Around 4,700 residential rental units (Houses & Apartments) are in the pipeline for South Dublin in the Dun Laoghaire Rathdown County Council area. This would mean a 29% increase in rental accommodation units in the area where there are already 16,332 tenancies registered with the Private Residential Tenancies Board (PRTB).
About 1,000 of these new units are earmarked for students and such units are likely to accommodate five or even more adults per unit. This means that 4,700 units could have the capacity to accommodate more than 14,500 people.
With this level of investment and surge in development, it will bring fresh competition to the residential investor market and might even curtail rent increases in an area where two beds are achieving an average of around €1,650 per month. However, there are a number of reasons why it may be somewhat premature to celebrate such an outcome.
Planning Issues
Dun Laoghaire-Rathdown County Council and An Bord Pleanala, are known to be slow to approve some projects even when the developers are availing of so-called fast-track planning processes. The latest example was the authorities’ refusal for Ires Reit’s plans to develop 456 apartments across three 14-storey residential blocks at Rockbrook in the Sandyford Business District.
This refusal followed situations where two of the largest applications for residential developments in the county, which between them would accommodate up to 5,500 people, had to re-submit their proposals more than eight weeks after they first requested to avail of the new fast-track Strategic Housing Development (SHD) planning process.
Both of those projects have signalled that they could take up to 10 years to develop, and that does not include the time it takes to get approval.
One of these is UCD’s SHD request for 512 student accommodation units accommodating 3,006 bed spaces in seven blocks at its Belfield campus, those are to be built within a 10-year time frame.
The second was Michael Cotter’s Viscount Securities’ plans to develop 934 new homes at Clay Farm in Leopardstown, Dublin 18, comprising 363 houses and 571 apartments. Their 10-year time frame suggests that a major portion if not all may be aimed at the sales rather than rental market.
Cairn Homes also plans to develop a mixed-use scheme comprising 598 student bed spaces as well as 103 other residential units, retail space and a community sports hall on the sites of the former Blakes restaurant and Esmonde Motors at Stillorgan Village.
Investment Property
However, unlike the Reits which retain developments for income, Cairn’s business model has been to sell on. But with increasing international investor demand for build to rent opportunities, the 103 Stillorgan units might well be sold to the build to rent market.
Just last month global property investment company Hines submitted a planning application for a new town centre at Cherrywood which will include 1,269 build-to-rent apartments.
Ires Reit already own about 400 apartments in Sandyford after recently completing 68 new apartments at Beacon South Quarter.
US real estate giants Kennedy Wilson are also significant landlords in the county where they built 116 rental apartments at Block K Vantage at Central Park, Dublin 18 last year to add to the 276 units they had previously bought at Vantage.
Nama too has about 200 apartments which are rented out at The Grange in Stillorgan and it is expected to bring these to the market in the near future along with a site with development potential.
Meanwhile, a portfolio of 25 apartments developed by Gerry Gannon’s Gannon Homes at Rockfield and Riversdale near the Balally Luas station in Dundrum are for sale with a €7.7m guide price.
The units include 18 penthouses and seven two-bedroom apartments in a number of blocks.
With three show units vacant, they generate rents of €460,032 per annum, which could increase to about €535,600 when the three show units are re-let.
According to agent Iain Finnegan, the penthouses are currently rented at €1,825 to €2,100 per month, while rents for the two-bed apartments range from €1,050 to €1,500 per month.
Nearby, Hibernia Reit completed 213 units some time ago following its acquisition of Wyckham Point, Dundrum and opted to rent rather than sell them.