Luxury apartment market starts to heat up

2016 was a bumper year for luxury apartment sales, thanks in part to the launch of a number of high-end developments in the Dublin 4 area. For every €1 million-plus apartment to hit the market, a wealthy buyer emerged to match – and quite swiftly too.

Perhaps the most interesting addition to Dublin's apartment stock was 55 Percy Place, by developers Oakmount and U+I, where sales were handled by Sherry FitzGerald. Buyers were clearly impressed with the unusually high level of finish, debatably the highest standard of any apartment development in Dublin thanks to their Bushell Interiors fit-outs, as they blew post-recession price per square metre records for apartments out of the water.

The average price achieved in the development was €10,290/sq m, equating to €976,500 on average per unit. Apartment 6, a third-floor one-bed extending to 56sq m, sold for €737,750 – a whopping €13,174/sq m. Interestingly, about half of the units ended up on the rental market immediately after purchase. Record-breaking Apartment 6 was available for €2,500 a month, equating to a 4.07 per cent gross yield, before not-insignificant costs such as annual management charges and letting-agent fees are taken into consideration, not to mention void periods. Other rents sought included €2,900 for Apartment 1, a ground floor two-bed (4.64 per cent gross yield) and €4,500 a month for Apartment 8, a large first floor two-bed (4.91 per cent gross yield).

Record

A post-recession record in recent months in terms of the price per square metre was also achieved for a second-hand apartment, when a penthouse at 18 Lower Baggot Street massively exceeded its asking price. Originally a show unit, Penthouse 22 hit the market in 2016 with a €1.5 million asking price. Offering an impressive 179sq m of lateral living space, along with 68sq m of outdoor terraces, one eager buyer splashed out €2.285 million (€12,765/sq m) for the penthouse, equating to 52 per cent over asking price. Ten years ago, when the development first hit the market, the same apartment was offered for sale at €3.6 million and parking spaces were available for a staggering €120,000 each.

The most expensive apartment development of the year was Embassy Court on Prince of Wales Terrace in Ballsbridge, sold through Savills. Originally built in 2004 by developers Twinlite and operated as luxury short-term rentals, the apartments were marketed for sale last year for the first time following refurbishment. The 16 apartments offered for sale achieved an average of €1.15 million each, the most expensive being Apartment 16 at €2.45 million (€10,338/sq m). No less than three apartments in the block sold for €2 million or more.

Across the Merrion Road, Residence 19 at the InterContinental Hotel appeared on the property price register as having sold for €2 million in December. The apartment, which has been home to the parents of one of Ireland’s best-known property developers, was not offered for sale on the open market and as such the transaction may have formed part of a restructuring of the owners’ affairs as opposed to an actual sale. Another unit in the building, Residence 10, a 170sq m penthouse, was sold in recent weeks by Lisney for €1.325 million (€7,794/sq m). The two-bedroom unit is subject to an annual €22,000 service charge – the highest of any apartment development in Dublin – which accounts for the somewhat lower capital values achievable per square metre, relative to other neighbouring luxury developments.

Penthouse units

Around the corner on Anglesea Road, Blackhall Green Homes launched Dunluce in September, with prices from €775,000 for two-beds. The penthouse units, each roughly 150sq m in size, were priced from €1.7 to €1.8 million. The asking price of the most expensive, 153sq m Penthouse D26, equated to €11,800/sq m.

Beyond Dublin 4, there was little in the way of major sales, which is to be expected given the concentration of Dublin's high-end apartment stock in the desirable south city locale. In the north Docklands, agents Owen Reilly and Hooke & MacDonald handled the sale of a number of outstanding penthouses at Spencer Dock, each ranging in size from 245-329sq m with prices from €900,000 to €1.45 million. The apartments offered expansive walls of glass, large outdoor terraces, with some featuring private outdoor heated swimming pools. A second phase of penthouses were recently placed on the market. Also on the northside, an apartment at the Sutton Castle development, which was formerly home to an Irish reality television personality, appeared as having sold for €1.294 million in May.

Only time will tell how long 55 Percy Place manages to hold on to its current record given the number of swish new schemes under construction around Dublin city – most notably Lansdowne Place in Ballsbridge.

However, the trend of constructing apartments for letting purposes may help to keep its record in place, as some of these new luxury blocks may not be offered for sale at all. The Weir at 59 Orwell Park in Rathgar is a prime example. Completed by a local developer in 2016, all eight townhouses and six of the eight apartments in the choice scheme came on the rental market last September, and with current headline rents of €3,600 a month for large two-bed apartments and €3,800 a month for three-bed townhouses, it's no surprise that the owner has opted to avail of the lucrative rents achievable rather than immediately selling the properties.