US lender Bain Capital will on Saturday begin selling more than 170 homes, priced at up to €720,000, from one of three sites it bought last year for €90 million.
Bain Capital, led by former banker David Cullen, last year paid a reported €90 million for three Dublin sites with planning permission for 874 houses and apartments.
The company is launching one of the developments, Scholarstown Wood in Rathfarnham, on Saturday, with asking prices of between €500,000 for three-bed terraced homes and €720,000 for five-bedroom detached houses.
Scholarstown is a mix of 314 houses and apartments, 140 of which have already been sold. Developer Regency built the homes while Bain provided the funding.
Assuming the properties sell for an average of €500,000, they would go for a total of €85 million. On the basis of the average Dublin house price in the second quarter this year, which was €375,000, the total would be €65.15 million.
The fact that Bain’s sites will produce up to a further 560 homes mean the US investor is in line for a multimillion euro profit on the deal struck last year.
Bain bought the sites at Scholarstown, Hollwoodrath in Hollystown and Station Manor in Portmarnock, from a consortium of Regency, its developer on the Rathfarnham project; local property dealer, Avestus; and New York-based fund Centrebridge, which was the majority shareholder in the venture.
Housing shortage
The trio originally paid €60 million for the three sites, but spent further cash building some homes on the land, several of which sold quickly when they were put on the market.
Bain is launching the Scholarstown development as the Republic’s housing shortage continues, forcing up prices. According to some estimates, the average cost of buying a home was €254,000 at the end of June, almost 6 per cent more than 12 months before.
Dublin prices are just below the level at which they peaked 11 years ago ahead of a crash that plunged the Republic into a six-year recession. A survey by the Economist newspaper this week claimed that houses in the capital are 25 per cent overvalued when compared to the incomes earned by those living in the city.
Bain recently sold a student apartment complex in central Dublin for €47 million to Invesco Real Estate, just months after buying it for €8 million.
Bain Capital Ireland started out as Broadhaven, a joint venture in which businessman Dermot Desmond was one of the original investors. He has since left and the US fund is now the company's sole backer.
The business originally intended invested in housing and property-related ventures. Boston-based Bain Capital is a private equity fund that manages more than $95 billion (€82 billion) on behalf of its investors.
