A site with planning permission for 74 three- and four-bedroom houses in south Dublin is to be offered for sale by way of a licence agreement by Nama-appointed receivers.
The new sales method allows developers to gain possession of housing sites on the payment of an initial fee – in most cases at least €1 million – and then reimbursing the National Asset Management Agency when the houses are sold.
The current site of 3.7 hectares (9.16 acres) at Ballycullen in south Dublin has an open market valuation of between €6.5 and €7 million but with most banks reluctant to provide full funding for its acquisition and subsequent development, Nama is adopting a licence procedure to get more houses under construction.
The expectation is that the successful developer will initially pay a non-refundable fee of about €1 million to gain control of the site and a second payment equating to about 25 per cent of the projected selling prices of about €300,000 to €400,000 as soon as any of the three- and four-bedroom houses are sold.
Selling price
A third condition will oblige the developer to agree at this stage on a percentage of the selling price he will hand over to Nama in the event of the houses selling for more than the projected valuations.
The forthcoming sale by way of a licence will be the third to have been handled by Savills who recently reported strong interest in two similar sites at Maynooth and St Edmunds in Lucan.
The sales method is apparently appealing to an ever-increasing number of housebuilders as a result of the immense shortage of new homes in the greater Dublin area.
The early success of the licensing system as a means of getting more houses under construction seems likely to be adopted by Nama as part of its plan to develop 20,000 new residential units in Ireland by 2020. The new arrangement also includes an agreed timeline for the development of each site.
John Swarbrigg of Savills, who is handling the Ballycullen site, said he was convinced that the development offer would appeal to many builders not only because of the financial arrangements but also because of the convenience of the residential site and the excellent planning permission available.
Ballycullen adjoins several high-quality residential developments and is also close to Rathfarnham, Knocklyon, Firhouse and Tallaght.
The sale of the Ballycullen land is being carried out by Savills on the instructions of joint receivers Michael Coyle and Michael Madden of HWBC Allsops.
