Blocks of the boom start to pay dividends

THE UK-BASED Comer Group has bought two completed apartment blocks at Blanchardstown and Santry in Dublin at an overall cost of more than €22 million.

A third block of apartments in Dublin's north inner city, developed by Wexford TD Mick Wallace, has also found a buyer. Meanwhile, an overseas investor has paid €3 million for an apartment development on Eglinton Road in Ballsbridge. The highest price of all, just over €40 million, was paid by Bank of Ireland investor Kennedy Wilson for Dublin's most distinctive apartment block, The Alliance Building, in Ringsend, Dublin 4.

The sale of all five residential developments is likely to encourage Nama and the various banks to speed up the disposal of distressed properties in the Dublin area. It will take considerably longer to shift unsold apartments blocks in provincial towns and villages even where values have been slashed by up to 70 per cent.

The Comer Group, run by Galway brothers Luke and Brian Comer, has made it known that it are interested in acquiring a substantial number of Dublin apartments at a bulk discount. The company is currently offloading a broad portfolio of properties in Germany, including retail centres, hotels and offices, with the intention of reinvesting the proceeds in Ireland.

The Comers paid in the region of €14 million for a 12-storey apartment block built by Green Property alongside the Crown Plaza Hotel in Blanchardstown Town Centre. The 96 two-bed apartments work out at a value of €140,000 to €150,000. However, the 800sq ft homes with dual aspects will have to be fitted out before they can be let.

The adjacent Crown Plaza Hotel was also developed by Green Property Co and sold to the Tifco Group for around €30 million. The Tifco Group, run by hotel specialist Aidan Crowe, also has Clontarf Castle and the Crown Plaza in Santry and manages a string of hotels including the Burlington in Dublin, Ashford Castle and Parknasilla. Although Green Property had no direct interest in developing either apartments or a hotel in west Dublin, it was obliged to complete both projects as part of the master plan for the Blanchardstown town centre.

The second purchase by the Comers involved 83 unsold apartments in Milners Square at Santry, Dublin 9, which were bought at €8.5 million. They were part of a larger scheme carried out by the Hanly Group, now in receivership. Agents Kelly Walsh handled the bulk sale on behalf of receiver David Hughes of Ernst & Young. The sale also included a one-acre excavated site which will have to be filled in before it can be used for new housing. The Comers will have to spend about €5,000 to €6,000 to fit out each of the apartments. Two-bedroom homes in the scheme were orignally priced at €450,000 when they were launched in 2007. A number of the units were sold over the past year at € 160,000 each. The price paid by the Comer Group puts a valuation of just over €102,000 on each of the units - before the one-acre development site is taken into consideration.

Meanwhile, a group of Irish investors has agreed to pay close to the asking price of € 3.75 million for 27 apartments and three retail units built by Wallace at Sartini Court on Upper Dominick Street in Dublin 1. David Browne of HT Meagher O'Reilly handled the sale on behalf of the Wallace company to meet borrowings from the Ulster Bank.

Separately, ACC Bank has secured summary judgment orders for more than € 19 million against the independent TD and his company which is in receivership. The apartments are currently producing €348,000 per annum and when the shops are also leased, the rent roll is expected to rise to around €388,000. At that figure, the group of investors can expect a return of more than 9 per cent.

Kennedy Wilson will have to settle for a return of around 7.25 per cent from the Alliance Building in the Gasworks development, where the 210 apartments are producing an annual rent roll of €3.25 million.

Savills had originally been quoting €43 million for what is Dublin's most distinctive apartment block. The sale was called by Paul McCann of accountants Grant Thornton, who is acting as receiver to Liam Carroll's property empire, which collapsed with bank borrowings of €1.2 million. About 80 per cent of the apartments are rented by staff from Google's European headquarters in the adjoining office campus.

Savills, which is handling the sale of the Alliance Building, also completed the sale of Errigal House on Eglinton Road in Ballsbridge for around €3 million. The 22 apartments are let at an average of €1,500 per month and will give the new owner - an overseas investor - a return of around 7.5 per cent.

The apartments were developed in the 1960s and substantially refurbished around 2006. They were sold on the instructions of Kieran Wallace of KPMG.