DevelopmentLand: A site in Sandyford, which can be used for an office or apartment scheme and is located in a prime spot beside transport links, has sold for a strong price. Jack Fagan, Property Editor, reports
Cork developer John Fleming has paid close to €25 million for a development site of 5.74 acres in Sandyford, Dublin 18, which can be used for either an office or an apartment scheme.
Joint agents DTZ Sherry FitzGerald and Hamilton Osborne King handled the sale for the Galway-based consortium TBD Properties which bought the land over four years ago for an estimated €14 million. When holding charges and planning permission fees are taken into account, the site probably accounts for around €19m.
The land originally formed part of Glencairn, the large mansion and extensive grounds sold by the British Foreign Office to Michael Cotter's Park Developments around six years ago. The British Ambassador still resides in Glencairn even though the Foreign Office purchased alternative accommodation in Rathfarnham several years ago.
TBD Properties secured planning permission to develop 34,852 sq m (375,143 sq ft) of office accommodation in four three to seven-storey blocks but no sooner had the approval come through when the office market took a nose dive.
Sandyford and other out-of-town locations were the first to take a hit because of the huge volume of new space already completed in the suburbs. Developers with empty buildings have since been offering lengthy rent-free periods, fit-outs and other incentives without much success.
Newly built office buildings in the inner city have fared somewhat better - even in unfashionable locations that would have been considered somewhat unsafe.
However, even these developers have had to settle for substantially lower rents than originally envisaged because of the over-supply.
After granting permission for the office development on the Glencairn site, Dún Laoghaire Rathdown County Council altered the zoning of most of the site (4.06 acres) to give developers the option of alternatively using it for a housing scheme. Several other developers in the same area who had hoped to embark on large office developments are also considering the residential option rather than waiting around for years until the office market recovers.
Because the TBD site occupies a pivotal position near the junction of Murphystown Road and the Sandyford interchange of the South Eastern Motorway - not to mention the new LUAS station - the chances are that the new owner will get planning permission for a high density development.
A feasibility study by architects Horan Keogan Ryan, suggesting that a scheme of 60 units per acre would be achievable under the planning guidelines, may well prove to be over optimistic. At the end of the day, the likelihood is that at least 300 apartments will be approved for the site.
Two other apartment schemes launched in the same general area in recent months by both Park Developments and Shannon Homes sold particularly well over the launch weekends.
