Further evidence that the commercial property market is returning to normal comes with news that Savills is reporting €4.5 million of sales in provincial development land and unfinished estates by its development land and consultancy division.
These sales, according to Savills, indicate that there is now a growing appetite amongst developers, investors and speculators for partially complete developments and lands with medium-to-longer-term development potential in provincial locations.
An example of this type of sale is the partially completed residential scheme at Park Gate on the edge of Tullow, Co Carlow. Cordoned off for the past five years, it comprised 32 unfinished three- and four-bedroom houses and 31 partly serviced plots to the rear of the development.
Prior to the down turn a local developer had built and sold more than 30 houses to the front of the development.
The agent, Savills and Thomas M Byrne & Son, guided €950,000 prior to auction last November 2014. It was eventually sold for more than the guide price. The buyer intends to complete the estate and unfinished houses, and apply for planning permission on the remaining 31 serviced plots.
Another example is the 14.4 acres of zoned residential land and three unfinished houses which were auctioned last October at Brocan Wood in Monasterevin, Co Kildare. The site also has current and expired planning permissions for 137 residential units and a creche. Savills sold the entire lot after auction for a figure close to the guide price of €850,000 to €900,000.
Meanwhile, a partially serviced portion of lands in Kilminchy, Portlaoise extending to 13 acres with full planning permission for 149 houses, together with an adjoining plot of 62.5 acres (zoned “Residential Strategic Reserve”) were eventually sold by Savills for between €1.35 million and €1.4 million. This sale was agreed in December and, due to size of this lot and issues relating to accessing the larger plot of 62 acres, interest stemmed mainly from local investors and farmers seeking a good medium-to-long-term investment.
Also in Portlaoise, Savills secured €290,000 – €90,000 more than the guide – for seven acres zoned “residential one” at Higgs Lane just off the Old Dublin Road on the edge of the town. “These lands would have medium-to-longer-term development potential,” says the agent. “They were placed on the market in mid-September with a guide price of €200,000 and were sold at auction to a developer.”
Savills and Crotty Auctioneers & Property Management sold a 64-acre landbank on the outskirts of Cavan town in December for €740,000. The majority of the lands at Loreto Road, Lisdarn are zoned “phase two lands’’ in the Cavan and Environs Development Plan 2014-2020 and have “undoubted residential development potential”, according to the agent. The farm had been guiding €600,000-€650,000 prior to auction.
"The amount of enquiries from both local and more nationally-based developers, speculators and investors for these properties indicates that demand for provincial development opportunities is returning," says Loman Dempsey Snr of Savills.
"We have noticed a considerable increase in interest from parties in these provincial opportunities which we feel was partly driven by both the closing of the Capital Gains Tax provisions in December 2014 and the fact that there is a scarcity of development opportunities in the Greater Dublin Area which has driven prices in this market. The recent introduction of stricter mortgage lending rules by the Central Bank may act as a stimulus for regional markets as demand from first-time buyers and investors is displaced to these areas due to the lower house prices."
