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Ireland goes under the hammer at bargain basement prices | The Times

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Ireland goes under the hammer at bargain basement prices Deirdre Hipwell Property Correspondent Last updated February 18 2011 9:00PM

The first auction of distressed property in Ireland will offer investors hundreds of millions of pounds’ worth of attractive assets, ranging from country houses to Georgian city centre flats. Those who fancy taking a punt on a recovery in the Irish property market or are keen to snap up a bargain should prepare to head to Dublin’s Shelbourne Hotel. Allsop, Britain’s leading property auction house, is to hold up to four distressed property auctions this year in partnership with an Irish property company. The first will be in April. Between 50 and 80 lots will be on offer. Among them will be properties with distressed loans financed by Bank of Scotland (Ireland), now part of Lloyds Banking Group. The sale will include properties from receivers, other banks and property owners and will comprise tenanted flats in Dublin’s exclusive districts of Ballsbridge and Sandymount as well as country houses outside Dublin. Most of the properties are in the Irish capital are tenanted flats. They include Georgian homes in the Dublin 4 districts of Ballsbridge and Sandymount, where some of the highest prices were achieved at the top of the market. There will also be small commercial buildings, with retail and office tenants, on offer. But the properties that are likely to be the most popular are large family houses located in the midlands, south and southeast of the country. Ireland has suffered one of the worst property crashes since the credit crunch, with house prices plunging by more than 50 per cent in many cases. Lloyds has a €27 billion exposure to the property market in the Republic, which it wants to reduce. Since January its business support team in London has taken control of managing the distressed element of the Irish loan book. Space, the Irish property group that Allsop is working with, said that there was a clear need to offer “crucial benchmarking” as to where Irish property values “really


Ireland goes under the hammer at bargain basement prices | The Times

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are”. Stephen McCarthy, the company’s founder, told The Times: “Many private sellers have been obstinately asking prices that are clearly historic and over optimistic. It’s been very difficult to say what a property is actually worth in Ireland today.” In a departure from the British auction practice of quoting guide price ranges, the Irish sale will publish a maximum reserve price. For example, a modern threebedroom, two-bathroom apartment in a sought-after central Dublin block that will be sold at the auction was formerly on the market for more than €900,000. The maximum disclosed reserve for the property at auction will be €220,000 — a 75 per cent discount. Mr McCarthy said: “You need to have the right prices to get people in the door. This is going to be groundbreaking, whatever the outcome is.” Gary Murphy, an Allsop partner who has been granted an Irish auctioneer licence for the sales, will conduct the first auction. He said that there was a “tremendous business opportunity in Ireland” for Allsops to replicate its UK business, which has sold more than £750 million of British properties. He said: “It will be a new way to buy and sell. We want bidders to appreciate that if they can afford to bid the disclosed maximum, then provided the bidding does not go higher, the hammer will fall and the property will be theirs. It’s that transparent.”

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Lead article in UK Times - Allsop Space Distressed Property Auction in Ireland