26th September (Issue 115)

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.

RETAIL

Mace Expansion: The retailer Mace is planning to add 50 new stores to its nationwide network by 2020, with new stores in both urban and rural areas being targeted. Owner BWG foods will invest over €19m to part-fund the roll-out of new stores, and to provide existing stores with high-spec refurbishments. Mace recently launched a new three-year strategy as well as a new store design as it looks to target growth on the main streets, in neighbourhoods and in forecourts. The Irish Independent, 24^th September

St Andrew’s House: Irish property fund BCP Asset Management, acting on behalf of its international fund Meyer Bergman, has paid c. €11.33m for St Andrew’s House, a four-storey over-basement block which fronts onto Exchequer Street and South William Street in Dublin city centre. The block contains five shops which front onto Exchequer Street and two more on South William Street, and includes units owned by Graham Shoes, Patagonia and Skinfull Affairs. In total the 15,566 sq. ft. block has 5,602 sq. ft. of retail space, 6,941 sq. ft. of office space and three apartments. The block is 80% occupied and currently generating rental income of €532k p.a., with Grahams Shoes paying the highest rent at €146k p.a. The projected income upon 100% occupancy is €680k p.a. The Irish Times, 20^th September

OFFICE

Ballincollig Office Campus: Cushman & Wakefield has been retained by Blackstone to market the sale of an office portfolio at the Ballincollig Office Campus in Co. Cork, which has a guide price of €24m. The portfolio includes six office blocks – Kavanagh House, Pearse House, Yeats House, Behan House, Parnell House and Unit 3 at Emmet House, as well as the adjoining Sliced pod / kiosk restaurant and 380 spaces in a nearby four-storey car park. The current rental income is c. €2.1m p.a., with VM Ware paying nearly €2m of this as they occupy nearly 90% of the space. The total office space in the portfolio exceeds 108,000 sq. ft. The Irish Examiner, 21^st September

South County Business Park: Savills are guiding €20m for two fully let office blocks at South County Business Park in Leopardstown in Dublin 18, which offer a net initial yield of 6.5%. Accenture House is a three-storey office block which extends to 24,300 sq. ft., with 89 car-parking spaces. The building is fully let to Accenture at €460k p.a. with a break option in c. 4.4 years, with c. 9.4 years until lease expiry. Whelan House is also a modern three-storey block, which extends to 51,150 sq. ft. and comes with 132 car-parking spaces. The building is let to six tenants with a weighted average unexpired lease term of c. 3.25 years and rent of €900k p.a. The tenants include Keywords International and Silicon & Software Systems. The Irish Times, 21^st September

Dundrum Business Park: Knight Frank are guiding €8.75m for an office investment in Dundrum Business Park, Dublin 14. The modern three-storey block extends to 24,111 sq. ft. and is configured in a way which allows for future subdivision into two self-contained offices. There are also 49 car-parking spaces included in the sale. The majority of the block is let to BT, who pay a rent of €650k p.a., with the rent due to increase to €700k p.a. in 2021 until the lease expiry in 2026. There is additional rent of €27k p.a. generated from two telecommunication masts which are let to Three Ireland and Three Ireland Services. The current net initial yield of 7.3% will increase to 7.66% when BT’s rent increases. The Irish Times, 20^th September

St John’s Court Office Park: Agents Bannon are guiding €5.5m for a 1980s partially let office park at Swords Road in Santry, Dublin 9. St John’s Court Office Park consists of 10 individual two-storey buildings, extending to 54,872 sq. ft., and 183 surface car-parking spaces. The offices are 45% let in seven occupied buildings to tenants including Irish Life, New Ireland Assurance and 3D Personnel. The current rent roll is €313k p.a., however Bannon estimate that this could be increased to €960k p.a. if the vacant offices were let at €15 psf and a €750 parking charge was introduced. The Irish Times, 19^th September

Dublin Office Space: The amount of available office space in Dublin fell in Q2 2017, according to research published by Savills Ireland. The research shows that the large-scale demolition of older buildings outstripped the delivery of new office stock by c. 86k sq. ft. over the three-month period. In total, c. 431k sq. ft. of office space was decommissioned, while c. 345k of new space was delivered, primarily in Dublin 2 and Dublin 4. The report noted that whilst plans are underway to redevelop most of the decommissioned buildings, one property – Pinebrook House on Harcourt Street – is being converted into a hotel. Overall, the amount of vacant space fell by c. 100,000 sq. ft. to give an overall vacancy rate of 9.2% in Dublin. The vacancy rate for Grade A buildings in the best business locations remains at less than 1%. The Irish Independent, 22^nd September

HOTEL

Goldman Sachs Tifco: The Sunday Business Post reports that Goldman Sachs is considering the disposal of its interest in the Tifco hotel group, and that it has asked sales agents to propose strategies which would allow it to do so. Goldman initially acquired an equity stake in Tifco in 2014 after it purchased the company’s loans. Through its interest in Tifco, Goldman now owns three Crowne Plaza outlets in Blanchardstown, Dundalk and Dublin Airport, in addition to the Hilton in Kilmainham and the Parliament Hotel in Temple Bar. The Sunday Business Post, 25^th September

RESIDENTIAL LAND

Ceannt Quarter: CIÉ is seeking a development partner to undertake a substantial development project on an 8.2-acre site adjacent to Ceannt railway station in Galway city centre. The project, known as Ceannt Quarter, is capable of providing 495,134 sq. ft. of retail space, 247,567 sq. ft. of offices, 176 residential units, a 200-bedroom hotel and a transportation interchange. Rather than sell the site, CIÉ is seeking to enter a development agreement whereby it would receive an annual minimum licence fee of €500k followed by the higher of a premium rent or an income sharing arrangement. The Irish Times, 20^th September

St James’s Gate Development: The Irish Independent reports that Diageo is ready to trigger the development of a large block of land at its St James’s Gate site in Dublin. The project would be one of the largest developments in the city centre in recent times and would lead to the creation of a new quarter in the city. Sources have reported that more than 10 acres of land have been earmarked for development, with potential for hundreds of homes. It is expected that any proposal for the site will contain residential, commercial and leisure elements. The Irish Independent, 24^th September

Cork Development Site: Joint agents Lisney and McCarthy & McGrath are guiding €4m for a ready-to-go 7.1-acre site adjacent to Killumney Village in Co. Cork. The site comes with planning permission for 70 residential units (52 semi-detached units, 12 detached units and 6 townhouses), with the planning permission having been obtained in June 2017. The Irish Examiner, 21^st September

Marlet Dundrum Sites: There are updates on two Marlet-owned sites in Dundrum, south Dublin. Firstly the company received planning permission from An Bord Pleanála for a 120-apartment development on its Green Acres site, while the company has also sold the nearby 1.8-acre Annefield House site for €4m above the guide price. The Green Acres site development will be up to five storeys tall and will consist of 23 one-beds, 65 two-beds and 32 three-beds. The total sales proceeds from the apartments, which the company will reportedly sell individually, could be up to €60m. The Sunday Business Post, 24^th September

Cork Harbour Mixed-Use Sites: The Doyle Shipping Group has retained Cushman & Wakefield to dispose of two mixed-use development sites with waterfrontage in Co. Cork, which have a combined value of over €8m. The first site extends to nine acres at Crosshaven Boatyard and is guiding €4.5m / €5m. This site could reportedly facilitate a mixed-use development which could include over 120 houses. The second site, which is guiding €3.5m, is located at the Victoria Dockyard in Passage West, and is zoned for mixed use / town centre expansion, thereby allowing for a range of uses such as residential, retail / supermarket and amenity leisure. The Irish Examiner, 21^st September

KBC Mortgages: KBC have introduced a new low-cost fixed rate mortgage product for both new and existing customers, days after AIB introduced a range of rate cuts. The new product is a 10-year fixed-rate mortgage with an interest rate of 2.95% for borrowers with an LTV of 60% or less and 2.99% for those with an LTV of 80% or less. The rate includes a mortgage discount of 0.20% for customers who have a current account with KBC. The Irish Independent, 20^th September

Rent Pressure Zones: Drogheda in Co. Louth and Greystones in Co. Wicklow have both been designated as rent pressure zones (RPZs), which means that landlords in these areas cannot raise rents by more than more than 4% a year. This brings the number of RPZs in the State to 21. The move comes as the Residential Tenancies Board announced that average rental costs grew by 6.6% in the year ending June 2017. The average national rent stood at €1,017 p.m., an increase of €63 from the same period last year. In Dublin, rents grew by 3.3% in Q2 2017, and are now 14% higher than at the peak of the housing boom at the end of 2007. The cost of renting in Dublin has increased by nearly €400 over the past four years. The Irish Independent, 20^th September

Scibblestown Apartments Dublin: Dublin City Council is seeking planning permission to develop 70 apartments off Scibblestown Road in Finglas in Dublin, and in order to obtain the necessary planning permission, it has sought planning permission from itself to do so. The application seeks approval to develop 19 one-beds, 40 two-beds, 11 three-beds, as well as 108 car spaces. NAMA Wine Lake, 24^th September

Finglas Apartments Dublin: Percolt Ltd has sought planning permission from Dublin City Council to convert a four storey office building in the Finglas Main Shopping Centre in Dublin into 28 apartments. The application proposes that the building, known as Raven House, will be converted into a residential complex which will accommodate 4 studios, 4 one-beds, 12 two-beds and 8 three-beds. The application also seeks to add a fifth storey to the building, which will contain 1 one-bed, 2 two-beds and 1 three-bed unit. NAMA Wine Lake, 24^th September

Ellis Court Residential Units Dublin: Tuath Housing Association has sought planning permission from Dublin City Council to renovate the four-storey Ellis Court on Benburb Street in Dublin city centre, and to “deep retrofit” 22 new residential units. The units will consist of 6 one-bed apartments, 13 two-bed apartments, 2 two-bed houses and 1 three-bed house. NAMA Wine Lake, 24^th September

Shared Ownership Scheme Arrears: New figures by 15 local authorities on the Shared Ownership Scheme (SOS), a sub-prime government mortgage initiative introduced during the Celtic Tiger, show that the average rate of distressed loans issued by the local authorities is 44%. The figure is well above the level of mortgage arrears identified by the Central Bank in the Irish market as a whole, of c. 10%. The SOS allowed people to buy a portion of their homes, and increase the percentage they owned in steps until they achieved full ownership. Ownership of the property was shared between the buyer and the relevant local authority, with the buyer making mortgage payments on the part they owned and paying rent to the local authority for the remainder. The Irish Times, 24^th September

Heuston South Quarter Development: The Sunday Times reports that Joe O’Reilly’s Castlethorn Construction will enter into a JV with the American investment fund Marathon Asset Management in order to build a 340-apartment development at Dublin’s Heuston South Quarter. The Sunday Times, 24^th September

Cairn Homes Developments: The Sunday Times reports that Cairn Homes has lodged two planning applications for large-scale developments in south Dublin and Maynooth, Co. Kildare. In south Dublin, Cairn is seeking permission to develop 598 student bed spaces, 103 residential units, retail space and a sports hall on the site of the former Blake’s nightclub and Esmonde Motors in Stillorgan, near UCD. While in Maynooth, Cairn is planning to build 476 student bed spaces, 332 houses, 71 apartments, retail units and a gym on the Maria Villa site. The Sunday Times, 24^th September

Clancy Quay: Kennedy Wilson has launched a second phase of 163 apartments and houses at the Clancy Quay development in Dublin 8. The company acquired the complex in 2013 for c. €82m, and has since completed, refurbished and built new units in the development. The second phase brings the total number of existing units to 423, and the company has submitted a planning application to add a further 259 units to the remaining 2.8-acre Phase III site. The units in Phase II include one, two and three-bedroom apartments and one, two, three and four-bedroom houses. The average rents start at c. €1,750 p.m. for the one-bedroom apartments, rising to c. €3,000 p.m. for three-bedroom houses. The Sunday Business Post, 24^th September

INDUSTRIAL

Greenogue Business Park: William Harvey & Co. is guiding €2.955m for two sites on the Jordanstown Road in the Greenogue Business Park in southwest Dublin, or €1.8m and €1.755m if purchased individually. Site 601A extends to 2.62 acres, and site 601B extends to 3.94 acres. Both sites are regular in shape and have an entrance off Jordanstown Road, while 601B also has scope for an additional entrance off Jordanstown Avenue. Greenogue Business Park is one of the largest industrial and warehousing developments in southwest Dublin and is located 1.1km from the Rathcoole Interchange on Naas Road (N7), which is 8.5km from Junction 9 on the M50. The Irish Independent, 21^st September

OTHER

UCC Expansion: The Irish Times reports that UCC is planning a c. €350m investment programme, which will include increasing their college campus space by 20% in the next five years. Included in the investment programme is c. €110m for the Cork university business school, a c. €37m dental school and c. €64m to support student accommodation developments. The college hopes to increase student numbers to c. 23,000 by 2022. The Irish Times, 26^th September

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