A rental portfolio of 1,170 new homes in Dublin, as yet unbuilt and set for four city sites, is being offered to the investment market from this week, with over €425 million in funding sought, and the promise of over €20m-plus in rents.
Going on current rents and accommodation shortages driving further increase, there would be a return of 4.6%, rising to 5.25% during construction, and major European and other funds such as Kennedy Wilson are expected to show interest.
What’s billed as Ireland’s largest private rented sector portfolio and titled ‘Dublin Living’ hits the market for over €425m via Savills, with completion between late 2018 and early 2020.
Offered in one lot, the portfolio spanning four schemes on sites is owned by the Marlet Property Group in conjunction with the group’s finance partner M&G Investments.
They are at Mount Argus, already under construction, and St Clare’s in Harold’s Cross, D6; Carriglea in Bluebell, D12; and the Cabra Road development in Dublin 7, the largest with 408 units.
Indicators based on current lets in older existing multi-family schemes, put projected net rental income at €20.5m, allowing for market standard operational costs.
However, according to Savills, with vacancy at just 1.45% in the capital’s rental market, rents are forecast to rise on average 7.3% pa to 2019. “This estimated rental figure is forecast to increase significantly during the construction period of the four schemes due to the critical undersupply of private rented accommodation in Dublin and the consequent inflationary pressure on rents,” says Savills research director Dr John McCartney.
He adds that the number of households renting privately in Dublin has grown by 42,400 since 2012, with supply failing to come close to demand.
Most of the units in this forward-funding opportunity, over 750, are two-bed apartments, 255 are one beds and 165 are three beds.
Interest is expected “from domestic and overseas investors looking to establish a considerable foothold in Dublin’s private rented sector, capitalising on rental growth prospects in the city, the agents say.
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