Distressed Dublin Project Hits the Market
A new 420-apartment development in Dublin is for sale with a price tag of €70 million, the largest sale of a distressed residential complex in the city. Clancy Quay, which overlooks the River Liffey, is an ambitious 13.5-acre development led by builder David Kennedy. It reached a high stage of construction before the property market collapsed in 2008.
As of last week, 228 apartments were rented in the project, with 42 in rental process and another 138 units ready to rent as soon as a new owner arrives to provide furnishings, according to the Irish Times. Twelve penthouses still remain in shell condition.
Current rent income equals €3.17million a year, the paper reports. Fergus O'Farrell of Savills estimates the overall rent to grow to €6.8 million once the remaining units are rented out, with an expected gross yield around 9 per cent.
That yield doesn't include valuation for the remaining 8.45 acres which have planning permission for a 15-story hotel and more apartments than are currently in the first phase.
The developer paid €25.4 million for the development and reached a carrying value of €190 million by the end of 2008, before the market fell apart.
The project was financed by Bank of Scotland and National Irish Bank, according to the Irish Times.
The current level of debt to the banks is not known, but it is estimated to be about €230 million.
Industry experts believe American property firm Kennedy Wilson will participate in the bidding, the Times reports. The firm previously purchased two similar properties in the city. Other bidders for the property include funds from the U.K., U.S. and Germany.