Saturday 20 January 2018

Ireland’s largest private rental sector portfolio hits the market for over €425m

The scheme located in Cabra, Dublin 7 will include 408 units
The scheme located in Cabra, Dublin 7 will include 408 units
Ellie Donnelly

Ellie Donnelly

Ireland’s largest private rental sector portfolio has hit the market for over €425m, with Savills appointed to bring ‘Dublin Living’ to the market this week.

The quoting price in excess of €425m equates to an estimated net income yield of approximately 4.6pc after purchasers’ costs, and it is expected to attract significant levels of interest from domestic and overseas investors.

The sale will represent Ireland’s largest Private Rented Sector (PRS) public offering comprising approximately 1,170 units within four schemes in one lot.

“This exclusive portfolio will present an excellent forward funding opportunity to acquire a significant volume of new private rented sector units within a thriving cosmopolitan European capital city, as property prices and rents in Dublin continue to rise,” Domhnaill O’Sullivan, of Savills Ireland, said.

Read more: How 30pc of houses for sale can’t find buyers despite crisis

The portfolio will contain four newly developed schemes including Mount Argus and St. Clare’s in Harold’s Cross, Dublin 6W along with Carriglea in Bluebell, Dublin 12 and the Cabra Road development in Dublin 7.

The development sites are currently owned by Marlet Property Group in conjunction with their finance partner, the international asset managers M&G Investments.

The development will consist of three, two, and one bed apartments, and according to Savills, the four schemes will benefit from exceptionally strong rental demand owing to their close proximity to Dublin city centre and good transport connectivity.

Based on current market rental prices, the estimated net rental value of the portfolio is predicted to be in the region of €20.5m.

However, the rental figure could increase as schemes become completed in the second half of 2018 and the early part of 2020, due to the current undersupply of private rental accommodation in Dublin.

According to Savills director of research, Dr. John McCartney, the number of households renting privately in Dublin has grown by 42,400 since 2012.

However the limited amount of housing construction has failed to keep up with this continually increasing rental demand and the current vacancy rate in the Dublin private rental sector has been driven down to just 1.4pc.

Dublin’s population is also rising by around 1.4pc, or 20,000 people per annum, and recent Census figures have shown a preference towards urbanisation in Ireland.

As a result of this considerable supply and demand imbalance, Savills predicts continued growth, with new residential rents in Dublin expected to rise by an average of 7.3pc per annum or 14.5pc compounded up to the midpoint of 2019.

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