Prime site a litmus test for market

A development site on the Naas Road is on offer for a fraction of boomtime values, writes JACK FAGAN

A KEY DEVELOPMENT site along the Naas Road in Dublin 22 is to be offered for sale at a fraction of the values paid in recent years for other land in the same area.

Industrial property specialist William Harvey is seeking €8.5 million for the former headquarters of McCormick Macnaughton on 2.16 hectares (5.33 acres) close to the Louis Fitzgerald Hotel.

The property is to be sold on the instructions of PricewaterhouseCoopers' William O'Riordan. O'Riordan has been appointed receiver to the 50-year-old company, which had sole distribution rights for Caterpillar equipment in the Republic and Northern Ireland.

The €1.6 million-per-acre valuation placed on the land, even without considering the two large buildings on the site, will come as a surprise to several privately owned companies - and their bankers - which paid top prices for land in the area before the collapse of property values.

In 2006 Brunello, a firm headed by brothers Anthony and Gregory Alken, paid €107 million for the redundant SDS site of 14.35 acres opposite the Red Cow Hotel. The price worked out at almost €7.5 million an acre before costs and interest were taken into account.

Cork builders O'Flynn went one further in February 2007, when they paid around €115 million for the Nissan headquarters and a car compound on the Long Mile Road with an overall area of 18.7 acres. The decision to offer €6.15 million per acre in this case was largely influenced by the expectation that the planners would allow a residential scheme because of the availability of the Luas service at the front of the site.

The last firm to pay over the odds was Orchard Lane Investments - a wholly owned subsidiary of the Wexford-based Neville Group - which bought eight acres from speculators RQB for €37.5 million in 2006.

The land in this case adjoins the McCormick Macnaughton headquarters and cost Neville €4.7 million an acre.

The high level of interest in sites along the Naas Road over the past decade has been dictated not only by the advantages of having a Luas service, and the fact that the flow of vehicular traffic is probably the highest in the city, but also by the promise that a new development framework would be published recognizing the importance of this gateway into the city.

South Dublin County Council is now committed to producing a detailed urban design masterplan which will allow mixed-use development, including offices and homes, on what has primarily been an industrial area.

The council's policy on such developments along the Naas Road has already been signalled by their decision to grant Siac Construction planning permission for a major mixed-use development on the nearby Monastery Road. One of the objectors was Orchard Lane Investments.

The McCormick Macnaughton site, with 110m of frontage along the Naas Road, will also qualify for mixed-use development according to the selling agent. He says that, as a well located, high profile site, it should give a good indication of what the market is now willing to pay for land in the area.

There are two detached buildings on site extending to 4,557sq m (49,051sq ft). The principal building has three distinct divisions - offices, storage and workshop with loading doors and lighting and heating. There is also a detached L-shaped warehouse with storage and workshop facilities, and a surfaced yard outside.