US property giant Marathon Asset Management has instructed joint agents Savills Ireland and Eastdil Secured, a subsidiary of Wells Fargo Bank, to sell a portfolio of more than 800 apartments and houses it owns across 16 developments in Dublin and Cork.
The sale of the XVI (16) portfolio is being targeted towards institutional investors, and will, upon completion, represent the biggest single disposal of buy-to-let properties to have taken place in the Irish market to date.
Last month, European property firm LRC Group set a new benchmark with its acquisition for €150 million of 600 mainly residential assets in Dublin, Cork and Galway from Oaktree affiliate Targeted Investment Opportunities (TIO).
In the case of the XVI portfolio, it is understood the selling agents are guiding a price of €240 million. Should that figure be achieved, it would represent a significant premium on Marathon Asset Management’s original investment.
Plum portfolio
In 2015, the New York-headquartered company was reported to have paid Nama €120 million for the 588 apartments within the Plum portfolio. Distributed across seven sought-after Dublin developments, the units account for the majority of the XVI portfolio which is now being offered for sale.
Included in the Plum portfolio’s prime assets were 101 apartments at Beechwood Court in Stillorgan, 67 units at Time Place on Corrig Road in Sandyford, 39 apartments at Heywood Court at Northwood in Santry and 128 apartments at Northern Cross on the Malahide Road.
Since securing ownership of the properties in 2015, Marathon Asset Management has taken advantage of the surge in demand for rental accommodation in Dublin.
In the case of the 101 apartments it owns at Beechwood Court, for instance, the company has increased its gross annual rental income from €1.5 million to €2.08 million.
The 815 apartments and houses now being offered for sale as part of the wider XVI portfolio are 98 per cent occupied and delivering gross annual rental income of €14.7 million.
With the current average passing rent coming in below the prevailing market rate, at €1,530 per month, the selling agents believe there is scope to increase the overall annual income to €17.7 million.
Marathon’s move to dispose of the XVI portfolio follows its recent sale for €222 million of the landmark Heuston South Quarter (HSQ) in Dublin city to developer Joe O’Reilly’s Chartered Land and Henderson Park Capital.
HSQ portfolio
The price secured by Marathon represented an uplift of 85 per cent on the €120 million it paid Lloyds Banking Group to acquire the loans associated with the scheme in 2014.
The HSQ portfolio comprises 266 apartments, 9,877sq m (106,319sq ft) of grade A office space, 4,463sq m (48,034sq ft) of commercial space, and a 1.47 hectare (3.63 acre) development site.
Marathon’s move to offload both the HSQ and XVI portfolios is being viewed by property industry sources as being in line with its standard approach of acquiring assets in distressed property markets, holding them for a period, and then reselling them once prices have recovered sufficiently.
The XVI portfolio includes the following assets:
– 101 apartments at Beechwood Court in Stillorgan, Co Dublin. Current rental income of €2.08 million per annum.
– 67 apartments at Time Place, Corrig Road, Sandyford, Dublin 18. Current rental income of €1.34 million per annum.
– 128 apartments at Northern Cross, Malahide Road, Dublin 13. Current rental income of €2.49 million per annum.
- 142 units at Carrington Park, Northwood, Santry. Dublin 9. Current rental income of €2.49 million per annum
– 39 apartments at Heywood Court, Northwood, Santry, Dublin 9. Current rental income of €620,000 per annum.
– 98 apartments at Richmond Gardens, Richmond Avenue, Dublin 3. Current rental income of €1.8 million per annum.
– 41 apartments at Xavier Court, Upper Sherrard Street, Dublin 1. Current rental income of €770,000 per annum.
– 29 apartments at Belville Court, Johnstown Road, Cabinteely, Dublin 18. Current rental income of €530,000 per annum.
– 29 apartments at Russell Court, Feltrim Road, Swords, Co Dublin. Current rental income of €460,000 per annum.
– 21 apartments at Belleville & The Mills, Castleknock, Dublin 15. Current rental income of €400,000 per annum.
– 18 apartments at St Edmund’s, Palmerstown, Dublin 20. Current rental income of €350,000 per annum.
– 14 apartments at The Oaks, Porterstown Road, Clonsilla, Dublin 15. Current rental income of €260,000 per annum.
– 12 apartments at Custom House Square, IFSC, Dublin 1. Current rental income of €270,000 per annum.
– 12 houses on East Arran Street, Smithfield, Dublin 7. Current rental income of €230,000 per annum.
– 14 apartments at Coopers Court, Bond Street, Dublin 8. Current rental income of €230,000 per annum.
– 50 apartments at Harty’s Quay, Rochestown Road, Cork. Current rental income of €760,000 per annum.
