Thursday 23 November 2017

RTE site bids see return of boom-era land values

The five acre site on Botanic Road
The five acre site on Botanic Road
Eastwise Homes has acquired a five-acre site on Botanic Road

Donal Buckley

Bidders have been whittled down in the competition for the RTE site in Montrose, Dublin 4 which is expected to raise the bar to a fresh level for land values not seen since the crash. Agents Savills are expected to shortly go to a second round of bids for RTE's 8.64 acre site which is guiding €75m or the equivalent to €8.68m per acre.

That is 73pc higher than the €5m per acre seen last year when Rehab sold a substantial site with prospective sea views at its Roslyn Park headquarters in Sandymount, also in Dublin 4, and which was bought by the Department of Education.

More recently a price of about €5.17m per acre was reported to have been achieved for another Dublin 4 site which was much closer to the city centre, the 3.09 acre site at the former Carmelite seminary at Bloomfield Avenue, Donnybrook. However agents GVA Donal O Buachalla, were still showing the site for sale on their website as of last Tuesday evening. Some weeks ago a deal was reported to be sale agreed for about €16m which was some €6m above the guide price.

One of the bidders for the RTE site is believed to have pitched their bid for the lands at around the price per acre reported for Bloomfield but this was about €30m less than that sought by RTE and so they are believed to have been excluded from the second round of RTE bids.

The location of the RTE property so close to the upmarket Ailesbury residential road and the N11 will ensure that the site should fetch a strong price. However with a number of residential development sites expected to come to the market in the near future some of the prospective bidders may be holding tough for sites pitched at more affordable levels.

Cairn Homes, which is also understood to be among the bidders for the RTE site, is reported to be selling a number of sites in one lot for around €30m. In addition the Minister for Housing Simon Coveney has announced plans to do deals with residential developers on possibly as much as 2,000 hectares of state and semi-state land which have potential for up to 50,000 new homes.

He also announced that Dublin local authorities are going to market with sites capable of delivering 3,000 new social and affordable homes in "prime locations".

However the Minister's definition of prime locations may differ widely from what estate agents would consider prime.

For instance the three development sites cited by him as 'prime' Dublin City locations, with potential for over 2,000 of these homes will be located at O'Devaney Gardens, Infirmary Road, Dublin 7; Oscar Traynor Road, Coolock and Saint Michael's Estate, Emmet Rd, Dublin 8.

Meanwhile some developers and vendors have not been waiting. Eastwise Homes, whose directors include Gordon Lynch, is understood to have paid around €18m for a five-acre site at Botanic Road, Glasnevin, Dublin 9. That's about 20pc more than Lisney's €15m guide price. It has planning permission for 119 homes including 43 houses and Eastwise hopes to launch them towards the end of the year. In the meantime following changes to the development plan which would allow for higher densities, Mr Lynch said he hopes to increase the number of apartments on the site from the 76 which already have permission.

The Botanic Road site is reported to have been sold by an Irish subsidiary of the Westhill Land & Property UK Ltd which bought the southern half of the site only about four years ago for €4.5m.

Eastwise is currently completing a 44-house development at Kellet's Grove, Dunshaughlin, Co Meath, on a site which it bought in 2015. It is also developing 99 houses ranging in size from three to five bedrooms at Rahillion, in the coastal village of Donabate, Co Dublin.

Meanwhile also on Dublin's north coastal area, a 3.69 acre site with full planning permission for 12 detached houses has gone sale agreed in a deal brokered by JLL and Lisney. Located on Dublin Road, Malahide, and adjacent to Malahide Castle and Gardens, it had a €6m asking price or €1.63m per acre or about half a million euro per house site.

To the west of the city a 0.87 acre development site at Balfe Road, Crumlin, Dublin 12, sold for €1.5m in March or 15pc above the price at which it had been agreed about a year earlier. Agents Kelly Walsh sold it through the BidX1 online platform.

HWBC and JLL are guiding €10m for the two acre Avid site in Sandyford, Dublin 18 which developer U+I is selling with planning permission for 147 apartments, crèche, café, gym and media suite. U+I purchased the south Dublin site in 2015 and has worked with architects McCrossan O'Rourke Manning and Urban Solutions project managers to design a modern alternative scheme for the site. The planning permission allows for the construction of three blocks ranging in height from six to eight storeys which comprise 29 one-bedroom apartments, 102 two-bedroom apartments and 16 three-bedroom apartments.

Also on Dublin's southside two sites are about to go to a final round of bidding. These include 3.43 acres at Harold's Cross Road, Terenure, Dublin 6W, for which Ross Shorten of Lisney has been guiding €15m suggesting about €4.37m per acre.

Located near the junction of Mount Tallant Avenue, it has planning permission for 36 houses and 30 apartments and is also believed to have potential for a further nine units.

Mr Shorten says that outside the M50 development site values "have been stable and are improving with values at around €750,000 per acre or about €60,000 to €70,000 per house site."

He believes that over the last 12 months land values have increased by an average of about 15pc.

Marie Hunt of CBRE says there is a severe scarcity of land on the market, which is leading to pent-up demand for any sites that are being offered for sale.

"We are therefore urging landowners and other stakeholders to take advantage of the weight of frustrated capital that is currently looking for opportunities to participate in addressing the severe housing shortage by releasing land parcels to the market," she adds.

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