St Augustine Street apartment block in Dublin 8 sells for €25m

Modern apartment developments in the Dublin area are continuing to attract buyers looking for a long-term income stream. A European private investor has emerged as the latest purchaser of a block of 110 apartments just off the city quays near Christ Church Cathedral for €25 million – €3 million above the guide price.

The investment will show a net initial yield of about 5 per cent and reflects an average valuation of more than €227,000 for each unit.

The apartment block at 42-76 St Augustine Street is different from most others going for sale in that it has been leased to a rental company, Staycity, since 2008 and is currently producing an annual rent roll of €1.3 million. The lease has another eight years to run without any rent reviews.

Staycity specialises in renting serviced apartments to corporate clients as well as tourists in various parts of the world.

In addition to the residential units at St Augustine Street, it also manages similar accommodation at Christchurch, Millennium Walk and Temple Bar.

The Staycity internet site has advertised a one-bedroom apartment in St Augustine Street for June 4th at €299 a night and a two-bed unit at €493. Of the 110 apartments in the development, 77 are two- beds, 121 are one-beds and 12 are three-beds.

Marguerite Boyle of Savills, who handled the sale of the apartments, said the agreement between the Staycity and the new owner of the apartments had another eight years to run at which stage either party could opt out of the arrangement.

The St Augustine Street apartments are arranged in five blocks around a central courtyard developed in 2008 by Liam Carroll's Zoe Developments.

That company and others associated with Mr Carroll went into voluntary liquidation towards the end of 2009 with debts of €1.3 billion.

The vast majority of distressed apartments developments sold in Dublin over the last eight years have had to be managed by the new owners.

The St Augustine Street investment is different in that it will require the minimum of effort by the new owner.