Distressed property auction by Savills...
AROUND 100 distressed investment properties, mainly in the greater Dublin area, are to be auctioned on a single day in September. The move by Savills Ireland to kick-start both the residential and commercial investment markets is expected to generate sales of over €20 million.
Ronan O’Driscoll, of Savills Ireland, said most buyers at the September 29th auction were likely to be cash-rich investors happy to put their money into property now that values had fallen sharply.
In the past, investors banked on capital appreciation but it was now all about rental return and in many cases buyers could expect yields of 9 to 10 per cent compared to 3.5 per cent on bank deposits.
The announcement that Savills will be staging Ireland’s “biggest ever property auction” comes after last month’s successful auction of distressed properties in Dublin by British auctioneer Allsops and its Irish affiliate Space. They sold 80 of the 81 lots in a packed Shelbourne Hotel where turnover hit €15 million. They will hold another auction on July 7th.
Senior executives from Savills are in touch with banks, receivers and others who need to sell properties because of a loan default, over-investment or because of an unmanageable repayment schedule following the ending of interest-only payments.
Early indications are that about 80 per cent of the properties going to auction will be residential, including many city centre apartments; some with tenants. One-beds are expected to sell from €100,000 while two-beds are likely to cost €140,000 upwards. Some are also expected to appeal to first-time buyers who have managed to raise mortgages. There will also be three and four-bedroom semi-Ds that will appeal to investors and families. Investors will also have the option of buying mainly small retail buildings, industrial units and office suites.
O’Driscoll said that after a two-year standoff in auctions there was pent-up demand for well located residential and commercial properties. Ronan O’Hara of Savills, who is to handle some of the auctions with colleague Pat O’Hagan, said: “Once the reserves are were set relatively low these auctions help to set a price floor which will be noted by the market.”
Report by JACK FAGAN - Irish Times