The current nervousness should die away as the steadiness of the economy wins out in people’s property decisions. We therefore see further growth in residential sale prices, albeit at a lesser rate than in previous years, with a figure of around 5% looking the likely outcome. The residential letting market is quite buoyant at present, with quality houses fitted-out to a high standard in short supply.
This has been the case, particularly for larger houses along the coast from Blackrock to Killiney. Bearing in mind the current oversupply in the residential sales market, an increase in the number of available rental properties may arise. Significant lettings in 2006 included a large period house in Dublin 6, which achieved u 8,500 per month and a house in Sandycove which achieved u 12,000 per month.
There was good demand for well-presented family homes with rents ranging from u 4,000 to u 8,000 per month. The planned LUAS extension and the opening of the M50 Motorway to Cherrywood, Tullyvale and Druids Valley, have led to a surge in demand in areas that were previously considered difficult to let.
One bedroom units with parking are achieving over u 1,100. Older apartment developments that have undergone complete refurbishment, such as Salthill in Monkstown and Clearwater Cove in Dun Laoghaire, are attracting higher rents. A typical 2 bedroom unit in Clearwater Cove now achieves u 1,600 per month and a one bedroom, u 1,200. Again, these units are finished to a high standard, well-fitted and tend to be furnished when let. Apartments in Salthill have achieved u 1,600 plus per month for larger two bedroom units enjoying a sea view.
These rents are currently being achieved for apartments in the Pavilion development on Marine Road. the east of Cork city, leased two buildings extending to approximately 5,000 sq m at Eastgate in Little Island. Commercial Real estate Conveyancing is a long process; then again it doesn’t have to be an agonizing one. The US Software Development Company, EMC, has agreed to let a further 5,000 sq m in the Ballincollig town centre development.
Rental levels for all of these transactions were reported to be at the u 185 per sq m per annum level. We have recently launched a newly constructed office building, Cleve Quarter, in Cork Docklands. Bank of Ireland Headquarters at 32 South Mall sold for a reputed yield of 3.25%, proving that the demand for office investments in the traditional business core remains strong.
Eastgate Business Park is now in its final phase and there is strong demand for small units from both owner-occupiers and investors, with sale prices of u 2,690 per sq m being achieved for units of 172 sq m. A number of city based car showrooms will relocate to Eastgate towards the end of 2007 releasing some prime city centre sites for redevelopment.