Project Cherry – The Saviour Of The Housing Shortage?

It’s the largest single land sale since the boom. 400 acres in prime South Dublin with planning for up to 3,836 homes and heralded as the saviour of the housing crisis.

The site was put together over many years by Liam Caroll but has been in the hands of the receivers for the last few years. While a significant portion of the value is based on the commercial buildings and tenants of the existing Cherrywood business park, the most exciting part is the vast development land straddling the M50. According to the Project Cherry brochure, this includes:

  • 2,647 to 3,836 Residential Units – And that’s only 50% of the total Special Development Zone around Cherrywood. The site also includes 4 primary schools and 2 secondary schools. Overall the 7,000 to 8,000 units is equivalent to a population of one of Ireland’s top 10 largest towns, a Bray or a Navan;
  • A New Town Centre – A new town centre with up to 40, 900 sq m of retail space, that’s equivalent to 3 times the size of Dundrum Town Centre (also for sale at the moment);
  • Up to 154,000 sq ft of Office Space – That’s 3 times the existing office buildings at Cherrywood;
  • Up to 366,509 sq m of Commercial Space – That’s 7 times the size of the existing commercial buildings already at Cherrywood, although this is mainly warehouse and other retail space lining the M50 corridor, but sufficient to dwarf Carrickmines and rival Sandford industrial estate.

Under the Hammer

The site is for sale for Savills with an asking price of €220 million, which is currently expected to be vastly exceeded. However, despite being the largest single site for new homes in the capital, it’s not the saviour everyone has been looking for…

10 years before a single home will be built.

The Herald is reporting a quote from an insider source saying:

“This is a ten-year project and it’s highly unlikely that you’ll see a single house on the site within those next ten years… There is no hard and fast rule as to how many houses have to be built there…”

The SDZ is vastly complicated and although the buyer of this site will own over 50% of the intended land, there is still a controlling issue here which may delay sale. There has also been vast changes in the market since the SDZ was formed and planning granted. In all likelihood we will see years of delays while the planning and commitments are rehashed into something viable.

sandyford shell

Here are some of the main issues that might arise:

  • The wrong type of residential units – This scheme was devised back in the boom years, where apartments were all the rage. Particularly with the location, close to the M50 and commercial sites, the planned units are predominately apartments. Although the Project Cherry sales document is shy to announce specific numbers (in fact they did not use the word “Apartment” once in the 40 page document!), the densities suggest over half the residential sites are for apartments. That would mean closer to 60-70% of the units were apartments, not houses. This clearly needs to be recalculated as the new approach to future developments will surely be more low density housing estates rather than cheek-by-jowl apartment living.
  • You can’t just build the 3 and 4 bed houses first – Assuming you correct the split of houses and apartments in the planning, the new developer can’t just go in and build a swathe of detached and semi-detached homes despite the desperate demand for these right now. The infrastructure, commercial, retail and amenities will have to be assured to be going in place either first or at the same time. The government and Dun Laoghaire-Rathdown Council will not allow clumps of houses surrounded by a sea of scrubland. And building the roads and infrastructure takes time and money, and more risk to the developer. This is a long term and significant development for the country and it will take time to prepare before putting a spade in the ground.
  • Resistance to change in the SDZ – We’ve already seen one high profile rejection to changing the SDZ plan. IKEA were recently told the plan would not be altered to allow big-box retail warehousing because the retail provision was “intended to be local” and the NRA were concerned over the traffic implications (forgetting that Ireland’s largest motorway is right there!). An IKEA in Cherrywood would have been a tremendous anchor to a scheme like this and it is a bad sign that change will be a challenge for the new owners.
  • Does South Dublin need another town centre? – We have Dundrum, Carrickmines and Sandyford all within a few minutes of each other. Dundrum will always thrive, Carrickmines is only now filling out after years of vacancies and Sandyford can feel a bit of a ghost town and it’s high-end concept furniture stores still have a limited clientele. What retailers are going to sign up and does the new owner really want the risk of large scale retail?

New Homes coming to you in 2025…

So we will see later this month who is the winning bidder for the monstrous site, and who is up for an epic battle on their hands to see Dublin’s most important development site come to fruition.

Even if the new owner of Cherrywood delivers there 3,000 new homes, and the other adjacent landlords, banks and NAMA get their act together to complete their parts of the SDZ, they will only provide 7,000 or 8,000 new homes.  This seems a bare drop in the ocean…

The ESRI last month estimated that Dublin needs 54,000 new homes between now and 2021. Not only will Cherrywood barely get up to speed in that timeframe, there are no other schemes in the wider Dublin area that could deliver several thousand homes. So that’s a lot of small builders taking up the strain with 10-50 unit sites across the city. Looks like house price rises are back and they don’t look like going away any time soon.

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