A Cork city apartment development with shops and parking, developed at a boom- time cost of €50m before going into a protracted receivership, is now on offer to Irish and international investors, guided at €28m, with a mix of 127 apartments — all of which are rented out — and some commercial space.
City Square is one of Cork’s largest apartment “multi-family unit” scheme sell-offs, and is likely to have an appeal to strong Irish and overseas fund buyers, given that it has overall rent-roll of about €2m per annum or €40,000 per week.
About the only other large-scale sale to top it in coming months will be of the 217-apartment and mixed-use Elysian project by City Hall, which is likely to sell for more than €70m and which is under advanced negotiations.
Developed on an expensively assembled brownfield city site which spans three acres at Cork’s Watercourse Rd between the city centre and Blackpool, City Square was built over an enormous basement car park with ground floor commercial units with city renewal tax breaks, and 145 apartments above, in three blocks with communal raised gardens and rooftop terraces.
It launched in late 2007, helping transform a run-down area by Ladys Well which included old abattoirs.
There are hopes under the National Planning Framework for a Cork-Limerick motorway which might also give the Blackpool suburb a second, badly needed fillip.
The investment sale this month at City Square is being handled by Savills Cork, who say the €28m price tag will show a return of 5.5% to its new owners, from a residential rent-roll of €1.816m, topped up by a further €177,000 in commercial unit income, with scope to boost that income even further by letting remaining unoccupied units.
City Square was developed by the Conway family-owned Frinailla Ltd, who assembled sites at Dennehy’s Cross, the Good Shepherd Convent, Carrs Hill Douglas, and Grand Parade among others, with many now also sold on in bulk since the crash and subsequent receiverships.
Design across three blocks ranging from two to five levels was by Kiosk Architects; on completion it had 145 apartments, with 18 since sold on individually, plus 16 commercial/retail units and 280 basement car spaces, with lift access to apartments overhead.
Prices on City Square’s launch in 2007 were €275,000 for one-beds, through €365,000/€425,000 for two-beds, and up to €500,000 for 1,300 sq ft three-beds. Car parking spaces were offered at €35,000 each.
Agents Savills say that with recent rents secured of €1,200 pm for one-beds, €1,500 pm for two-beds, and €1,700 pm for three-beds shows scope at City Square for future rent increases, and income boost, if other commercial units are let.
The asking price of €28m can be roughly put at €220,000 per apartment, even excluding the value of the commercial units, making it less than the viable cost of a new apartment building.
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