With the prospects for the future development of apartments in Ireland now widely acknowledged as being in crisis by everyone within the property industry from developers to agents, to the SCSI, and most significantly by the institutions who, in the era of low interest rates had financed their delivery, the market for existing or standing stock has been taking an interesting turn of late.
Having only recently offered the portfolio of 293 rental apartments it owns in the south Dublin suburb of Dundrum for sale through agent CBRE at a guide price of between €140 million and €150 million, Hibernia Real Estate Group (formerly Hibernia Reit) is said to be sitting tight for now, notwithstanding the fact that it received a number of bids within its desired price range from parties which sources described as “credible”.
Distributed across the Dundrum View and Wyckham Point residential schemes, the 293 units and 114 car-parking spaces in question are understood to have cost the then Hibernia Reit about €115 million in total - or an average of €392,491 per unit - between their acquisition in 2014 and 2015 and the completion of the unfinished apartments in the latter development.
And while both schemes are located within a rent pressure zone which limits the capacity of the landlord to increase the rent to 2 per cent per year, the 293 apartments have, thanks to the ongoing shortage of supply in the wider rental market, been fully let and are delivering millions of euro in rent for the past eight years.
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They’re still up for sale but why would Hibernia Real Estate Group dispose of them just now when they’re generating such a healthy income, and at a time when the industry consensus is that the delivery of new apartment schemes is at risk of coming to a shuddering halt owing to a lack of funding and viability?
