Price rises put sales of derelict Limerick properties in peril

PROSPECTIVE buyers of derelict properties in Limerick are pulling out of sales due to the “extraordinary” rise in material costs, it’s been claimed.

Limerick City and County Council has been using legislation to acquire vacant property and are selling these back to the private market, in many cases, to cash buyers, who make a pledge to bring the units up to standard.

But the sale of some of these buildings are falling through due to the sharp rise in construction expenses, sparking fears of long-term dereliction across the city and county.

Tina Knox, who works in the council’s property department said: “In the last week or so, we’ve been speaking with one or two parties who we have gone sale agreed on derelict properties. However, people have pulled out because of construction costs rising. It’s going to be a factor going forward. Some of the properties which have gone sale agreed will fall through with the rise in construction costs.”

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She made the comments during a debate on the sale of the former garda barracks in Mary Street in the city.

Acquired by the local authority from the Office of Public Works in 2018, it had been proposed to sell the building to the Newenham Street Group Ltd for €100,000.

The company promised “a new signature building in Mary Street”, with “high quality consulting rooms and office space”.

But this week, at the full local authority meeting, councillors took the unusual step of blocking that sale, amid claims the project would not deliver under the Regeneration framework plan for communities in King’s Island.

There was a feeling among members, particularly from City North, that instead of offices and consulting rooms, a community space would be best for the site.

Ms Knox had cautioned against the vetoing of the sale, saying: “There is nobody else out there in the development market. That’s the reality.”

The council ran an expressions of interest process for the Mary Street site, and, she claimed, only two applicants had funding ready to develop the land.

“We could go back to the market, but the reality is, there is nobody, and I can guarantee this, there is nobody with money to spend in excess of €800,000,” she said, referring to the money the developer initially pledged for refurbishment.

“With the way construction costs are going, €800,000 is not going to do it. It’s a protected structure. There is nobody out there in the market who can have funding to do that. I’m not saying we’d give it to anybody. But it was felt they would provide a certain among of employment when it’s up and running, and they would bring people to Nicholas Street,” she added.

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Conor O’Connell, southern director of the Construction Industry Federation said: “We are in extraordinary times in material cost inflation in the construction sector.”