Fifty years ago this year, the landmark Ardoyne House apartment block in Ballsbridge was built. One of Dublin's first purpose-built luxury apartment schemes, it was designed by architect John L Griffith for UK developers Albion Securities, and cost an estimated €450,000 to construct. Initially built for rental only, many units remained vacant until prices were slashed. Then in 1975 an Irish investor acquired the entire block, and apartments were offered for sale. Now, as it reaches the half century mark, its age is beginning to show and changes are on the cards for Ardoyne House.

In its last published accounts for 2015, the owners’ management company boasted a cash pile of €1.3 million, bolstered by its decision at the turn of the millennium to develop eight mews houses on the grounds, which were priced at €700,000 -€750,000 each when launched in 2002.

In spite of that sizeable rainy-day fund, in 2015 the management company's board of directors sought to bring the scheme up to modern-day standards, and appointed agents Jones Lang LaSalle to find a developer interested in buying up units in the block. This would facilitate the exit of owners who wanted to cash out and not commit substantial funds towards the refurbishment.

The result of that process was developer Richard Barrett's Bartra Capital Property being selected as their preferred developer in November 2015 following an EGM, with Bartra's development director Grainne Hollywood later joining the board. It was agreed then that it would take up to two years to agree purchases with departing owners, agree terms with remaining owners and to come to an agreement on the overall development project.

Bartra has since been busy buying up a number of development sites across Dublin’s best addresses, including Ballsbridge, Dalkey, Dartry and Blackrock, however the Ardoyne House project is surely its most interesting to date.

Hollywood would not disclose how many apartments Bartra is in the process of acquiring in the 46 unit building, although it is likely to be a substantial number.

The developer is offering prices for each apartment on a case-by-case basis, and condition doesn’t seem to be a major consideration.

Substantial refurbishment

The refurbishment works, which would likely be required in the upgrade of any development of this age, include the provision of new façades, insulation, water tanks, curtain wall glazing, balconies, heating systems, security systems and fire/smoke detection and protection systems. Additionally, a total refurbishment of all common areas along with the rewiring and replumbing of the entire building is also planned. It is likely that each apartment will require complete interior refurbishment afterwards.

To carry out the works vacant possession will be required of the entire building, and this will be more problematic for some owners than others. The profile of Ardoyne’s ownership is predominantly a mix of wealthy overseas expats, who rent out or occasionally use their units, and older owner-occupiers, many of whom have been in the building for decades. For the wealthy non-occupants, the complete overhaul of the building may be welcomed, whereas some full-time residents will undoubtedly be less than enamoured by the inconvenience.

The other, and perhaps biggest, issue is that of cost. For owners who opt to not sell up, they will be facing costs well into the six-figure range each. It is anticipated that returning owners will face costs that equate to about €2,700/sqm for the refurbishment works, including internal finishing works to their apartments such as quality new kitchens and bathrooms. Standard two-beds and three-beds in the building extend to approx. 86sqm and 102sqm respectively. With 46 apartments in all, comprising 22 two-beds, 22 three-beds and 2 penthouses, that represents a staggering cost potentially well in excess of €10 million to the relatively small number of owners. Some owners have even combined neighbouring units over the years, and will face hefty upgrade costs for their two or more units if they decide to not sell.

Bartra's plan is especially interesting given that a buyout of individual apartment owners of this magnitude has never been pulled off before by a developer, no matter how generous the offer. In 2007, a surveyor offered the 40 owners of Burleigh Court on Burlington Road €800,000 cash and a free apartment in the same area each in order to unlock its valuable one-acre site, but the deal did not proceed.

Even in suburban Castleknock, the owners of all 16 houses on the Phoenix Gardens cul-de-sac were purported to have been offered up to €2 million each for their modest semi-detached houses if they sold collectively, in spite of individual houses having been worth only about a third of that price if sold separately.

Two key issues

Bartra’s success may hang on two key elements; firstly, they are facilitating the exit of willing sellers from the building at fair prices, and secondly, because the plans do not require all residents to sell, owners holding out for unrealistic prices cannot hold the deal hostage.

However, Bartra may not be the only developers interested in the building. Another well-known developer acquired two apartments in the block from a financial institution last year, after the board chose Bartra as its preferred developer, paying a combined €1.5 million. A director of that development company joined Ardoyne House’s board in November 2016, however their intentions – either as a passive investor owning two units, or as a more active investor – are not yet clear, as the developer did not respond to requests for comment.

Meanwhile, Bartra maintains that its goal for Ardoyne is to restore it to its former glory. The block’s defining feature – its unusual 40-plus metre height – sets it apart from other developments, with the apartments enjoying uninterrupted views across Dublin, with Herbert Park to the east, Dublin City to the west and glimpses of the Dublin mountains to the south and the Docklands to the north.

Those views, combined with its stellar location, generous proportions, gas heating and on-site porters helped to maintain its position over the years as a premier residential address. The refurbished block would certainly rival its more modern competitors, with prices of new Ballsbridge developments now regularly breaching the €10,000/sqm mark.

Bartra is also most likely to be acutely aware of Ardoyne’s substantial lands, which have a low level of site coverage – the apartments themselves occupying just a small portion. In all the block sits on about two acres, with about 0.8 acres of lawns between the building and adjoining Herbert Park and the remainder laid out as surface parking, lock-up units and a driveway. It is not inconceivable that there may be scope to make better use of these lands in future to accommodate valuable new units.

With proposed costs for the planned refurbishment well into six-figures per apartment, the Ardoyne House upgrade is on a scale not yet witnessed in an Irish context. Only time will tell if other owners’ management companies will follow suit in years to come and bring developers such as Bartra on board to finance their upgrades.