A major portion of a Galway commercial property sold for €2,225,000 or more than five times its guide price at a BidX1 auction last week.
The same auction saw 38 individual tenanted dwellings sold at a time when expectations have been rising that the Government's Finance Bill to be published later today (Thursday) may accede to Fianna Fail's request for incentives for landlords who retain their tenants when selling properties. This may be designed to discourage evictions which push up numbers of homeless families.
It will be interesting to see how the Finance Bill might treat investors who bought such properties at last week's auction but who may not close the sale for another few weeks.
Most of the tenanted dwellings in the auction had guide prices pitched well below prices which can be achieved for vacant homes. As the latter have greater appeal to home buyers with mortgages, they can sell for more in private treaty sales. See below for some examples.
The top price achieved at the auction was for the Galway commercial property at Northpoint Retail Park, Tuam Road, which had been guided at €400,000 and sold for as much as €2,225,000. It was developed by Tom Considine and Paddy Sweeney, two Galway developers who also became involved in one of the biggest property deals of the boom, the purchase of the 331-acre Millennium Park in Naas, Co Kildare for €312m.
The portion of Northpoint which sold at auction comprises seven retail warehouse units, three warehouses and six office units extending to 11,032 sq m (118,750 sq ft) over lower ground, ground, first and second floors. A retail warehouse, Unit 1, was the only one of these units which was tenanted. It is let at €30,000 per annum.
The property also includes 240 basement parking spaces and 190 surface spaces. A further two retail units and six office units at Northpoint had previously been sold separately.
A commercial investment in Glasnevin Business Park, Dublin 11, sold for €1,005,000, or 44pc over its €700,000 guide price. It is located in an area which is within walking distance of Broombridge Luas and rail stations and has attracted a lot of comment about its potential for redeveloping industrial properties for housing. The 1,536 sq m (16,533 sq ft) block contains four ground floor warehouse units and four first floor office units. Four of the units, which are occupied by two tenants, generate €40,200 in annual rent. The other four are vacant.
The auction was third time lucky for a lot with 15 dwellings which effectively sold for only €30,000 per property. Known as 1-15 Ullard Holiday Homes, Ullard, Graiguenamanagh, Co. Kilkenny, it had failed to sell last May when its guide price was €750,000, and in July it was cut to €650,000 but again didn't sell. Last week it was reduced further and this time sold for its €450,000 guide after only one bid.
The lot comprises 10 one-bedroom apartments, four two-bedroom apartments and a four-bedroom detached house. Four apartments are tenanted and generate gross rent of €20,280 a year.
A Dublin city centre mixed-use investment, 70 Gardiner Street Lower, Dublin 1, on the corner with Talbot Street, sold for €812,000, or more than 80pc over its €450,000 guide price. With a total floor area extending to 254 sq m (2,734 sq ft), it comprises two retail units, three offices and storage accommodation. It generates €60,000 per annum from two tenants and its second and third floors are vacant.
A terraced investment property at Site 3A, Unit 11, Canal Bank, Parkwest Industrial Estate, Park West, Dublin 12, sold for its €430,000 guide price after one bid. It comprises warehouse and office accommodation extending to 638 sq m (6,870 sq ft) and is let to Arena Hospitality Ltd t/a Egan Hospitality Group for a rent of €40,000 per annum, suggesting a gross initial yield of 9.3pc.
A city centre creche at Alexandra Walk Apartment Complex, Whitefriar Street, Dublin 8, sold for its €395,000 guide price. Extending to 296 sq m (3,186 sq ft), its rent is €42,000 per annum, including VAT, suggesting a gross yield of around 8.1pc.
Among the tenanted dwellings at the auction, suburban houses which might appeal to families fetched the strongest prices. For instance a semi-detached three bedroom house in Clonsilla sold for €266,000, and with annual rent of €12,000 this equates to a gross yield of only 4.5pc. Extending to 101 sq m (1,087 sq ft), 6 Elmwood Close, Dublin 15, sold for 27pc over its €210,000 guide and also €41,000 more than what the neighbouring 24 Elmwood Close sold for in 2016.
A similar yield of only 4.98pc was seen with the sale of a two-bedroom apartment near Dublin Airport. Located on the third floor, the 59 sq m (639 sq ft) Apartment 23, Temple Lawns, Northwood, Santry, Dublin 9, sold for €217,000, €37,000 over its guide.
The yield is low because the rent is only €900 per month which could explain why the price was cheap relative to its neighbour, 22 Temple Lawns, which sold for €250,000 in June 2017.
In Tallaght, an even larger three-bedroom semi, 19 Kingswood View, sold for its €245,000 guide and with an annual rent of €15,000 this equates to a gross yield of 6.1pc. It extends to 105 sq m (1,130 sq ft) and also has room to extend to the side. The Property Price Register shows that most sales in Kingswood have achieved more than €300,000.
One of the highest Dublin yields was for Apartment 27, Aengus Hall, Belgard Square, Tallaght, Dublin 24, which sold for its €175,000 guide. With rent of €16,296 per annum this equates to an initial gross yield of as much as 9.3pc.
The day before, Sherry FitzGerald held a public auction which sold 14 of its 16 lots.
The most valuable was a mixed-use investment near Fanore beach at Ballyvaughan, Co. Clare, which sold prior to auction for around its €275,000 guide price. Known as Craggagh, it generates €12,000 from a 111.5 sq m (1,200 sq ft) convenience store. Upstairs are three vacant apartments. A restaurant in the building is not included in the sale.
Dublin lots included Apartment 1, Verdemont, Snugborough Road, Blanchardstown, Dublin 15, a three-bedroom, 109 sq m (1,173 sq ft) duplex, which sold for its €180,000 AMV.