It was announced today that Savills has been appointed to bring ‘Dublin Living’ to the market this week and will be seeking forward funding proposals for this unique portfolio. The sale will represent Ireland’s largest Private Rented Sector (PRS) public offering comprising approximately 1,170 units within four schemes in one lot.
The portfolio will be the first large scale PRS platform opportunity of its kind to be offered for sale in the Irish market and 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.
Based on current letting indicators for older existing multi-family schemes, the estimated net rental value of the portfolio today is predicted to be in the region of €20.5 million allowing for market standard operational costs. However, with the schemes due for phased completion between the second half of 2018 and the early part of 2020, this estimated rental figure is forecast to increase significantly during the construction period of the four schemes due to the critical undersupply of private rented accommodation in Dublin and the consequent inflationary pressure on rents.
The portfolio has a quoting price in excess of €425 million which equates to an estimated net income yield today of approximately 4.6% after purchasers’ costs and is expected to attract significant levels of interest from domestic and overseas investors looking to establish a considerable foothold in Dublin’s PRS market capitalising on rental growth prospects in the city.
The four high-quality PRS schemes will deliver a mixture of spacious residential apartments, which are predominately two beds (750 in total) with 255 one beds and the remaining 165 units laid out as three beds. All units will be finished to an extremely high specification with fully fitted kitchens and bathrooms, while residents will be able to avail of state of the art amenity provisions including residents’ lounges, business centres, meeting rooms, concierge facilities and gyms. The developments will also contain impressive communal areas and picturesque landscaped grounds.
According to Savills, the four schemes will benefit from exceptionally strong rental demand owing to their close proximity to Dublin City Centre and excellent transport connectivity.
Savills Director of Research, Dr. John McCartney says the number of households renting privately in Dublin has grown by 42,400 since 2012. However the very limited amount of housing construction has failed to keep up with this continually increasing rental demand and the current vacancy rate in the Dublin PRS has been driven down to just 1.45%. Dublin’s population is also rising by around 1.4% (20,000 persons per annum) and recent Census figures show a tendency 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 7.3% per annum or 14.5% compounded up to the midpoint of 2019.
Commenting on the opportunity, Domhnaill O’Sullivan of Savills Ireland said, "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. The developments on offer are in established residential locations with exceptionally high rental demand which is likely to attract interest from a range of local and international investors."
Source: www.businessworld.ie
