Value of Terenure site slips from €18.3m to €5m

A REDEVELOPMENT site in the centre of Terenure, Dublin 6W, bought at the height of the property boom in 2005 for €18.3 million by a company affiliated to housebuilder Capel Developments, is back on the market with a guide price of €5 million. The selling agents are CB Richard Ellis.

The 0.46 hectare (1.14 acres) site originally sold by the Sunday Worldhas planning permission for a mixed development but is most likely to be bought for a convenience store because such a use is permitted under its Z4 zoning. The two German discounters, Aldi and Lidl, are expected to pitch for the site along with Tesco, which is also rolling out smaller convenience stores in the Dublin suburbs.

The site has frontage on to Rathfarnham Road in Terenure and could easily accommodate a shop with about 1,393sq m (15,000sq ft) of retail space, one or two upper floors for offices and about 100 surface car-parking spaces. It is located in a densely populated middle class area with the added advantage of a heavy volume of passing traffic.

Early in 2007, Dublin City Council granted planning permission for a mixed development on the site and when the issue was subsequently appealed to An Bord Pleanála, it also approved of the proposed scheme which was to have included 62 one, two and three-bed apartments 1,081sq m (11,635sq ft) of retail space at ground and first-floor levels and a further 1,004sq m (10,807sq ft) of offices on the second and third floors.

The Capel-linked company had to beat off stiff competition for the Terenure site because new apartments going on the market in such an established suburb would have attracted premium prices of about €480,000 for two-bedroom homes and up to €600,000 for three-bed units. Capel delayed the development of the Terenure site because it was heavily engaged in a large apartment development along the Royal Canal at Ashtown, Dublin 15. Because of the success of that scheme, Capel went on to buy an adjoining 12-acre site from Castlethorn with planning permission for more than 500 apartments. The company believed it would get approval for an even higher density, possibly more than 700 units, and paid in excess of €70 million for the site in October 2005. That land remains undeveloped.

During the boom years Capel also purchased Portmarnock Hotel and Country Club in north Dublin and subsequently tried to persuade members of Clontarf Golf Club to relocate there and then allow the developer to acquire their grounds for a housing scheme. The 670 members were happy to accept a payoff of €100,000 per head but the arrangement had to be called off when the plan was blocked by Dublin City Council which had leased 62 of the 77 acres to the club.

Capel had better luck with some of its earliest endeavours, redeveloping the former British embassy at Merrion Road in Ballsbridge and retaining ownership of all 50 high-end apartments and penthouses which continue to attract top rents in the city. The success of that project also persuaded Capel to retain ownership of all 118 houses and apartments it built on the site of the former National College of Ireland next to the Gonzaga College at Sandyford Road in Dublin 6.