A portfolio of 27 pre-63 properties – covering 213 residential units and three commercial assets in Dublin city centre – is the standout launch of the week on the investment market given its scale, quality and pure curiosity value.
The portfolio, dubbed the Circle Collection by agent Savills, is guiding more than €46 million.
It is “effectively fully let”, according to the agent, and produces a rent roll of €3.49 million a year. Given the guide price, this would reflect a gross initial yield of 7.2 per cent – higher than the typical 5 per cent return investors are settling for on new build-to-rent apartments in Dublin.
The average rent per residential unit in the portfolio works out at about €1,346 per month – significantly less than the €700 a week rents being quoted for similar one-bed/studio apartments in the city centre on MyHome.ie.
The vendor, a consortium of low-key Irish investors, acquired the properties over the past five years. Many of them were in poor condition at the time but have subsequently been refurbished to a high standard.
All of the properties are now fully compliant for planning, fire regulation and local authority housing standards. Each of the units includes a range of sustainable and low maintenance features throughout.
The properties in the portfolio are located in prime rental locations near employment and transport hubs. These include Clontarf, Rathmines, Rathgar, Phibsborough, and the South Circular Road.
Standout properties include a fine period redbrick at 6 Grosvenor Place in Rathmines, Dublin 6, which is divided into seven refurbished residential units and producing a rent roll of €130,500 a year. This breaks back at an average of €1,553 a month per unit.
Another property at 23 Harrington Street in Portobello is divided into 16 residential units and is producing €246,600 per annum in rent – an average of €1,284 per unit a month.
Nos 1 and 3 Howth Road in Dublin 3 – period houses close to Clontarf Dart station – are divided into 24 residential units. These produce an annual rent roll of €341,100 – or an average of €1,184 per unit a month.
This is the second time in a year that a large portfolio of this type has come on the market. Last May a group of 30 period houses divided into 265 apartments – dubbed the Belgrave Collection – came on the market through CBRE at €60 million and was eventually sold for €68.5 million to reflect a net initial of 4.81 per cent.
That sale, for properties mainly in the Dublin 6 postal code, was on behalf of a US investment group. The 30 houses in Ranelagh, Rathmines, Rathgar, Portobello and Ballsbridge were producing rental income of €4.2 million a year – or an average of €1,320 a month per unit.
Dessie Kilkenny of Savills says the Circle Collection allows investors to "capitalise on strong rental market conditions. This is a good, mid-sized lot. It'll appeal to a broad section of investors – both domestic and overseas."