Gasworks apartments in D4 for sale at €43m

DUBLINS MOST distinctive apartment block, The Alliance Building in the Gasworks development at Ringsend, Dublin 4, is to be offered for sale on the international market because of the high level of enquiries from overseas property companies and wealthy investors.

Savills is quoting a guide price of €43 million for all 210 apartments in the nine-storey glazed, cylindrical block which is currently producing an annual rent roll of €3.25 million. This equates to an income yield of 7.25 per cent.

Even at a €43 million valuation, it is unlikely that Ulster Bank will recover the entire development costs it advanced to developer Liam Carroll whose property empire collapsed with bank borrowings of €1.2 billion.

Paul McCann of accountants Grant Thornton has been appointed receiver to the Carroll company which handled the development.

There has been any number of enquiries about the landmark block from as far away as the US and Russia as well as northern Europe and the UK since this newspaper reported in June that the building would be going for sale. The collapse of the Irish property market and the prospects for buying heavily discounted property investments has been widely reported around the world since the property bubble burst in 2008.

Although three years have elapsed since the market went into freefall, only three significant office investments have so far been offered for sale because of uncertainty about Government plans to allow retrospective rent reviews.

Mark Reynolds of Savills said that with no such uncertainties hanging over the residential sector he expected investors to move quickly and pitch for what was “a superb building with a fantastic rental profile”.

The 202 two-bedroom apartments in the building – there are also eight one-beds on the ground floor – are rented at an average of €1,300 a month. Even more interestingly, around 80 per cent of the units are rented by staff from Google’s European headquarters in the adjoining office campus.

Google’s decision earlier this year to acquire its two office buildings and the newly built Montevetro block on Barrow Street for around €200 million will provide additional comfort for those bidding for the Alliance Building. Not surprisingly it has a consistently high occupancy rate which stood at 97 per cent last week.

Fergus O’Farrell, director of investments at Savills, said it was extremely rare that an asset of this quality and scale was brought to the market. “We expect interest will come from across the international investment sector.”

Neither Irish institutions nor overseas funds operating in Dublin have traded in residential blocks over the past two decades. It is a different matter on the Continent where institutions control much of the apartment market. One possibility – although it must be unlikely at a time when the various third-level colleges are complaining about a shortfall in funding – is that the Alliance Building might be bought either Trinity College or UCD.

The €43 million guide price works out at an average value of €205,000 per apartment, including car parking space. Savilles say that the two-bed units would now probably make €260,000 on the open market while one-beds should fetch €180,000 each. The 230 car-parking spaces on site were originally valued at €40,000 each.

The two-bedroom apartments have an average floor area of 63sq m (678sq ft) and have the main bedroom and living areas along the outer perimeter to allow people living on the upper floors to have clear views over much of the city and its suburbs.

Serious investors running a rule over The Alliance will take some satisfaction from the fact that the entire apartment complex is in single ownership. That could well have been different as agents Hooke MacDonald managed to sell around 40 of them at the much delayed launch in 2006.

Unusually, none of the purchasers opted to sign contracts and one by one they dropped out as they realised that the apartments were overpriced.

Carroll could have sold the apartments the previous year at a significant profit but delayed the official launch because he was convinced that prices would continue rising. His judgment was flawed and with the banks in severe difficulties because of over-borrowing by him and other leading developers, a whole range of companies in the Zoe group were wound up by the courts.