Irish Property Dealer Seeks a Firesale of Poor Investments in Bulgaria
Dylan Cullen has lined up Russian money to buy properties on which Irish investors burnt their fingers by the Black Sea
Henry McDonald in Dublin
The Irish property crash was one of the biggest in history and has proved the ruin of many as the country tries to shake off the effects of the collapse and subsequent bank bailout.
But Dylan Cullen, a 35-year-old property entrepreneur, plans to be on the side of the winners by orchestrating the firesale of properties to rich Russian buyers and by enticing Irish buyers back into the rock bottom market at home.
The sales of properties – principally on the Bulgarian Black Sea coast – range from the cheapest at €15,000 (?11,764) to the most expensive at €135,000. So far, Appreciating Assets, his company, has sold 400 Irish- or British-owned properties. Cullen estimates there may be thousands more out there waiting to be sold and he believes his business can help revive the devastated Irish market.
When the Irish economy hit the buffers, he and his partners shifted their focus from obtaining foreign properties for Irish investors to off-loading them to the Russian nouveau riche.
But now the genial and chatty Cullen, son of a leftwing councillor, says his clients are no longer distressed sellers; instead, they are looking to sell abroad to fund new purchases at home.
"We have noted a real sea change in the reasons [for selling] over the last year. A lot of Irish and British people are saying 'I think there is great value in the market at home now. I bought in Bulgaria as an investment because I couldn't enter the property market in Ireland.' For them, €50,000 wasn't even a deposit here in Dublin during the boom whereas, for the same money, they could have bought a two- bedroom apartment on the Black Sea."
"It's time to bring the Irish money home, although I always tell our clients both here and in the UK that they may not get back the same as they paid for their Bulgarian property. The only advantage is that at least they will have spare cash, either to clear those debts on the domestic front or make some seriously sound investments at home."
He cites a client from Bolton who sold his Bulgarian apartment and used the proceeds to buy a property at home. "He can drive to it. He does not depend on management companies to look after tenants, as he had to do on the Black Sea. If someone tells him the washing machine is broken or needs lick of paint, he can jump in his car and get the problem sorted for his tenants. He has bought to rent and can guarantee a better rate of return from his rental. He would be very typical of the new client keen to sell their overseas investment."
Cullen claims that his company will eventually help the property market recovery by bringing back hundreds of millions of euros from the Black Sea and beyond. Later this year, Appreciating Assets intends to entice Russian investors to buy Spanish properties at knock-down prices that the Irish and British are keen to sell.
"I've been saying for a number of years that I think it's time to bring our money home. You've got value in this country right now, and you certainly have in the UK.
In between sips of coffee on an unseasonably sunny Irish summer's day, Cullen concludes by saying something few observers of the Republic's mixed fortunes expected to hear again.
"I love the property business because there are very few assets that you can buy that you can honestly put your hand on your heart and say 'It doesn't matter, it will always be worth something.' Unlike stocks and shares, it will never go to zero."
His upbeat message sounds positively Gramscian and brings to mind the Italian Marxist's most famous quote about the necessity to have "optimism of the will, pessimism of the intellect". Cullen sides with the former and deploys a culinary metaphor to justify his faith in a recovery.
"If you go out and you over-indulge on a particular meal and you feel ill afterwards, it doesn't mean you won't ever eat again; it just means the next time you eat out you are not going to gorge. "
The cost of the Celtic Tiger boom
House prices in Ireland fell by 43 per cent in four years from 2007. In that boom year, up to 90,000 new homes were built compared to 180,000 in the UK — even though Britain's population is 13 times higher than Ireland's. A measure of how the Irish property bubble burst can be seen in terms of the cost to the taxpayer. The International Monetary Fund estimated that in 2011 the budgetary cost of paying for the collapse – in terms of bailing out debt-ridden banks, for instance – amounted to 40 per cent of gross domestic income; by comparison, in the US, the comparable figure was 3%.
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