THE ONGOING sale of five adjoining retail buildings at Castle Market in Dublin city centre has generated more enquiries from private investors than any other commercial property since the market took a nosedive in 2008.
Savills logged more than 120 enquiries after seeking offers over €2.7 million for the parade of red-brick buildings in the fashionable Victorian shopping and dining enclave between Drury Street and South William Street.
"Our phones did not stop ringing for days," says investment specialist Domhnaill O'Sullivan. He said they later took more than 40 parties through the buildings as a result of which they got a "significant" number of offers, some of them for individual buildings and others for the entire portfolio.
The five buildings are now "under offer" to a single investor awaiting the completion of legal procedures. The top bid is likely to be in the region of €2.9 million - a long way short of the €12.5 million paid for the same properties in June, 2007, by developer Bernard McNamara. With these prized city centre buildings set to lose 77 per cent of their value in less than five years, property specialists will ponder on the size of the losses about to be recorded for many provincial buildings and sites bought at the peak of the market.
The strong response to the Castle Market sale will not surprise many of the large commercial agents in the city who say there are any number of cash buyers looking for well located investment properties costing anything up to € 5 million. However, the main banks are not showing any signs of wanting to re-engage with the sector that played such a large part in their financial woes.
Castle Market is but one example of how fortunes can be made and lost even in one of the most central parts of the city.
Green Property virtually controlled Castle Market up to 2003 - it owned 10 of the 11 buildings in the pedestrianised street, the exception being Grogan's pub - when it decided to sell to Francis Rhatigan and Chris Jones of Ellier Developments for €13 million.
Ellier managed to increase rental income from the nine retail buildings within a short time but sensing that the property market was moving into dangerous territory in 2007, it decided to shift this investment as well as others. Fortunately for Ellier, the banks were still competing for investment opportunities, and when Castle Market hit the market there were any number of investors pitching for it.
An effective marketing campaign by agents Ben Pearson and Peter Brown led to the sale of the nine buildings for €33 million, with McNamara buying all five on the same side of the street as Grogan's pub. The four double fronted properties on the opposite side of the street made even bigger money because of larger floorplates.
The highest prices were paid for the two corner buildings. The former Cooke's restaurant, now trading as Gourmet Burger Kitchen, was bought by Dakota Bar owner Paul Keaveney for €5.8 million while the former Foxford building was acquired by Martin Murray for €4.78 million.
May Frisby of Pasta Fresca paid close to €4 million for what is now Bedlam Restaurant. Next door the owners of the Rohu Furs store also paid a fairly similar figure to acquire their own premises. When McNamara bought the five properties on the opposite side of the street he settled for an initial return of only 1.68 per cent. The next owner can bank on a yield of at least 9 per cent as the contracted rents with upwards-only review clauses come to €257,000.
The best located of the shops is the Costume store on the corner which pays rent of €60,500 per annum. Next door Crown Jewels pay €54,500 while Harlequin has a contracted rent of €42,000. The rent bill for Murphy Sheehy is €52,500 while the smallest of the buildings, La Maison Des Gourmet, has an annual charge of €47,500.
