Canadian real estate company pays €40m for four apartment developments

A Canadian real estate company specialising in multi-family housing has paid more than €40 million for four apartment developments in the Dublin suburbs which were put into receivership by the Bank of Scotland (Ireland).

CAPREIT, a publicly-quoted investment trust with more than 30,000 apartments and townhouses across Canada, was a surprise bidder for the 338 Dublin apartments which are currently producing rents of €3,845,000 per annum. The new owners will earn a gross yield of about 9.5 per cent.

Dessie Kilkenny of Savills had been quoting in excess of €35.5 million for all four developments which were being finished off when the property market crashed. Each of the four attracted over half a dozen bidders. CAPREIT, advised by Investec and CBRE, is understood to have been the only bidder for the entire portfolio.

Apartment rents in areas close to the city centre have been rising steadily in recent months because of a shortage of supply and the collapse in new sales due to the banking crisis and the ever-increasing level of property taxes being introduced.

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CAPREIT has bought 51 two and three-bedroom apartments and 12 one-beds at Rockbrook in Sandyford for an average price of more than €150,000 each. In North King Street, close to the city centre, 53 two-beds, 26 one-beds and 4 three-beds in the Kings Court scheme are changing hands at about €130,000 each.

Financial difficulties
At the Camac Crescent scheme in Inchicore, 49 two-beds, 20 three-beds and 21 one-beds work out at more than €110,000 each. The writedown in value is even greater in Tallaght where 49 one-beds, 47 two-beds and 6 three-beds in the Priorsgate scheme have been sold for an average of over €70,000 each.

The Cork-based Fleming Group ran into serious financial difficulties because of its involvement in the Sandyford scheme. It had little chance from the start after paying over €243 million for a mere 11.3 acres. Savills has now secured significantly more than the €9 million guide price for 63 of 195 apartments in the Rockbrook scheme.

Savills has also secured in excess of the guide price of €9.5 million for all 83 apartments and six retail units in the Kings Court development at North King Street, which was promoted by Eugene and Deirdre O’Neill.

Liam Carroll's Danninger Group was the developer of the Camac Crescent apartments in Inchicore where the guide price for 90 of 110 homes was €8.5 million.

A similar guide price was also exceeded when Savills sold 102 of the 198 apartments built buy Elliotts at Priorsgate in Tallaght. The sale also included 2,508sq m (26,996sq ft) of commercial buildings and a separate office block extending to 543sq m (5,845sq ft) on an adjacent site.

Jack Fagan

Jack Fagan

Jack Fagan is the former commercial-property editor of The Irish Times