15th August (Issue 109)
Welcome to the Origin Capital Weekly Irish Property Review. This update is designed to provide you with a full recap of the latest property news from the media over the last seven days.
LOAN / PORTFOLIO SALES
Permanent TSB Mortgage Sales: The Irish Times reports that PTSB is progressing with its plan to sell a substantial portion of its worst performing mortgages, and is reportedly seeking advisers on potential loan sales in either 2017 or 2018. The bank, which is 75% owned by the State, is facing mounting pressure from regulators to address the problem, as it currently has the highest ratio of non-performing loans amongst Ireland’s bailed-out banks, at 28% of its portfolio as of June 2017. More than 50% of the loans in the c. €5.78bn non-performing loan portfolio are in some form of long-term restructuring or forbearance agreement, but are making a contribution to the profitability of the bank. It is therefore believed that the focus of the loan sales will be the c. €2.68bn of ‘untreated’ bad loans, deemed to be so either because the bank can’t find a viable solution or the borrowers haven’t engaged with the bank. The Irish Times, 11th August
RETAIL
Former Central Bank HQ: US property giant Hines and its Hong Kong based partner Peterson are set to seek permission from Dublin City Council to embark on a c. €75m redevelopment of the former Central Bank HQ in Dublin city centre. The plans include a 300-seat rooftop restaurant and viewing area, c. 129,000 sq. ft. of office space, and shops in the adjoining retail buildings, which they also own. The plans involve changing the roof of the building by removing the current copper cladding and replacing it with a two-storey glass-roofed structure that will house the new restaurant and a viewing area. The application is part of a master plan known as Central Plaza, which includes the annex and commercial buildings on Dame Street, and 6 – 9 College Green. It is hoped that the redevelopment will be completed by Christmas 2018, with the pedestrianisation of College Green scheduled to be completed around the same time. The Irish Times, 9th August
OFFICE
Cork Office Development: JCD Group has been granted planning permission for a c. €8.7m, c. 75,000 sq. ft. office development in Cork city centre. It is expected that construction will commence in Q4 2017 and will take approximately 12 months to complete. The Sunday Business Post, 13th August
RESIDENTIAL / LAND
Vacant Site Levy: The Irish Times reports on Dublin City Council’s registrar of vacant sites, which contains 70 sites with a combined value in excess of €220m. The owners of the sites include international funds, as well as the OPW and Dublin City Council themselves. The council owns seven sites on the registrar, which have a combined value of more than €27m. There are plans to introduce a levy on vacant sites from 2019, with the levy set at 3% of the value of the site, payable annually. The criteria for the sites to be levied include (i) the site being greater than 0.12 of an acre, excluding gardens (ii) the majority of the site has been vacant or idle for at least 12 months (iii) the site must be in an area zoned for residential or regeneration purposes and (iv) the site must be in an area which is in need of housing. The Irish Times, 15th August
College House / Screen Cinema Site: Marlet Property Group has applied for planning permission to redevelop the former Screen Cinema and the adjacent nine-storey College House building on Townsend Street in Dublin city centre. The group want to demolish the existing properties and replace them with a c. 269,000 sq. ft. office block, with the estimated cost of the development at c. €70m. The block will also contain a 500-seat entertainment venue in the basement, and a bar and restaurant on the ground floor. The site is beside Hawkins House and Apollo House, both of which are set to be demolished and replaced with new buildings, and the new Luas Cross City line will pass by the site. It is anticipated that the planning process could take until mid-2018, with construction expected to take about 18 months. The Sunday Times, 13th August
Culvert Apartments: Bartra is set to purchase the Culvert Apartments complex on Pim Street in Dublin’s inner city. The complex, located near the Guinness brewery, consists of 23 apartments leased to Dublin City Council on a rental accommodation scheme, and four private duplexes. The block was put on the market in late 2014, guiding c. €3.2m. The Sunday Times, 13th August
Ballyfermot Residential Development: Dublin City Council has published a planning application to build a mix of houses and apartments on the former Cornamona Court site in Ballyfermot, west Dublin. The development will contain 61 units in total, consisting of 16 two-storey, two-bedroom terraced houses, a four-to-five storey apartment block containing 12 three-bed ground floor duplexes, and 33 senior citizen apartments (29 one-beds and four two-beds). NAMA Wine Lake, 13th August
Cherrywood Planning Application: William Neville & Sons have submitted a planning application to Dún Laoghaire-Rathdown County Council to construct 242 apartments and 80 houses in the new town of Cherrywood in south Dublin. The application comes just days after the council changed the planning scheme for the Cherrywood Strategic Development Zone (SDZ) to allow smaller apartments to be built in the town. The application is believed to be the first for the new town, despite the fact that the Cherrywood planning scheme, allowing for the development of c. 8,000 new homes, was approved in 2014. In 2015, the then Minister for the Environment, Alan Kelly, introduced new standards which lowered the minimum size of apartments which could be built, after which the council had to return to An Bord Pleanála to have the new standards incorporated into the scheme. The reduction in apartment sizes means that the number of homes that can now be built in Cherrywood will increase from 8,336 to 8,786. Under the fast-track planning scheme, planning permission for the development could be secured from the council in two months. The Irish Times, 13th August
Mortgage Rates: New figures from the Central Bank show that the average interest rate applied to new variable rate mortgages in Ireland was 3.35% in June, against an equivalent Euro area rate of 1.83%. The Irish Times reports that the banks cite relatively higher funding costs, as well as the Irish market being more risky as factors behind the difference in mortgage rates between Ireland and the rest of the Euro area. The latest Central Bank figures also show that while the share of fixed rate mortgages in Ireland is increasing, variable rate mortgages still account for c. 60% of new agreements, compared with a figure of 15% in the Eurozone area. The Irish Times, 11th August
CSO Property Prices: The latest figures from the CSO show that the growth in property prices continues to accelerate, with prices rising by 11.6% in the year to June 2017. This compares with an increase of 11.1% in the year to May, and an increase of 5.5% in the year ending June 2016. The average price paid for a home in the year ending June 2017 was c. €259k, or c. €402k in Dublin. The most expensive place to buy in Ireland was Dún Laoghaire-Rathdown in Co. Dublin, with an average price of c. €581k, while the cheapest was Co. Longford at c. €94k. House prices nationally are now just 29% lower than the highest level reached in 2007, with Dublin property prices 29.9% below their February 2007 peak, and property prices outside of Dublin 34.6% below the peak reached in May 2007. The Irish Times, 9th August
OTHER
BNP Paribas Real Estate: BNP Paribas Real Estate has announced the acquisition of Strutt & Parker, one of the largest independent property partnerships in the UK. The acquisition is due to be completed in September 2017, and will merge the UK subsidiary of BNP Paribas Real Estate with Strutt & Parker, which has over 60 offices in the UK and covers all real estate asset classes. BNP Paribas Real Estate, 8th August
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