A portfolio of 25 property investments, mainly in central Dublin and valued at close to €2 billion during the boom, are to be offered for sale on the international market at €140 million.
The buildings are concentrated within Dublin 1 and 7 (accounting for over 82 per cent of the rent) with the remainder in Dublin 2, 4, 8 and 20. The wide range of buildings has an overall floor area of around 50,769sq m (546,500sq ft) and includes 14 offices, 51 retail units and 31 apartments, all of them with the exception of two shops rented on 90 different tenancies. The overall price being quoted equates to a valuation of around €256 per sq ft (€2,755 per sq m).
irishtimes.com/business/sectors/commercial-property/140-million-for-25-city-centre-investments-1.1507179
€140m wouldn’t even pay the 9% stamp duty on a €2bn portfolio.
Will still be interesting to see the prices achieved on this.
If I sell my car, without hurry, on the open market and get 5K, what would my car be valued at?
2billion me arse.
That must be an Anglo valuation, figures pulled from their arse.
dipole
August 28, 2013, 12:46pm
4
and the portfolio is only worth what it is worth because of the rental contracts with Government.
Price of 2bn against rental income of 14m would give 0.7% yield.
Rents haven’t come down much, have they?
I guess bubble valuations are by definition illogical, or it wouldn’t be a bubble.
Christ they have !
Rates on the other hand.
but they can’t change the UORR clauses in leases. Happy days for the landlord, i.e. NAMA.
AKAF
August 28, 2013, 2:24pm
8
Eschatologist:
Price of 2bn against rental income of 14m would give 0.7% yield.
Rents haven’t come down much, have they?
I guess bubble valuations are by definition illogical, or it wouldn’t be a bubble.
Or maybe the journalist got it wrong
Maybe he moved over from the Indo.
€140MM asking price is bullshit, it’ll make a yield of 6%, possibly 5%; so then they can write an article saying huge interest in Irish property, portfolio makes 50% over asking price etc etc
AKAF
August 28, 2013, 7:50pm
10
€140MM asking price is bullshit, it’ll make a yield of 6%, possibly 5%; so then they can write an article saying huge interest in Irish property, portfolio makes 50% over asking price etc etc
Not so sure about that.
Prime investment property has been trading hands at yields of 8% to 10%.
If this sells for 5% odd than that is real yield compression or in other words prices have risen.
I still don’t believe this portfolio was ever valued at €2 billion
grumpy
August 28, 2013, 8:20pm
11
It’s BOSI so nothing to do with NAMA.
Nearly prime is nothing. Maybe it was valued at 2B, like on the 50 stories development potential at 500 euros a metre rental.
Looking at the properties involved, I can’t imagine a huge amount of interest in this even at that yield.
Hmmm, really? Last I heard was prime, D2, good (BBB) tenant, 6.3% gross yield – but it’s not my area of expertise. So interested to hear if I’m wrong?
AKAF:
€140MM asking price is bullshit, it’ll make a yield of 6%, possibly 5%; so then they can write an article saying huge interest in Irish property, portfolio makes 50% over asking price etc etc
Not so sure about that.
Prime investment property has been trading hands at yields of 8% to 10%.
Hmmm, really? Last I heard was prime, D2, good (BBB) tenant, 6.3% gross yield – but it’s not my area of expertise. So interested to hear if I’m wrong?
Aghh it’s all convoluted.
irishtimes.com/business/sectors/commercial-property/grafton-street-phone-store-on-market-for-5-5m-1.1385089
The four-storey-over-basement building is let to Hutchinson 3G Ireland Ltd, trading as 3Mobile, on a 35-year full repairing and insuring lease that commenced on January 1st, 1991, and has another 12.5 years to run. Though the premises is currently over-rented at €445,000, the rent can be reviewed only on an upwards-only basis for the remainder of the lease.
So you’re getting a return of 7.75% for the next 12.5 years, as long as the company doesn’t go bust.
But if that were vacant today, you’d probably get half that.
Even if you get the full rent for the next 12.5 years, what happens after that ?
mr_anderson:
AKAF:
€140MM asking price is bullshit, it’ll make a yield of 6%, possibly 5%; so then they can write an article saying huge interest in Irish property, portfolio makes 50% over asking price etc etc
Not so sure about that.
Prime investment property has been trading hands at yields of 8% to 10%.
Hmmm, really? Last I heard was prime, D2, good (BBB) tenant, 6.3% gross yield – but it’s not my area of expertise. So interested to hear if I’m wrong?
Aghh it’s all convoluted.
irishtimes.com/business/sectors/commercial-property/grafton-street-phone-store-on-market-for-5-5m-1.1385089
The four-storey-over-basement building is let to Hutchinson 3G Ireland Ltd, trading as 3Mobile, on a 35-year full repairing and insuring lease that commenced on January 1st, 1991, and has another 12.5 years to run. Though the premises is currently over-rented at €445,000, the rent can be reviewed only on an upwards-only basis for the remainder of the lease.
So you’re getting a return of 7.75% for the next 12.5 years, as long as the company doesn’t go bust.
But if that were vacant today, you’d probably get half that.
Even if you get the full rent for the next 12.5 years, what happens after that ?
Thanks.
€140MM asking price is bullshit, it’ll make a yield of 6%, possibly 5%; so then they can write an article saying huge interest in Irish property, portfolio makes 50% over asking price etc etc
Without question… any half decent investment on the market in Dub for the last year easily exceeds the “guide” price. You’re a little optimistic on 5/6%, but will make less than 7%… I’ve heard the bubble word used in the Dub investment market on more than 1 occasion, but how can well advised, shrewd national & international investors be wrong?? And by-the-way I need an answer - the entire thing makes no sense to me, but the sales figures don’t lie.
Locutus:
€140MM asking price is bullshit, it’ll make a yield of 6%, possibly 5%; so then they can write an article saying huge interest in Irish property, portfolio makes 50% over asking price etc etc
Without question… any half decent investment on the market in Dub for the last year easily exceeds the “guide” price. You’re a little optimistic on 5/6%, but will make less than 7%… I’ve heard the bubble word used in the Dub investment market on more than 1 occasion, but how can well advised, shrewd national & international investors be wrong?? And by-the-way I need an answer - the entire thing makes no sense to me, but the sales figures don’t lie.
With interest rates at astonishing lows, the big money is more yield hungry than it ever was. Add to this the same fools looking to make up their losses by doubling down…
mr_anderson:
AKAF:
€140MM asking price is bullshit, it’ll make a yield of 6%, possibly 5%; so then they can write an article saying huge interest in Irish property, portfolio makes 50% over asking price etc etc
Not so sure about that.
Prime investment property has been trading hands at yields of 8% to 10%.
Hmmm, really? Last I heard was prime, D2, good (BBB) tenant, 6.3% gross yield – but it’s not my area of expertise. So interested to hear if I’m wrong?
Aghh it’s all convoluted.
irishtimes.com/business/sectors/commercial-property/grafton-street-phone-store-on-market-for-5-5m-1.1385089
The four-storey-over-basement building is let to Hutchinson 3G Ireland Ltd, trading as 3Mobile, on a 35-year full repairing and insuring lease that commenced on January 1st, 1991, and has another 12.5 years to run. Though the premises is currently over-rented at €445,000, the rent can be reviewed only on an upwards-only basis for the remainder of the lease.
So you’re getting a return of 7.75% for the next 12.5 years, as long as the company doesn’t go bust.
But if that were vacant today, you’d probably get half that.
Even if you get the full rent for the next 12.5 years, what happens after that ?
Hutchison 10YR CDS (in USD) is 1.7% — so essentially you can negate the bankruptcy risk by giving up 1.7% in yield per annum.
All depends really on your cost of funding whether it makes sense. I’d probably swerve myself. I mean, you can buy 30Yr Hutchison debt at a yield of about 6.2% and it’s easily leveraged. All your giving up is the potential capital gain of the property and I’m not convinced that train is coming.
Hutchison 10YR CDS (in USD) is 1.7% — so essentially you can negate the bankruptcy risk by giving up 1.7% in yield per annum.
All depends really on your cost of funding whether it makes sense. I’d probably swerve myself. I mean, you can buy 30Yr Hutchison debt at a yield of about 6.2% and it’s easily leveraged. All your giving up is the potential capital gain of the property and I’m not convinced that train is coming.
What about repudiation of a lease in an examinership? Will the CDS “pay out” or whatever the correct term is?
