Wednesday 13 December 2017

Dublin restaurant sells for 80pc over its €780,000 guide

The Kube building in Letterkenny
The Kube building in Letterkenny

Donal Buckley

This year's auction activity is beginning to gather momentum. DNG generated €3.66m from its auction last week and Real Estate Alliance (REA) will auction 20 Munster and Connacht properties next Thursday, March 23.

Allsop plans to generate more than €38.5m from an online auction of 230 lots on April 5, which will include a Mayo hotel, a Galway city guest house with development potential and a number of Dublin office units, takeaways and multi-unit investments as well as development prospects.

The strength of Capel Street's burgeoning restaurant market was reflected at last Thursday's DNG auction when the former Gary Rhodes restaurant in The Capel Building at St Mary's Abbey, Dublin 7, sold for €1.4m - or 80pc over its €780,000 guide price. Gareth Noone of auctioneers DNG said there was strong interest from restaurateurs, with three operators competing. The successful bidder is believed to be one with a local outlet so the price suggests a strong trade.

While the price equates to €135 per sq ft, Mr Noone says a key selling point was the fully fitted units, which would make it easy to quickly re-open the restaurant which extends to 960 sq m (10,360 sq ft) over lower ground, ground and mezzanine floors.

Pontoon Bridge Hotel
Pontoon Bridge Hotel

An existing office occupant of the Capel Building paid €950,000, or €105,000 below the guide, for the other commercial lot comprising six office units in the building at various stages of shell and core condition.

The other nine DNG lots were residential units, the most valuable of which was a two-bedroom apartment at 2 Timber Mills, Artane, Dublin 5, which sold for its €190,000 guide.

Allsop's auction on April 5 will feature 99 commercial properties with combined reserves of €21m and 131 residential lots with combined guide prices of around €17.5m.

The most valuable lot is a 720 sq m (7,740 sq ft) office unit at Paramount Court, Corrig Road, Sandyford, Dublin 18, which has a guide of between €1.45m and €1.55m. This suggests a net initial yield (NIY) of 7.66pc but auctioneer Richard O'Neill says it has the potential to increase the NIY to more than 9.5pc. Extending over ground and lower ground floor, the office unit and 16 parking spaces are rented to Auto Trader Ltd, trading as Carzone, for €116,000 per year subject to upward-only rent reviews.

In Dublin 6, a part of a Boylesports bookie shop together with an overhead apartment, which generate €58,200 in annual rent, have returned to the market with a €730,000-€760,000 guide range, suggesting a 7.63pc NIY.

In 2011 the property - 103, 103a and 103B Rathgar Road - was purchased at Allsop's first auction for €350,000 and the current owner refurbished the overhead three-bedroom apartment. In 2014 another part of the same Boylesports shop at adjoining 104 Rathgar Road together with another overhead apartment was sold at a Ganly Walters auction for €550,000. That property is not included in this sale.

Paramount Court offices
Paramount Court offices

The highest yield in Dublin could be generated for two interconnecting Georgian mixed-use buildings at 12 and 13 Gardiner Place, Dublin 1. The property's ground and second floor is let as offices to Temple Street Children's Hospital for €12,000 a year. A second floor is let to Lohan & Donnelly Consulting Engineers for €16,000 a year and two basement apartments generate €28,250 a year, while a third office space is vacant. At a €445,000 to €475,000 guide price, the NIY could be as high as 12.12pc.

An interesting test of Dublin's suburban takeaway market will be seen with three lots as it can be difficult for takeaway operators to get planning permission in some areas. An Italian takeaway trading as Peters at 82 Upper Drumcondra Road, Dublin 9, generates €37,000 in rent. The 105 sq m (1,129 sq ft) property includes residential accommodation overhead. Its €370,000-€380,000 guide range suggests a 10.43pc NIY.

A Chinese takeaway pays €38,400 rent for the end of terrace 18 Maypark, Malahide Road, Donnycarney, Dublin 3, together with an overhead three-bedroom flat and, at its €340,000-€350,000 guide, this suggests a 10.5pc NIY. On the city's southside, the vacant takeaway and overhead flat at 81 Terenure Road North, Dublin 6W, extends to 136 sq m (1,470 sq ft) and has a €380,000-€400,000 guide.

In Letterkenny, Co. Donegal, the distinctive Kube Building on Thorn Road has a €410,000-€460,000 guide, indicating a 9.8pc NIY. Its second floor is let to Donegal County Council for €42,000 a year while its 510 sq m (5,500 sq ft) of ground floor retail space and 472 sq m (5,081 sq ft) of first-floor office space is vacant.

The 58-bedroom Pontoon Bridge Hotel, Pontoon, Co. Mayo, has a reserve range of €340,000 to €360,000. Extending to more than 4,645 sq m (50,000 sq ft), the hotel enjoys stunning views across Lough Conn.

The most valuable lots at REA's auction next Thursday will be two commercial investments in Cork City. At 7-9 East Douglas St, a mid-terraced building let as a restaurant and overhead offices together with a development property on a combined 206 sq m (2,216 sq ft) site have a €575,000 guide price. At Looney's Cross in Bishopstown, two own- door retail units have a combined €375,000 guide price. One extends to 1,189 sq ft. and generates €28,350 year in rent from A Spice of India restaurant. The other extends to 2,082 sq ft and is vacant.

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