How land prices size up: Kinsale factor to the fore
At a time of uncertainty in the residential land development market, two land sales with Cork agency Linsey won’t provide any clue as to sentiment and demand: the value of one is 20 times that of the other.
Coming just on the back of the sale of a compact, c 1.3-acre development site in the Munster property hotspot of Kinsale, for €850,0000 (or €640,000 an acre), comes another new-to-market offer, of 26 acres, on the far side of Cork city, at Whitechurch. It is priced at €800,000, all-in, or €30,000 per acre.
Nine kilometres north of Cork city, the 26.78 acres of zoned land have lapsed planning for 200 houses (secured in the mid-2000s by Castlelands Construction). While the land missed the building boom of the Celtic Tiger, it is excellent farmland, and other low-medium density housing developments are being built in the close-knit community.
This level land block is now being brought to market by Edward Hanafin, of Lisney, acting for Castleands’ joint statutory receivers, McStay Luby.
Mr Hanafin is selling by private treaty, and it’s likely to be seen as a medium-term play by would-be developers and builders, who may take a softly-softly approach to carrying its costs, awaiting the next swell of demand around the very well-serviced Whitechurch community.
At €800,000, it appears to be about twice the cost of basic agricultural land, and, if leased, could provide ongoing income, pending planning and a development drive.
If acquired at the asking price, and if a development of 200 new-builds transpires, as per the previous planning (it’s less than eight units to the acre), then raw site costs per single new-build would be just €4,000 per stand.
Worth a play?
Meanwhile, that stands in contrast to a concluded site sale of 1.33 acres at Blind Gate and Rampart Lane, Kinsale.
Here, the former St Joseph’s School, with 10,500 sq ft of buildings, has been bought for €850,000 (€100,000 over the asking price) by an unidentified Dublin developer who, according to David McCarthy, of Lisney, has not previously developed in Cork.
Adjacent to the ongoing Convent Garden development, being done by Cumnor Construction, it’s currently zoned “established educational, institutional, and civic uses” in the Kinsale Town Development Plan, due for review, in conjunction with the existing Cork County Development Plan, by December 2020.
“Subject to a material contravention in the zoning, the plan is to develop a low-density residential scheme, subject to planning permission,” said Mr McCarthy.
The Whitechurch/Kinsale sales come at a time of overall lull in demand for development land in the greater Cork market, with a number of significant development players now in possession of sufficient landbanks for several years to come.
That dip in demand was confirmed by this week’s survey statistics from another Irish agency, Cushman & Wakefield, which found a drop in overall land transactions nationally, down from 203 in 2018, to 125 in 2019.
Despite that decline in sales volumes, and especially in the sub-€5m value bracket (which fell by more than 40%), 2019 was nonetheless notable for €1.3bn invested in development land, with the year characterised by a number of very substantial sales.
According to Cushman & Wakefield, outside of the Dublin region, Cork was the most active market, with €133m spent on development land, about 10% of the national total.
That was up 26% from 2018, in terms of overall spend, possibly accounted for by several substantial deals, such as purchases by Glenveagh.
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