, crèche, doctor or dentist's surgery, health care centre, education, leisure centre, gym, office, motor sales or a shop subject to planning permission.

On July 19, Real Estate Alliance will auction 12 lots with combined guide prices over €830,000 at its REA Munster auction in Limerick, including a student investment unit and two commercial properties.

The most valuable commercial lot is 46/47 Catherine Street, Limerick City, formerly known as The Grand Marnier Hotel.

Located at the end of a Georgian terrace, it extends to 348 sq m and is described as "suited to builders or investors looking to completely refurbish and achieve the strong rents which are available in this vicinity". It has a €90,000 guide price and is in an area where refurbishment properties can qualify for 'Living City Initiative' tax incentives.

Another commercial redevelopment opportunity is offered by 4, John Street, Limerick, a three-storey mid-terrace red brick fronted building which extends to 210 sq m, with a €41,000 guide price.

The Leinster Property Auction, organised by IAM-Sold will offer 20 properties for auction on July 21 at the Clarion Hotel, Liffey Valley, Dublin. The most valuable of the three commercial lots is a mixed use property at Furze Hall in Maddenstown, on the edge of the Curragh, in Co. Kildare. It comprises a retail unit in shell condition and two apartments in need of refurbishment. Its starting bid is €65,000.

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