A cuckoo fund can make more money renting a property in Dublin than it can in Los Angeles, the Irish Independent reported last week. As per the published article, US property giant Kennedy Wilson aims to more than double the number of apartments it controls in Dublin to 5,000 as a “rental philosophy” evolves in the city.
And the company has revealed the more than 2,000 apartments it currently manages in the capital are generating average monthly rents of $2,294 (€2,049).
This is significantly more than the apartments the group owns in and around the Greater Los Angeles area.
In southern California, where Kennedy Wilson owns almost 3,000 apartments, the average monthly rent for its properties is $1,939 (€1,731).
Kennedy Wilson president Mary Ricks said the apartment rental market in Dublin “continues to perform very strongly, driven by high demand and significant undersupply”.
“Dublin city alone is estimated to require 13,000 units per annum between 2019 and 2022,” she told investors last week.
“As the renting philosophy evolves in Dublin, we continue to see strong demand for our amenities, professionally-managed offering.
“And our goal is to be a leader in delivering much needed new housing in Dublin, and we remain firmly on track to hit our near to the medium-term goal of growing our multifamily portfolio to 5,000 units there,” said Ms. Ricks.
Property firms typically refer to complexes containing a mix of one, two and three-bedroom apartments as multi-family developments.
Ms. Ricks insisted corporate apartment owners – nicknamed cuckoo funds for snapping up entire apartment developments meaning individual buyers can’t buy units – have significant potential to cement their presence in the Dublin market.
“It’s also important to note that there still remains a lack of institutional ownership of apartments in Dublin, with less than 5pc of tenancy controlled by landlords with 100 units or more,” the executive told analysts.
Beverly Hills-headquartered Kennedy Wilson partnered with a unit of insurance group Axa last year to acquire blocks of apartments in Dublin. The venture paid the National Asset Management Agency €161m in October to buy 274 units and a development site at Sandyford in south Dublin.
Potential home buyers are being increasingly squeezed out of the property market in the capital as a shortage of supply pushes up buying prices. Rents have also become unaffordable for many people.
In Dublin, Kennedy Wilson owns the majority of the high-profile Capital Dock scheme, where asking rents are €3,300 a month for a two-bedroom property. It owns the development in conjunction with the National Asset Management Agency (Nama).
Ms. Ricks said there had been “strong demand” for its apartments at Capital Dock, which she said was “one of the best and most unique rental offerings in the market today”.
There are about 200 apartments available to rent at Capital Dock. Kennedy Wilson chairman and chief executive Bill McMorrow said he expected the complex to be fully let by the end of the year.
One of Kennedy Wilson’s other key Dublin projects is at Clancy Quay, where apartments are for rent at between €2,000 and €2,200 a month.
The property group is building more units in the third phase of development.
“We’re on track to deliver 259 phase-three units in the second half of next year, which will bring the total to 845 units once complete, which represents the largest multifamily community in Ireland,” said Ms. Ricks.
Kennedy Wilson will also break ground soon on an office project at Hanover Quay in Dublin. It’s being built in partnership with Nama.