Georgians in the ascendant as demand for city space surges
The rising tide of the property market has lifted the boats of the south Dublin city Georgian sector. Recent activity has seen not only individual Georgian properties but also Georgian portfolios selling for above their asking prices.
Increased demand for both housing and city centre office space, as well as rising rents, have boosted investor demand. In the last two years capital values for south city Georgian buildings in good condition or near Merrion and Fitzwilliam Squares are estimated to have risen by about 20pc to around €600 per sq ft according to David Bennett of Cushman & Wakefield.
Last week saw a portfolio of 30 redeveloped Georgian houses in Dublin 4, 6 and 8 sell for more than its €60m guide price to a Dutch property investment company Orange Capital Partners. Branded by agent CBRE as the Belgrave Collection, it included 146 studio apartments, 85 one-bed apartments, 29 two-bed apartments and five three-bedroom homes. But unlike the old bedsits with shared bathrooms, all these units are self-contained and designed for professionals or IT workers who wish to live near the city centre.
The portfolio was assembled and refurbished by a team lead by Irish firm Lugus Capital and backed by Broadhaven Capital Partners, a unit of US private equity fund, Bain Capital. They began buying this portfolio at a time when many Georgian owners were being pursued by either the banks, which wanted their loans repaid, or local authorities, which sought to discourage multi-unit houses.
However, rising demand for flats forced the city council to become more amenable to multi-lets and this change of heart appears to be generating interest from more investors, both Irish and international.
Recently Colliers agreed two deals for two mixed-use Georgians in the south city core with two private Irish investors at above their asking prices.
One of these, the four-storey, over-basement, 14 Lower Pembroke Street, with period features, sold for €1,825,000 or 7.4pc over its €1.7m asking price. Extending to 4,480 sq ft, this equates to more than €407 per sq ft. However its seven old fashioned bedsits need refurbishment.
Pat & Karl Henry Fitness Centre occupies the basement and part ground floor and together with two office tenants they provide total annual commercial income of €63,600.
Mandy Daly of Colliers has also gone sale agreed on 14 Adelaide Road, a well presented three-storey, over-garden level Georgian with one car space, for well over its €1.1m guide price. Extending to 3,470 sq ft, it has a one-bedroom apartment on each of three floors while Kidd Care Montessori occupies its garden level. A high spec 300 sq ft log cabin with WC is also located in the garden.
Prior to those deals Colliers sold 33 Fitzwilliam Place, 36 Fitzwilliam Place and 44 Lower Leeson Street for substantially in excess of their guide prices.
Ms Daly says that most international purchasers prefer well-finished properties with good income while Irish investors are more willing to take properties which require work.
Clive Roche of Cushman & Wakefield says that with most of the individual buildings selling in the €1m to €3m range, the Georgians offer lot sizes to suit private investors.
"Market fundamentals remain positive, underpinned by steady occupier demand," he adds.
With their smaller floor plates, Georgians can also suit smaller office firms which need a central location, and he has also noticed increased demand from service office providers.
"Rental values typically range from €35 to €40 per sq ft," he adds. In 2013 they were around €15 per sq ft.
"Capital values typically range from €400 to €500 per sq ft, however for exceptional properties, particularly those located on the main Georgian squares, we have seen transactions in excess of €600 per sq ft," he adds.
Two tranches of Georgians recently brought to the market will present interesting tests of demand from wealthier investors both Irish and overseas. Ballybunion Capital Ltd, a qualifying alternative investment fund (QIAIF) is selling Baggot Buildings, comprising four Georgians at 19-22 Lower Baggot Street near the corner with Pembroke Street.
Advised by Alan Conway of Alway Consulting Ltd, Ballybunion bought the four in 2016 for €4.5m and undertook a major refurbishment and upgraded them as serviced offices. Now David Bennett of Cushman & Wakefield is guiding in excess of €8.5m for them.
The work included restoration of period features including stained-glass windows and fireplaces. The four houses have an overall floor area of 12,723 sq ft and come with four basement car parking spaces. Numbers 20 and 21 are interconnected at all levels while numbers 19 and 22 are connected at basement level. No 22 can also be used as a self-contained building.
Another portfolio to come to the market recently is the Viscount collection, a group of five fully-occupied Georgians, two of which count a night club among the tenants. They are being sold by a private London-based investor in one or more lots.
The more valuable of the lots is 38-39 Lower Leeson Street for which joint agents Murphy Mulhall and Cushman & Wakefield are guiding over €5.15m. These comprise two multi-tenanted interconnecting Georgians and two mews apartments to their rear. These Georgians extend to 15,080 sq ft over five floors including basements. The interconnecting basement of both buildings is occupied by Angels nightclub. Each of the top floors accommodates a two-bedroom apartment while the other floors are devoted to offices. With a passing annual rent of €358,300, this suggests a net initial yield of 6.41pc.
The mews apartments and nine parking spaces to the rear are accessed from Leeson Place.
The other Viscount lot at 17-19 Fitzwilliam Street, comprises three interconnecting four-storey, over-basement Georgians which extend to 9,374 sq ft. These are fully occupied with commercial occupiers on ground, first and basement levels with the upper floors comprising six apartments. In good condition they generates annual rent of €227,500 and the guide price of €4.3m suggests a net initial yield of 4.87pc.