Wednesday 28 September 2016

Yields spike at the latest Allsop Private auction

Donal Buckley

Published 19/05/2016 | 02:30

The corner property at 80 South Circular Road sold for nearly 25pc over its reserve price two years ago
The corner property at 80 South Circular Road sold for nearly 25pc over its reserve price two years ago

Gross yields of almost 20pc were seen when two properties sold for over the million euro level at the Allsop Private auction in Dublin on May 11.

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Almost €7m was generated from the sale of 10 properties ranging in price from €360,000 upwards. Negotiations continued after the auction on the sale of some of the five properties that did not sell at auction but these had not finalised by the time we went to press.

The top price of €1.35m was achieved by a tranche of 30 student apartments near Carlow Institute of Technology. Comprising 1-7, 13, 14 and 6-36 Riverbank, Burrin Street, Carlow town, these range in size from two to five bedrooms and together have a total of 83 bedrooms.

With about 90pc occupancy levels, they generated gross income of €259,058 most of which came during the 2014/2015 academic year. This suggests an average price of €45,000 per apartment and an overall gross yield of 19.2pc.

A similar gross yield was reflected in the €1.1m price attained for a mixed use commercial property in North County Dublin. Located at Sarsfield House, Mill Street, Balbriggan, it comprises three retail units and three storeys of offices extending in all to almost 1,324 sq m.

Its offices are let to County Dublin VE C and Dublin and Dun Laoghaire Education and Training Board, with leases expiring in 2019 and 2034. One of the retail units is let to DP Realty Ltd trading as Dominos and a second is let to Mountain of Fire and Miracles Ministries. A third retail unit is vacant.

The property also has a basement car park. Total current annual rent reserved is €214,402 suggesting a gross yield of 19.49pc netting to 18.6pc. A corner property at 80 South Circular Road, Dublin 8, sold for €860,000, or €40,000 over its reserve and €185,000 over a price that was quoted for it in 2014 before it was withdrawn from sale. Extending to 199 sq m, its accommodation comprises a pharmacy unit, a three bedroom apartment and a one bedroom apartment. With combined rental income totalling €74,400 a year the price equates to a gross yield of 8.65pc.

Also in Dublin 8, a 0.28 acre development property off Cork St sold for €625,000. It comprised old buildings at 41, 41A Chamber Street, 18A Ardee Street and plot of land at Oscar Square, close to The Teeling Distillery. Its price is the equivalent of less than €2.24m per acre.

In Co Wicklow four vacant retail units, 3 - 6 Southpoint, Main Street, Bray, sold for €555,000. They extend to 8,278 sq ft in total.

Near Limerick City four adjoining warehouses, Units 1-4 Crossagalla Industrial Estate, Ballysimon Road, sold for €575,000. The largest of the units, extending to 4,515 sq ft has a current rent reserved of €15,000 per annum. The other three units are vacant.

In Clontarf, Dublin 3, a duplex own door office, Unit 13 The Seapoint Building, sold for €487,500. The vacant property is arranged over first and second floors and has a gross internal floor area extending to 2,379 sq ft. Its accommodation includes a kitchenette and it came with three parking spaces.

In Dun Laoghaire, a multi unit retail investment with development potential sold for €370,000. Extending to 3,694 sq ft in total, the town centre property at 53/54 Lower Georges Street comprised one retail unit with a current annual rent reserved of €20,000 as well as a vacant ground floor retail unit and vacant first floor accommodation.

In the nearby suburb of Sallynoggin, a three storey office building known as Altracell House, 10A Church Place, sold for €360,000. It extends to 3,745 sq ft and has potential for letting each floor or for single occupation. It is also considered to have potential for conversion to residential use.

Among those which were believed to be under negotiation at the time we went to press was a property at 80 Dame Street, Dublin 2, which had a guide price of €800,000 to €900,000. Its guide price was €800,000 and with a rent roll of €65,000, this would equate to a gross yield of 8.13pc.

Extending to almost 177 sq m, it comprises a ground floor retail unit let to Fogarty Lock & Safe as well as four storeys of office accommodation let to Mercroft Taverns Ltd.

Also in central Dublin, a mixed use investment at 27 Parkgate Street, next to Ryan's pub and near the new courts and the entrance to Phoenix Park, had a €650,000 to €700,000 guide price.

A County Cork office property failed to sell under the hammer for the second time despite having a Government covenant. Located at South Main St, Youghal, the building generates €97,000 a year from the Government's court service for 3,000 sq ft of its space while another office section of 2,200 sq ft is vacant.

Its guide price range was reduced by almost €100,000 to a range of between €800,000 and €900,000 for the May Private auction.

Auctioneer Richard O'Neill said "Allsop Private again drew substantial interest from investors seeking both dry income producing investments and add-value asset management plays. As with previous sales, premiums were paid for location and tenant profile. The average sale price attained is close to €700,000 emphasising Allsop Private's unique focus as the country's only auction house dedicated to higher value investment property."

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