Blog post by Maya Healy and Owen Reilly, March 4th 2016
Dublin City Council’s Strategic Development Zone (SDZ) planning scheme focused on the Grand Canal Dock and North Lotts areas provides for the development of 2,600 additional residential units and it will transform the Docklands. The next wave of development will be required to live up to the council’s design requirements and will undoubtedly incorporate the latest design thinking and building approaches; developers will additionally be focused on fulfilling the needs and wants of an increasingly sophisticated market. The communal and outdoor facilities are elements where significant potential exists for developers to differentiate their schemes, and the opportunity exists in particular to create communal outdoor space at the penthouse level.
The opportunity at prime penthouse level
In the Irish private rental market, real estate investment firm Kennedy Wilson is leading the way in shared tenant amenities with its Clancy Quay development near the Phoenix Park offering a reception, lounge, media room, games room, office cubicles and meeting rooms in the refurbished former 18th-century barracks. Their planned development at Capital Dock in the Docklands also includes unique, shared amenities such as a cinema. Utilising prime penthouse space for shared amenities can prove an extremely attractive alternative for both developers and prospective occupants, most especially in a market where quality shared facilities at any level are in extremely short supply. Apartment complexes built to a high design standard are the expectation of today’s well-informed and well-travelled multi-national market and will undoubtedly achieve a far higher yield and return on investment than existing developments. The apartment model adopted can always be debated but certainly, in a market where penthouse apartments typically underperform in terms of price per square foot, utilising the penthouse level to provide shared amenities can be an attractive alternative.
Dublin penthouses where everyone can be a winner
In my experience Dublin differs from other cities such as London and New York as price per square foot typically declines at penthouse level, where market ceilings are clearly evident. For example at the exclusive boutique development at 77 Mayfair, on London’s South Audley Street, apartments sold for an average of £4,500 per sq ft earlier this year, while the penthouse was snapped up for an astounding £7,000 per sq. ft. Compare this to our recent sales in one particular Docklands developments where we sold a penthouse for €557 per sq. ft and a two-bedroom bed apartment for €581 per sq. ft.
Regulation imposes standards on developers in connection with communal spaces and in connection with outdoor amenity space. Dublin apartment developers have an opportunity to imagine more however and, they have a particular opportunity to turn the design model upside-down, giving prime penthouse space over to shared facilities for all residents to enjoy. In my opinion, by offering expansive open air space and rooftop views to all residents, developers will stand to gain through inflated values across all units.
Maya Healy and Owen Reilly, April 4th 2016