The Allsop-Space auction of 84 properties in Dublin’s Shelbourne Hotel today, 15th April, 2011 has now concluded and you can see the results here. The next Allsop-Space auction date has not yet been announced but there are likely to be another six “increasingly large” auctions in the next 18 months. The entry below examines the background to the auction.
This blog has no formal or informal connection with the organisers of the Allsop-Space auction of some 80 properties in the Shelbourne Hotel, Dublinat 12-midday, today Friday 15th April, 2011. However because it is a major property auction and may indicate the present state of the market, it is being watched closely and there will be analysis here later. The auction is being broadcast LIVE and indeed there is presently a LIVE video stream from the auction room – this is the link to the video (click on “Live video” on the right hand side of the screen, it seems there is a 30 second delay with the broadcast and audio will only be fully available from 11.45am). I have had difficulty viewing the video stream using the Mozilla Firefox web-browser but it seems to work fine with the Internet Explorer browser. There are live pictures now at 10.45am so if you can’t view it, you might have a problem with your browser or plug-ins. There is also a bidding notepad here which should show the bids live. All in all this looks like a slickly-run auction.
Bastardizing Churchill’s words of gratitude to the RAF for its role in the Battle of Britain seems somehow appropriate to the much-vaunted inaugural Irish auction by British auction powerhouse, Allsop tomorrow at the Shelbourne Hotel in Dublin. It is being jointly organised with Dublin property company, Space. It seems that there will be 80 some properties for sale, mostly at the behest of Bank of Scotland (Ireland). A further six “increasingly large” auctions are expected over the next two years.
I must say that I have been amazed at the interest this auction has generated. But it should be remembered that in an Irish context, the sale of 80 properties is a major event – the sale of just 20 properties in Kilkenny last year was hailed as a “Mega Auction”. Space reports that its online auction catalogue has been accessed 75,000 times by prospective punters all over the globe, though interest has been predictably strongest in Ireland and the UK. I see that Space were charging some €5 for a printed auction catalogue, though you can access it online. All indications are that the Aviva Stadium might have been a more appropriate venue for the auction which kicks off at 12-midday tomorrow. From previous experience of Allsop auctions, I’d guess it will be concluded well before 3pm.
My own feeling is that there are a number of reasons for the elevated interest. There is the size of the auction and the understanding that most, if not all, properties in the auction are being sold at the behest of Bank of Scotland (Ireland) which exited the Irish market last year, leaving its residual loan book in the hands of asset management company, Certus to “run-off”. There is the general notion that Ireland is economically crippled, has a huge oversupply of vacant housing, high emigration and unemployment with our banks and NAMA desperate to offload property at whatever price can be achieved – there is some truth in this. And the feeling is that bargains can be picked up – that remains to be seen. Lastly, I think the auction tomorrow will be studied to see what it tells us about price discovery in the Irish market, a market where there is a dearth of reliable sales price information.
NAMA should take note of the interest generated by this auction and no doubt it will study the results to see if there is evidence of a floor being reached. But NAMA should also consider the value of its brand. The auction tomorrow is being held at the Shelbourne Hotel, the loan for which is understood to be in NAMA. The hotel is owned by a consortium of developers – reportedly Messrs Sweeney, O’Reilly, Courtney, McNamara and others. The Shelbourne is operated by the Marriott group which presumably has a long lease on the property. To the best of my knowledge the Marriott International group is in sound financial health even if the freeholders of several of its buildings now find themselves in NAMA. That said, I wonder if the Shelbourne would increase its bookings if it marketed itself as a NAMA hotel because the perception is that there will be fantastic value to be had at NAMA hotels. NAMA = distressed = great value for money is an equation in many consumers’ eyes and a savvy hotel operator might consider the value of being associated with NAMA.
I expect to have available the settled prices here later tomorrow.
NAMA Wine Lake 
Having looked at the title and contracts on behalf of a client, these bargains may be “dear bought”. So many of the standard sale conditions have been deleted that any lending bank would have to be warned – purchasers who think they can get a loan may find out otherwise. And they must produce all the money within 30 days or lose their deposit (the usual conditions regarding closing dates and deposits are among those deleted).
never have so many dodgy properties on the coombe bypass been on sale at the same time
Do we know how many properties (as opposed to the value) NAMA has on its books. Would be nice to see if 80 properties is 1%, 5% or 10% of the NAMA book.
There is a finite amount of money to chase all these properties, unlike during the boom. If 80 is a small proportion of the total, you could find a floor reached, which is then breached once the easy money has been spent and buyer fatigue sets in.
JC
@Justin, no we don’t have that information. I think I have seen some statistics to suggest NAMA might be managing 20,000 loans. I might be wrong but I don’t think it’s even worth confirming it because a loan might be a field in Athlone, a ghost estate with 50 houses in Leitrim, a group of 5-star London hotels or a helicopter loan associated with a developer. I’m pretty sure that there is no-where in the public domain, and possibly not even in NAMA, a figure which says that NAMA has x residences in Ireland subject to loans under its control.
But I am pretty confident that the 80 properties tomorrow are but a molecule of a drop in the ocean of property potentially available for sale. There are 23-33,000 newly constructed properties on estates, there are reportedly 100,000-plus properties that represent the vacancy overhang, a 5% default rate on mortgages might see 40,000 homes repossessed and sold.
The auction tomorrow will be interesting but remember, to use Allsop’s own words, there should be “increasingly large” auctions over the next two years.
@ Justin- Did NAMA not indicate that they had 6000 completed units within the M50 ring alone, or did I just dream that!
@DG, well remembered. That was the claim by NAMA’s Head of Lending, Graham Emmet at a conference in London last September, 2010. Plus property in the M50 zoned for the development of an additional 10,000 units.
https://namawinelake.wordpress.com/2010/09/24/%E2%80%9Cthere-is-quite-an-interesting-sustainable-one-bed-flat-market-and-we%E2%80%99ve-got-the-majority-of-it%E2%80%9D-nama-signals-a-strategy-of-renting-6000-flats-in-the-dublin-area/
Well, let’s hope that all those unpaid subcontractors don’t storm the building this time around.