A block of apartments on the banks of the river Lee in Cork city is fresh to the investment market this week with joint agents CBRE and Cushman & Wakefield guiding more than €10 million.
This would equate to an initial yield of 7.63 per cent based on the current gross income and a reversionary yield of 9.33 per cent if anticipated income growth is secured.
Leeside Apartments on Bachelor’s Quay is a stone’s throw from the central business district and includes 78 homes in five adjoining blocks with 32 car-parking space. The apartments are a mix of one-, two-, three- and four-bed units. Thirty-five are privately let with the remaining 43 in use as student accommodation and short-term summer rentals.
The development is projected to generate a rent roll of around €800,000 for 2016/2017 including summer rental income. This could be increased in the short term to €970,000 if vacant units are let while a full refurbishment programme, according to the agents, would drive the potential rent roll “even higher”.
Cork city has one of the highest rates of rental inflation country-wide, particularly over the past 12 months. The arrival of new employers, and growth among existing ones, has increased demand for residential accommodation. Local employers include Apple, Intel, Tyco, EMC, Pfizer and Eli Lily.
Leeside Apartments is adjacent to Mercy Hospital, Tyndall Institute and UCC's Distillery Complex. It is also a short distance from UCC's main campus, Patrick Street and the South Mall.
Cork's third-level student population currently stands at more than 23,800 and has been growing steadily year-on-year. This has prompted the sale of a number of student housing sites in the city, including one on the Western Road to Ziggurat for more than €3 million, and another at Victoria Cross (the former Crows Nest) reportedly going to UCC for about €2.5 million.