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640 flats up for sale in big market test

Wednesday, September 26 10:57:46

Savillls today said that they have put a portfolio of 640 flats around the country up for sale from two different receivers of debt from Ulster Bank and have already received strong interest from international investors.

The Gemini Portfolio is being brought to the market for sale by private treaty on the instructions of the Receivers, KPMG and Grant Thornton.

It consists of three modern well located multifamily schemes and, Savills say, attract significant interest from domestic and international investors looking for prime Irish investment opportunities as well as marking a real turnaround in the Irish property investment market.

The entire is being offered for sale with a guide price of E75 million equating to a gross income yield of 10.4pc based on 97pc occupancy.

Offers will be accepted for the entire portfolio or for parts of it. Savills recently completed the sale of The Alliance, the Gasworks, Dublin 4 for a price of E40 million which produced a net income yield of 6.25pc. Meanwhile, Sandford Lodge in Dublin 6 is on the market with a quoting price of E26 million equating to a net initial yield of 6pc.

The schemes within The Gemini Portfolio comprise Tallaght Cross East Dublin 24 - formerly part of Liam Carroll's property empire, Island Key (Dublin 3) and Orchard Gardens (Cork City) totalling 640 modern apartments, approximately 18,720 sq. m. (201,500 sq. ft.) of commercial space and a 48 bed Hotel.

The gross passing rent is E5.56 million per annum of which 89pc is attributed to residential and the remaining is secured against some excellent commercial covenants such as Marks and Spencer (Ireland) Limited and Tesco (Ireland) Limited. These covenants account for approximately 10pc of the Portfolio income at present. Based on a 97pc occupancy rate for the residential and commercial elements, we anticipate the gross income would reach approximately E8.15 million.

"The multifamily investment market is relatively new to the Irish market. However there is pent up demand from international investors looking for multifamily blocks as the macro and micro recovery prospects in this market are strong. The Gemini Portfolio, the largest of its kind to be released will attract investors looking to build a residential platform," said Domhnaill O'Sullivan, Director of Investments at Savills. "A purchase price at quoting levels would be significantly below the replacement cost of the assets and represents an excellent time to invest at the bottom of the cycle."

"We forecast the multifamily market will continue to be very active and evolve to compete with commercial investments as more sales come to the market over the next year. We envisage that over 2,000 units could come to the market in the next 12-18 months. It's a market sector we are very positive on".