Overseas investor poised to buy 1,200 Marlet apartments

Irish developer set to make €450m from sale of ‘Dublin Living’ property portfolio

Pat Crean, the Irish developer who leads the Marlet Property Group

Pat Crean, the Irish developer who leads the Marlet Property Group

 

Marlet Property Group is in talks with a multinational investor to sell 1,205 apartments under development in Dublin for around €450 million in what would be the biggest deal of its kind in the Republic.

Marlet put “Dublin Living”, a portfolio of apartments in four different sites in the capital, up for sale in June, with an asking price of €425 million.

The company said when it was contacted on Tuesday that it has entered exclusive talks with an international buyer but refused to name the potential purchaser.

Industry sources tipped four candidates: Round Hill Capital, said to have lodged a “particularly aggressive” bid and thought to be in pole position, US-based Greystar, Tristan Capital and Ivanhoe Cambridge.

All are overseas investors that specialise in property. Round Hill and Greystar focus on developing, buying and renting apartments, while Tristan and Ivanhoe have broader businesses.

Marlet, led by Kerry developer Pat Crean, said that it would not make any further statement until a sale goes through.

Four sites

Bids were in the region of €450 million, ahead of the figure sought by Marlet and implying that close to €2 billion in capital was chasing the 1,205 partly built homes in Dublin.

The apartments are in four sites, St Claire’s and Mount Argus in Harold’s Cross, Carriglea on the Naas Road, and a fourth on Cabra Road.

Building work is at various stages on three of them while it is just about to start at the Cabra location.

The first 180 new homes at Mount Argus will be finished and ready for occupation next year. The rest will be completed through 2019 and 2020.

Domhnaill O’Sullivan of property agents Savills pointed out that “Dublin Living” was the Republic’s largest single portfolio of private rental apartments when it was offered for sale.

Assuming a deal goes through, the buyer would be the second-biggest private rental landlord in the Republic after Ires Real Estate Investment Trust, which owns almost 2,400 apartments in Dublin.

Overseas buyers were said to be particularly interested in the properties, although a number of Irish investors also joined the race.

Building regulations

Observers say that proposed changes in the building regulations governing apartment construction, including easing height restrictions and other rules, could prompt further interest from international investors.

A deal would also be the first “forward-funded” transaction in the Republic. This is where buyers pay for properties in planning and under construction and take ownership when they are completed.

This allows builders to complete schemes and for the buyers to get the benefit from the accompanying rise in value. The practice is common in most countries, and accounts for more than one-third of property deals in the UK.

Marlet and its financial backer, London-based M&G Investments, the fund management arm of Prudential plc, decided to try this approach in the Irish market.

The building and property development company is working on a number of commercial and residential projects in central and suburban Dublin, including two key sites on the capital’s south docks. They include offices and up to a further 4,000 apartments.