International interest expected as Cork apartment block goes on market for €17.5m
An entire apartment development with 62 units in Cork city’s suburbs is for sale, as a single lot, being offered to investors with a guide price of €17.5m. Going to the open market as a receiver-driven sale this week is Park Avenue, a high-end residential scheme in four blocks off the South Douglas Road, developed by the Kenny Group, completed a decade ago, and with its units rented since then.
Low-key moves to sell Park Avenue’s apartments were mooted last year, both as individual units and in blocks — now, there is a change of agents, a decision to sell publicly on the open market as one lot, and all aimed at the lucrative and hungry buy to tent/private rental sector. Interestingly, 53 of the 62 apartments are now vacant and ready for fresh lettings, once in new ownership.
Both national fund, reit and European bidding interest is expected by Park Avenue’s selling agents CBRE in Cork and Dublin, who say the chance to buy out an entire 62-unit development, with two commercial elements, and 82 car parking spaces is quite rare. The property offers an investor the unique opportunity to acquire 100% of the apartments in the scheme,” said Brian Edward of CBRE Cork.
Mr Edward said he estimates the market rents of the 62 units would be in the order of €1.2m, with one-beds likely to rent at €1,300 per month, two-beds at €1,700 and three-beds at €2,000.
After allowing for operating expenses of approx 20%, “this reflects a reversionary yield of approximately 5.25%, based on full occupancy at market rent,” Mr Edwards said.
The development was built on a former HB ice cream plant, near the Dosco estate and Cross Douglas Road, halfway between Cork city centre and Douglas village, about 1.5 kilometres from each, and with easy ring road and link road access.
It completed in 2009, after the property collapse and plans to sell the well-specced, larger than average apartments individually were switched to renting in bulk to workers in the IT sector, by Galway-based developers the Kenny Group who also delivered a number of student accommodation schemes in Cork, Limerick, Galway and elsewhere.
The offer of Park Avenue to investors follows other bulk apartment sales to the private rental sector (buy to rent) in Cork such as the Elysian, City Square, on Watercourse Road, and at Ballincollig. “The demand for PRS investments in Ireland has increased appreciably over the past 12/24 months.
“PRS investments accounted for just 6% of total investment in the Irish market in 2016, this rose significantly to 30% in 2018,” said CBRE’s Kyle Rothwell, adding “an asset of this quality will attract strong national and European investor interest.”
