The Comer Group, the property investment business owned by Galway-born Luke and Brian Comer, has outbid up to a dozen developers to buy a 2.02-acre site in the centre of Ballsbridge, Dublin 4, for about €22.5 million.
The same redevelopment opportunity was sold at the peak of the property bubble to Ray Grehan’s development company for €171.5 million.
John Moran of Jones Lang LaSalle had been quoting a guide price of €15 million for the former UCD Veterinary College site. It was sold on the instructions of Paul McCann and Michael McAteer of Grant Thornton who were appointed receivers by Danske Bank.
The 87 per cent fall in value is easily the largest slippage so far for a site in Dublin city since the property market collapsed. However, the sale attracted a large number of bidders, including some of Dublin’s top office developers, because of the prime location involved and the fact that the land has dual frontage on to Pembroke Road and Shelbourne Road.
The site is seen as the best available for a substantial office development in the central business district where there is an increasing scarcity of new high volume office space.
The site of over two acres has dual zoning for a residential and commercial development at a plot ratio of four to one.
City planners have already granted permission for 15,600sq m (167,917 sq ft) of offices, 2,600sq m (27,986sq ft) of retail and restaurant space, 86 apartments and penthouses and a leisure centre extending to 2,340sq m (25,188sq ft).
The Comer brothers are likely to look for a revised planning permission to enlarge the office content and drastically reduce both the retail element and the number of apartments.
The site is only capable of carrying a small volume of retail space and, with apartment values still on the floor, developers will be reluctant to embark on a large new scheme that would cost considerably more to develop than existing price levels.
One fund manager has suggested that companies looking for new office blocks will have to commit to rents of between €35 and €50 per sq ft (€376 to €538 per sq m) before it makes sense for developers to embark on new developments.
Overseas interest
Ray Grehan's purchase of the Ballsbridge site in November 2005, for the equivalent of €84 million an acre, sparked off overseas interest in Ireland's property bubble and the precarious lending policies of the various banks. The lending continued for another three years before the banks realised they were in a quagmire.
Grehan's daring bidding for the site came after several other developers, including Seán Dunne, Bernard McNamara, Gerry O'Reilly and David Courtney, were in direct competition for stakes in the planned high- rise redevelopment of the centre of Ballsbridge.
City planners were having none of it and, when the penny dropped, the banks and Nama were left to pick up the pieces.
The Comer brothers, who made a fortune in the British and German property markets, have been mopping up a range of distressed Irish properties over the past three years, most of them apartment blocks in secondary locations.
They paid €75 million for the Gemini portfolio which included 640 apartments in Dublin and Cork and the 48-bedroom Glashaus hotel in Tallaght.
They also paid about €8 million for the Palmerstown House estate and golf course with 688 acres on the Dublin- Kildare border.
