Auction activity moves west as Dublin deals slow
Galway appears to be the centre of auction action with no less than three estate agents hosting bumper property auctions in the city averaging one per month and at peak season there can be two during some months.
This contrasts with Dublin where only two agents host bumper auctions and both of their catalogues are dominated by properties from outside the county.
The contrasting tale of the two cities is partly down to prices. Because prices are higher in Dublin and there's more at stake, buyers prefer the private treaty route which allows them and their lawyers more time to perform due diligence.
Tomorrow in the latest of the Galway auctions, 29 properties including eight commercial and development properties will be go under the hammer with DNG Maxwell Heaslip and Leonard (DNG MHL).
This follows an auction last Friday when O'Donnellan & Joyce sold 18 properties. Then on May 14 next DTZ Sherry FitzGerald will auction 16 properties, all but two of which are commercial or development properties including five priced over the €300,000 level.
In June both DNGMHL and O'Donnellan will each hold auctions, the former on June 5 and the latter one week later on June 12 when Colm O'Donnellan managing director of O'Donnellan Joyce expects to have 70 properties for sale.
At tomorrow's auction DNG MHL's most valuable commercial property will be Unit 1, Westgate Business Park, Ennis, Co. Clare, a partly let 10,000 sq ft office building with a €175,000 AMV. The next most valuable is a licensed premises, known as Keane's Bar, Athenry town with a €140,000 AMV.
Also partly tenanted is a commercial premises at Thomas St, Castlebar Co. Mayo, a 5,274 sq ft terraced office building in two units with a €110,000 AMV.
But the highest guide price at the auction goes to a bungalow on 0.27 acres in Freeport, Barna which, with views over Galway Bay, has a €330,000 guide price.
On May 14 the most valuable property at the DTZ auction will be Railway House, Station Road, Loughrea, Co. Galway, a mixed use retail and office building let to a government tenant and producing a current rent of €71,240 per annum. With a guide price of €700,000, this suggests a gross yield of more than 10pc. The property comprises retail and office accommodation extending to 4,100 sq ft on the ground floor, 9,924 sq ft of first floor offices and a 7,917 sq ft second floor in shell and core condition.
Railway House also accommodates a 4,000 sq ft ground floor retail unit occupied by Corry's, but this element of the building is separately owned and is not part of the lot which is being auctioned.
In Galway City centre two vacant retail units at Bella Roma, Aras Guaire, are being sold as one lot with a €500,000 AMV. Located near Eyre Square at the junction of Bothar Ui hEither and Forster Street, the 6,000 sq ft ground floor property has the benefit of a strong corner profile and dual frontage.
The second most valuable lot is a 6.7 acres development site on the Coast Road, at Roscam, Oranmore, with a €600,000 AMV. It has full planning permission for 13 detached houses some, if not all, of which would have views over this eastern side of Galway Bay.
Also in Oranmore an interesting 12.76 acre property with a 7,814 sq ft commercial building, at Moyvilla, has a €350,000 AMV. Situated on the N6 Galway-Craughwell road the property comprises Mother Hubbards restaurant and The Green Briar Pub which are being sold with vacant possession and a school which is paying an annual rent of €12,000 per annum on a 3.24 acre site and an adjoining plot of agricultural land which extends to 9.52 acres.
A filling station with a €300,000 AMV is one of six Loughrea lots that will go under DTZ's hammer and two of these are houses.
James Heaslip of DNG MHL says: "auctions have always been part of the culture in Galway and in recent times the volume has grown a bit more. Perhaps unlike Dublin, first time buyers as well as home owners who are trading up are more willing to bid at Galway auctions.
They prefer the auction route because within minutes of making their bids they know if they've been successful."
Unlike private treaty sales which can drag on, with auctions they quickly know where they stand.
Last year O'Donnellan & Joyce offered 250 properties for auction and report a 90pc success rate.
DNG MHL auctioned off a further 100 properties in 2014 and 30pc of those were commercial. The most valuable lot was a half acre development site in the sought after area of Taylor's Hill which sold for €500,000. The cheapest was a water treatment plant on Inis Meain, one of the Aran Islands which sold for €10,000.
Colm O'Donnellan points out that the auctions are not confined to Galway properties or to local buyers.
They can include properties extending from Sligo to Limerick and eastwards to Athlone. Its most valuable commercial lot last year was a 16,845 sq.ft. commercial building on a site of 1.59 acre site at Breaffy Road, Castlebar, Co. Mayo which sold for €470,000.
As well as packed rooms, the firm also attracts bidders on line and at its auction last December about 2,000 people logged in to see the bidding. Both O'Donnellan and Heaslip agree that the key to successful auctions is getting the price right. "Buyers become disillusioned with auctions if they see that the reserve price is way above the AMV guide price," O'Donnellan explains.
It also helps to have lots below the €200,000 level as these attract competitive bidding by cash investors.
"Investors are looking for properties which offer a rental return and which also have potential to increase the rental income.
Robert Ganly of Ganly Walters says the bumper auctions are not confined to Galway. His firm will auction 12 nationwide properties next Tuesday in eight lots at Leopardstown Racecourse and they plan seven more auctions up to November including two in June, one of which will take place at Mallow Racecourse in Co Cork.