The largest industrial complex to come on the market in Dublin this year is to be sold by tender and is expected to fetch up to £15 million.
The property, the former Semperit plant at Killeen Road, Ballyfermot, is being sold by the Jefferson Smurfit Group.
The Semperit plant, which was a leading manufacturer of tyres, closed two years ago with the loss of 650 jobs. Efforts by IDA Ireland to find a purchaser for the plant failed, although at the time, several tyre companies were said to be interested in taking it over.
Smurfit, which manufactures paper and packaging, bought the property earlier this year for a figure believed to be in the region of £7 million. The 551,000 sq ft building stands on a site of 43 acres. About 11 acres of this land can be developed. The main factory was built 30 years ago, but some of it was completed later, according to Padraig Hassett of Hassett & Co, the agents handling the sale.
He describes it as a modern steel-framed building, with good eaves height and extensive carparking. Much of the building is lined with steel tiles.
Mr Hassett says the property is likely to be of interest to developers or investors. The building includes 40,600 sq ft of offices. He believes the property may be too large for one occupier and is more likely to be bought and subdivided into several units. The 11 acres of land behind Semperit is zoned for industrial and related uses, and Mr Hassett says the property would be ideal as a business park, because it could be so easily sub-divided.
It is located near the interchange of the M50. The Naas Road and the Western Business Park are nearby, along with Cherry Orchard train station.
Semperit was established in Ireland in 1968. Over the years, it got £12 million in grant aid. Restructuring began in 1989 and the plant posted £5 million in profits for 1995. Despite this, it closed, citing competition from cheaper Far East tyre products. It was also hit by a general downturn in car and truck sales in Europe.
Smurfit bought the plant earlier this year because it intended to amalgamate several of its Dublin-based operations on the site, according to a Smurfit spokeswoman. However, subsequent studies carried out by the group showed this not to be feasible, so it has now decided to put it on the market, the spokeswoman said. The company never occupied the site itself, but two tenants are currently on site on short leases, one of which is a Smurfit Ireland subsidiary.
Tender documents must be submitted to Hassett & Co not later than noon on December 18th.
The sale will be watched with interest by developers and property experts. They say there is a serious shortage of industrial development land for sale. Mr Sean O'Neill of Lambert Hampton Smith says this is because large developers want to build on the land and sell it as a complete package to the occupier. "Very few developers will sell just the land on its own - they want to make a profit from the building as well."
Mr O'Neill says where land does become available, it is fetching very big money. Depending on location, it can make up to £350,000 per acre, he says. "There is a huge demand for sites from owner occupiers and small developers. Demand is coming from distribution companies who want to build their own building, but not to really high specifications, and from some manufacturers."
There is a shortage of serviced land, but no shortage of industrial land available, says James Meagher of DTZ Sherry FitzGerald. He agrees with Mr O'Neill: "Developers want to build the whole package and then sell it to the purchaser."
He says the preference is still to purchase. Figures compiled by his agency show the vacancy ratio (land occupied compared to land vacant) has fallen from 6.9 per cent in March to 5.5 per cent in June.
Mr Meagher says prime industrial serviced land can fetch £300,000 to £500,000 per acre. For rental, the going rate is £5.50 to £7.50 per sq ft, depending on location and the amount of office space with it.
