It would probably have made up to €30 million more at this time last year, but the sale of this large site in Sandyford is still an important test of the strength of the market for development sites, writes Jack Fagan
The largest remaining development site in Sandyford, Dublin 18 - covering an area of 2.05 hectares (5.06 acres) - is expected to sell for around €90 million when it goes to tender on October 23rd. The joint selling agents are Savills HOK and CB Richard Ellis.
The sale will be an important test of the strength of the market for development sites because of its high profile location and long term potential to accommodate a substantial mixed-use development. Site values in most areas have slipped in recent months by at least 15 per cent and, even with that readjustment, many of the plots - particularly in the outer Dublin suburbs and adjoining counties - are still proving difficult to shift because of the slowdown in the new homes market and tighter lending policies by banks.
Anglo Irish Bank, once the dominant player in the market, is now content to take a back seat, leaving the way open for Bank of Scotland and Ulster Bank to fund some of the best located sites. If a buyer is found for the Sandyford land, the likelihood is that it will be a local developer with a major stake in the area.
All sides acknowledge that the five acres could have made between €110 million and €120 million had it been put on the market a year ago rather than now. Two other sites in the same area sold for at least €20 million an acre - the Cork-based Fleming Construction paid €165 million for the eight-acre Allegro site nearby while John Lally's Lalco company paid €100 million for the five-acre FAAC Electronics site at the entrance to the estate.
The latest Sandyford site to go for sale was owned for many years by the Ulster Bank - it still has a data centre there - and was part of a €1.5 billion portfolio the bank parent, Royal Bank of Scotland, sold to Morgan Stanley Real Estate at the end of 2005.
Developers running the rule over it could expect to get approval for a high density scheme which would include apartments, offices and some showrooms.
A draft urban framework plan for Sandyford prepared by Dún Laoghaire Rathdown County Council has recommended a district landmark building height of up to 18 storeys to include residential and commercial facilities.
The selling agents say that there is a precedent already in Sandyford for a site of this size to get permission for a medium to high density scheme. It is across the road from the Luas service which completes the journey into St Stephen's Green in about 20 minutes. The site has 185 metres of frontage on to Blackthorn Avenue and adjoins Sandyford Business Centre and AIB finance and leasing headquarters.
A new development will look out over Sandyford Reservoir and Dublin Bay towards the city on one side while the southerly orientation will be towards the Dublin mountains.
Sandyford has substantially more developments under way at the moment than any other part of Dublin, including the docklands. The huge level of activity resembles parts of Dubai, though in that city there is a strong preference for tall buildings.
