ONE OF the iconic symbols of the Irish property collapse – the Alliance Building in the Gasworks development in Ringsend, Dublin 4 – is shortly to be offered for sale as a single investment. All 210 apartments are currently rented at an average of €1,300 per month, equating to an annual rent roll of around €3,276,000.
Accountants Grant Thornton, appointed receivers by the Ulster Bank for some of Liam Carroll’s collapsed property empire, are shortly to appoint an estate agency to handle the sale of the first high value apartment investment in the city since the market went into freefall.
Early indications are that the glazed nine-storey cylindrical block, known as The Alliance Building, could make between €35 million and €42 million,reflecting a valuation of €170,000 to €200,000 for each of the two-bedroom apartments.
These valuations are a very long way from the original asking prices of €675,000 to €750,000. The 210 apartments include four one-bedroom units which would probably make around €130,000 at this stage. Parking spaces were originally priced at an additional €40,000.
If the overall selling price does not now exceed €42 million, Ulster Bank will be unlikely to recover anything like full development costs, which were considerably higher than for conventional apartment blocks because of the intricacies of putting a glazed circular building with a full height central courtyard inside the metal struts of the Victorian gasholder.
The restraints imposed by the shape of the block has meant that the layout of individual apartments has not appealed to all viewers – although no one can question the superb views over the city from many of the upper floors.
The first launch of the apartment scheme had been delayed by Carroll until June 2006, in the belief that steadily rising prices would allow him to maximise profits from what was an unusual development.
His calculation proved wide of the mark as there were already ominous signs that the property market and the banks were in trouble. “People began to realise that the selling prices generally were off the wall,” says a now chastened new homes estate agent, “and on top of that it was clear that the banks were pulling back on mortgages.”
Despite the rapidly changing market conditions, agents Hooke MacDonald managed to shift 40 of the apartments.
However, none of those who paid booking deposits went on to sign contracts and one by one they dropped out as they realised that the apartments were overpriced.
With the apartment market then clearly on the slide, Zoe Developments sought a way out of its dilemma by applying for planning permission to convert the Gasworks building into a 52-bedroom hotel. It got permission from Dublin City Council, but within a short time it became apparent that the hotel market in Dublin 4 was also doomed because of price cutting and a surfeit of bedrooms.
All this time, Google was rapidly building up its work programme and its staffing on an adjoining site and, in the first bit of luck for the Gasworks development, it became obvious that there was a ready market on its doorstop for rental apartments.
Much of the demand came from Google’s 1,200 staff as well as from Facebook and other IT companies opening in the docklands. Google’s recent purchase of its two office buildings and the newly completed Montevetro block on Barrow Street for almost €200 million has undoubtedly reinforced its commitment to the south Dublin docklands. The Gasworks will be seen by investors as one of the best residential investments in the city – provided they don’t have to pay too much for it.