20th June (Issue 101)
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
NAMA Transactions: NAMA will proceed with high-profile assets sales worth more than €300m in the coming weeks as the pace of its asset disposals increases. Included in the planned sales is the Gibson Hotel in Dublin’s Docklands, which sources believe could attract a price tag of c. €80m. The Gibson Hotel is currently being operated by Dalata, and it is speculated that the company will be among those preparing bids when the hotel comes to market. Other assets planned for disposal include NAMA’s interest in The Grange apartment complex in South Dublin, where the 54 apartments and penthouses were developed with the help of funding from NAMA. The Sunday Business Post also reports that NAMA is understood to be closing in on a deal to ‘forward fund’ the construction of the XO building in Dublin’s Docklands. This will involve the purchaser paying an upfront fee for the building, with ownership to transfer on completion. Sources say that these proposed asset sales are part of a broader intensification of NAMA-related activity, which may also see another loan book sale before the end of the year, potentially consisting primarily of residential development land and income-producing assets. The Sunday Business Post, 18th June
RETAIL
Pullamore Business Park: A three property portfolio at Pullamore Business Park in Cavan has been put on the market through joint agents CBRE and Crotty Auctioneers. Two of the properties are investment opportunities, while one comes with vacant possession. The portfolio is available in one or more lots. The first lot is a McDonald’s outlet extending to 2,840 sq. ft., which produces a rent roll of c. €90k p.a. on a 25-year lease running from 2000 with five-yearly upwards-only rent reviews. It is currently let to McDonald’s Restaurants of Ireland and is being marketed with a €1.1m guide price, offering a net initial yield of 7.86%. The second lot is a modern industrial premises extending to 2,707 sq. ft., which is used as an NCT centre and commands a rent of €29k p.a. on a 30-year lease from 2000, with a break option in 2020. It has a guide price of €300k, offering a net initial yield of 9.15%. Finally, Units 20A and 20B comprise two adjoining industrial units extending to 3,626 sq. ft. each, and the agents are guiding €100k for both. The Irish Times, 13th June
Letterkenny Warehouse: Commercial agents Bannon are quoting €3.7m for a retail warehouse investment opportunity in Letterkenny, Co. Donegal. The 30,203 sq. ft. warehouse is occupied by Currys, PC World and Crown Paints, who pay a combined rent of €428k p.a. with a weighted average unexpired lease term of 6.4 years to break. The Currys lease (worth €338k p.a.) has a fixed rental uplift in 2019, which will see the rent increase by 15.9%. The net income yield will be 11% before this rental uplift, rising to 12.6% when the rent from Currys increases in 2019. The Irish Times, 14th June
OFFICE
77 Sir John Rogerson’s Quay: Agents Savills are guiding €28m for 77 Sir John Rogerson’s Quay, a medium sized office block in the south Dublin docklands. Block C, a six-storey building with an over-basement car park extends to 34,413 sq. ft. and has been used as serviced offices by Fitzwilliam Properties since 2006. The block is expected to be of interest to companies already based in the south docks, and others with ambitions to move there, especially given the building’s flexible floor plates and 20 car-parking spaces. The sale comes at a time when the vacancy rate for office accommodation in south docklands is just 1.8% (0.38% for Grade A stock) – an all-time low for the area. The Irish Times, 14th June
Tallaght Office / Warehouse Building: Lisney are inviting offers of €4.8m for a high-income producing office and warehouse building in Tallaght Village in Dublin 24. The building, which extends to 27,506 sq. ft., is divided into three separate buildings, each with direct access, and includes a car park with 69 spaces. The development produces rental income of €453k p.a., with a weighted average unexpired lease term of more than 8.1 years. The recently refurbished building is fully let to tenants including office supplies group Brian S Ryan (€273k p.a.), the HSE (€84k p.a.) and Dún Laoghaire Education and Training Board (€97k p.a.). The Irish Times, 14th June
AIB Bankcentre Move: The Sunday Times reports that AIB is planning to move its head office operations from Bankcentre in Ballsbridge to a newly developed office block on 10 Molesworth Street. The bank is expected to pay about €60 psf to rent the c. 115,000 sq. ft. building, equating to a rent bill of c. €6.9m p.a. The new office block will have room for around 1,000 staff, and is owned by the Irish property investment group IPUT. AIB also recently agreed a deal to move 500 support staff to Central Park in Leopardstown, south Dublin. The Sunday Times, 18th June
IDA Headquarters: The Sunday Business Post reports that the IDA is looking for a new HQ in Dublin city centre as the lease on its existing shared office ends in 2019. IDA Ireland shares its current office in Wilton Terrace with a number of government bodies, who will also seek to relocate with the IDA. Agents GVA Donal O Buachalla have been hired to source a building of up to 120,000 sq. ft., capable of accommodating roughly 500 people. The new premises must be ready by September 2019, and it is expected the IDA will remain in Dublin’s central business district given the nature of its work. The Sunday Business Post, 18th June
HOTEL
Central Hotel: Emco Hotels Ltd has applied to Dublin City Council to renovate the three-star Central Hotel in Dublin city centre. Under the plans, a significant part of the existing building, located on Exchequer Street, would be demolished to make way for a newly constructed five-storey over basement hotel extending to c. 70,000 sq. ft.. The new building would contain 116 hotel bedrooms, adding an additional 46 bedrooms to the hotel. NAMA Wine Lake, 18th June
Marker Hotel Extension: GCS Hotel Property Ltd has applied to Dublin City Council to extend the Marker Hotel in Dublin’s south docklands by adding a 7th storey to the premises. The 30,000 sq. ft. extension will in part involve adding an unspecified additional number of bedrooms to the hotel. NAMA Wine Lake, 19th June
RESIDENTIAL / LAND
RTE Montrose Site: RTE has accepted a bid of c. €107.5m from Irish listed property group Cairn Homes for 8.64 acres of land (c. €12.4m per acre) at its Montrose complex in Donnybrook, in a deal which is expected to close next month. Cairn Homes plans to seek permission to build 500 apartments and nine houses on the site, which is in a prime location. The purchase price is significantly in excess of the €75m guide price provided by Savills, and it is understood that Cairn Homes substantially outbid other interested parties including Chartered Land and Bartra Capital. The company is currently one of the most active housebuilders in Ireland, and has a land bank consisting of over 12,000 sites. The Irish Times, 13th June
Blackrock Land Bank: WK Nowlan Real Estate Advisers are guiding offers in excess of €25m for a 9.7-acre land bank (c. €2.6m per acre) in the south Dublin suburb of Blackrock which is suitable for a large-scale residential development. The site includes a large period house and disused school buildings owned by the Daughters of Charity of St Vincent de Paul religious order, and is one of the last major undeveloped sites located in close proximity to Blackrock Village. The centrepiece of the complex is the listed St Teresa’s House, a Victorian mansion which is likely to be converted into a number of distinctive apartments. In addition, it is expected that the new owner will demolish a range of vacant school buildings on the site. A feasibility study by O’Mahony Pike Architects suggests potential for an overall development of almost 2.5m sq. ft., including 252 apartments and houses and the conversion of St Theresa’s House. The Irish Times, 14th June
Tallaght Development Site: Marlet Property Group has acquired a major 16-acre site in Tallaght which has potential for large-scale residential development. The transaction sees the merging of three separate sites into one, located near the centre of Tallaght and the Luas line. It is believed Marlet Property Group paid c. €16m to acquire the site (c. €1m per acre), which market sources believe could accommodate as many as 1,500 apartments. The site, which contains a number of vacant industrial buildings, is zoned for regeneration by South Dublin County Council, meaning the council would need to approve any plans to make the site entirely residential. The Irish Independent, 18th June
Foxrock Residential Site: A 1.65-acre site with planning permission for a residential development in Foxrock, Dublin 18, has gone on the market through agents CBRE with a guide price in excess of €5m (over €3m per acre). CBRE are to set up a tender arrangement for the site, located on the Stillorgan Road, which has permission for 16 one-, two- and three-bedroom apartments (ranging in size from 785 sq. ft. to 1,453 sq. ft.) and seven four-bedroom houses (ranging in size from 1,980 to 2,098 sq. ft.). The Irish Times, 14th June
Earls Court Apartments: Seventeen apartments in the Earls Court development in Cork Street in Dublin 8 are being offered for sale through agents Hooke & McDonald, with a guide price of €3m. This equates to a price of c. €176k per unit, and the return on the purchase will be c. 7.1%. The 12-storey over-basement development contains 70 apartments in total and fronts onto both Reuben Street and Cork Street, just off the South Circular Road. Twelve of the apartments are two-bedroom units, while the remaining five are one-bedroom units. Hooke and McDonald advise that the portfolio has a current rent roll of c. €305k p.a., with rents in the area averaging €1,600 p.m. for a two-bedroom apartment and €1,250 p.m. for a one-bedroom apartment unit. The Irish Times, 13th June
Killester Redevelopment Opportunity: WK Nowlan Real Estate Advisers are inviting offers of more than €3m for a Dublin convent on a 2.2-acre site which could accommodate a residential development. St Mary’s Convent and grounds in Killester, Dublin 5 is being sold by private treaty on behalf of the Holy Faith Order. A feasibility study by DMOD Architects found that the 2.2-acre site on St Brigid’s Road could accommodate up to 70 apartments, not including the potential to convert the convent into further residential units. The Irish Times, 14th June
Help-to-Buy (HTB) Grant: The Sunday Business Post reports that the Government is considering the closure of the HTB grant this year, as the number of applicants for the grant continues to rise. Figures cited in the paper show that the number of applicants for the grant has risen from 4,400 in March 2017 to 7,275 now. Of these applicants, c. 2,500 have submitted the full documentation to get the grant, with 1,679 applicants receiving the payment, giving an approval rate of c. 75%. Based on the current rate of approvals, the cost of the scheme could be c. €80m this year, well above the c. €50m budgeted for it. The average grant to date is c. €14.5k, and the cost of the scheme so far is c. €24.5m. The Sunday Business Post, 18th June
Avestus Capital Partners: Avestus Capital Partners is set to supply the greater Dublin area residential market with multiple developments after acquiring a number of well-located sites. The company has joined forces with the US investment manager Magnetar Capital to acquire sites which will then be developed by an in-house team. The first development under the Richmond Homes brand will be Dawson Place, a 25 two- and three-bedroom unit scheme at Arbour Hill in Dublin 7. Other sites acquired by the company include the 1.13-acre former Ashfield College site (with planning permission for 16 family homes), the 1.5-acre Kilmacud House site in Stillorgan (with planning permission for an apartment scheme) and a two-acre infill site on Clontarf’s Dollymount Avenue, where the company has already started the development of 25 large family homes. The Irish Times, 14th June
Gardiner Street Student Accommodation: Carrowmore Property Ltd has applied to Dublin City Council to build an extension to a student accommodation complex currently under construction at the junction of Gardiner Street and Summerhill in Dublin city centre. The proposal will involve the construction of a 45,000 sq. ft., six-to-seven storey extension with 117 bed spaces in 81 units. NAMA Wine Lake, 19th June
INDUSTRIAL
Sligo Biotech Vaccine Facility: CBRE is to launch an international campaign to find a buyer for a world-class biotech vaccine manufacturing complex in Sligo. The facility was operated since 2010 by the Eli Lilly subsidiary Elanco Animal Health, which announced in early 2016 that it was to close the plant. The complex consists of three separate facilities – a 39,407 sq. ft. manufacturing plant which has been carefully decommissioned in a manner that will allow for rapid ramp-up for future operators, a 5,479 sq. ft. quality control building in the nearby Finisklin Business Park and the adjacent Fort Gary-leased facilities which contain a three-storey office block and a packaging area extending to 51,104 sq. ft. A guide price has not been provided by the agents, who have highlighted the limited opportunity to acquire top tier vaccine manufacturing plans of this capability and capacity. The Irish Times, 14th June
Carrigtwohill Manufacturing Facility: A detached manufacturing facility in the Carrigtwohill IDA Business Park in Cork is being offered for sale by agents CBRE with a guide price of €2.6m. The unit, which extends to 54,680 sq. ft., is let to TRS Global Services Ireland Ltd on a 20-year fully repairing and insuring lease from 2007, leaving c. 10 years left on the current lease. Unusually, rent is payable in USD at a rate of $413k p.a., which equates to c. €367k p.a. as of 7th June. The property benefits from five-year upwards-only rent reviews, and the guide price would offer a net initial yield of 13.5%. The Irish Examiner, 15th June
OTHER
SME Property-Related Loans: The Central Bank has advised that property-related loans accounted for c. 30% of new lending to non-financial sector SMEs in 2016. Lending to this cohort jumped by over €1bn (or almost one third) in 2016 when compared to the same period in 2015. According to the Central Bank, the main driver of the increase in new lending has been loans for real estate activities, where lending increased from €650m in 2015 to €1.2bn last year. The Irish Independent, 15th June
Allsop Online Auction: Allsop’s is holding their largest ever online auction on the 5th and 6th of July, where over 270 lots with combined guide prices of over €51m will go on sale. Included in the sale will be the most valuable lot ever offered through its online auctions – a 1.85-acre prime south Dublin development site on Deansgrange Road, which is guiding €4.75m – €5.25m (c. €2.6m – €2.8m per acre). Other lots for sale include a portfolio of 15 apartments on Middle Gardiner Street in Dublin 1, a mixed-use property with development potential in Harold’s Cross in Dublin 6w and a portfolio of 11 apartments in Limerick City. The Irish Independent, 15th June
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