29th November (Issue 74)
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
Sean Mulryan / Ballymore Group: According to NAMA Wine Lake, one of NAMA’s top 10 borrowers Sean Mulryan and his Ballymore Group are expected to imminently refinance performing loans with a par value of c. €2.4bn. Management accounts for NAMA for Q2 2016 showed that the state agency’s remaining par value loans of c. €35.9bn were valued at c. €5.1bn (c. 14c in the Euro). If the loans in the Mulryan and Ballymore connection about to be refinanced were valued at par, NAMA’s remaining par value loans of c. €33.5bn would be valued at c. €2.7bn (c. 8c in the Euro). Nama Wine Lake, 27th November
RETAIL
Navan Shopping Centre: Davidson Kempner has acquired a majority stake in Navan Town Centre for c. €62m. According to the joint selling agents Cushman & Wakefield and Savills, the shopping centre should generate a net yield of c. 7.31%. They have purchased a 66% interest in the centre from property developers Duignan & McCarthy (who have managed the operation of the centre for the past number of years), with the balance of shares continuing to be held by Irish Life. The centre was built in 1980, and following a number of extensions, currently has a combined retail area of 250,000 sq. ft. The purchased shareholding generates an operating income of c. €4.7m p.a., including c. €1.2m from two multi-storey carparks and c. €478k from a fully owned unit occupied by Marks and Spencer. Major tenants of other units owned jointly with Irish Life include New Look, Heatons and Boots. The Irish Times, 23rd November
Fairgreen Shopping Centre: Oaktree has purchased Fairgreen Shopping Centre in Mullingar, Co. Westmeath for in excess of €12m. Joint agents Cushman & Wakefield and Savills expect the shopping centre to produce a return of c. 8.13% based on net operating income. The centre was built in 2005, has a floor area of 105,000 sq. ft. and includes eight large retail units. The net rent from the shopping centre is c. €920k p.a. and the tenants include New Look (paying a rent of €230k), TK Maxx (which pays a revenue-based rent) and Dorothy Perkins (paying €180k). The Irish Times, 23rd November
Eden Restaurant: Eden restaurant on 7 South William Street in Dublin city centre has been sold by CBRE to a private investor for c. €2m. The two story, 100-seat restaurant extends to 2,982 sq. ft. and is rented by Jay Bourke on a 20 year lease (running from 2012) at a rent of c. €120k p.a. The Irish Times, 23rd November
OFFICE
One George’s Dock: Swedish property adviser Catella has paid over €40m to acquire the JP Morgan HQ in Dublin’s IFSC. JLL originally quoted €36.5m for One George’s Dock, which also attracted interest from several big names including State Street and Hibernia REIT. The five-storey over-basement office block extends to 44,476 sq. ft. and includes 46 basement car parking spaces. It is let to JP Morgan under a 25-year FRI lease from December 1996, with just over five years remaining and upwards only rent reviews. The current rental income is c. €1.8m p.a., which represents 80.44% of the full rental value. This figure will revert to 100% rental value upon expiry of the current lease in 2021. The Irish Times, 23rd November
Molesworth Street Offices: Savills is quoting rents of €60 – €65 psf for high-spec office space at 40 Molesworth Street in Dublin 2. The building, which previously contained offices of the European Union, was purchased by IPUT in 2013, and the company is spending c. €9m to refurbish the property. The redeveloped offices should be ready for occupation by June 2017, and are being offered either as a single let or on a floor by floor basis, with sizes ranging from 3,000 sq. ft. to 30,000 sq. ft. The redeveloped building will include 17 car spaces and an area for bicycle storage. The Irish Times, 23rd November
Microsoft Offices: Riverdeep founder Barry O’Callaghan is paying in excess of €20m for a c. 87,000 sq. ft. office block in Leopardstown, south Dublin, which he intends to redevelop into the first international school in Ireland. The building is currently occupied by Microsoft, and Mr O’Callaghan is applying for permission to convert the offices to educational use when Microsoft vacate the property next year. The new school will teach the widely recognised International Baccalaureate as an alternative to the Leaving Certificate. Mr O’Callaghan is currently in talks with an academic partner in relation to the project, which has gained added impetus following the result of the Brexit referendum. The Sunday Times, 27th November
Sandwith Street Upper: Rails Investment Limited has applied to Dublin City Council for permission to demolish a former post office on Sandwith Street Upper in Dublin city centre and replace it with a new 115,000 sq. ft., four to seven-storey over-basement office building. Nama Wine Lake, 27th November
Enterprise House, Blackrock: Friends First has received planning permission from Dún Laoghaire-Rathdown Council for the c. €11.5m redevelopment of Enterprise House in Blackrock, south Dublin. The project will involve the construction of over 86,000 sq. ft. of office space in a new five-storey building. Sunday Business Post, 27th November
HOTEL
2016 Transaction Activity: A new report by Cushman & Wakefield estimates that c. €143m worth of hotels were sold in Q3 2016, bringing the YTD sales proceeds to c. €283m, spread across 36 transactions. The most substantial deal in Q3 2016 (and 2016 YTD) was the sale of the Gresham to Riu Hotels for c. €92m, which was the biggest hotel deal since the sale of the Shelbourne in 2014. The Irish Times, 28th November
LeBruin acted as an advisor to Precinct Investments on the sale of the Gresham Hotel
Enniskerry Hotel: Johnny Ronan has applied to Wicklow County Council for permission to build a 141-bedroom hotel in Enniskerry, Co. Wicklow on the grounds of St Valery’s house, a protected building which dates to about 1810. The new four-storey over-basement hotel will extend to 161,458 sq. ft. and will contain a restaurant, bar and meeting rooms along with 160 car parking spaces. The Sunday Times, 27th November
Dublin Room Rates: The chief executive of Dalata, Pat McCann has stated that he believes Dublin hotel room rates are too low when compared internationally. In comparison with c. 20 European cities, Mr McCann notes that Dublin is 11th in room rates but 1st for occupancy. Mr McCann believes that low room rates are having a detrimental effect on the supply of new hotel rooms in Dublin. The Irish Independent, 27th November
RESIDENTIAL / LAND
Centerbridge Partners: Centerbridge Partners, a New York private equity firm, has appointed Eastdil Secured to manage the sale of its interests in new housing developments in Hollywoodrath in Hollystown, Scholarstown Wood in Rathfarnham and an undeveloped site in Station Manor in Portmarnock. Centerbridge set up a JV in 2013 with Dublin-based Avestus Capital and property developers Regency to manage the development of the three sites. The first two phases of Hollywoodrath, launched earlier this year, have sold out (with prices from €300k – €360k for three and four bedroom homes) and the €14m site has planning permission for 450 homes. The Scholarstown site, which was acquired for c. €37m, has planning permission for 314 high end homes. The Irish Times, 23rd November
Central Bank Mortgage Rules: The Central Bank has eased the mortgage rules which apply to first time buyers, meaning that they will only require a 10% deposit regardless of the value of the property they are purchasing. This compares with the current rules, whereby a deposit of 10% is required for loans up to €220k, but 20% is required for the balance of any loans above this amount. The rules for non-first time buyers remain unchanged, therefore the maximum allowable loan-to-value for these borrowers remains at 80%. There have been no changes to other elements of the rules, such as the current 3.5 times ceiling on the loan-to-income ratio, requirements for buy-to-let borrowers, and the exemptions for negative equity borrowers. As part of the revised rules, 5% of the value of new mortgages to first time buyers will be allowed above the 90% LTV limit, while 20% of the value of new mortgages to second and subsequent buyers for primary residences will be permitted above the 80% LTV limit. The Central Bank had previously allowed for a flat exception rate of 15% across all categories. The Irish Times, 23rd November
Glasnevin site: Lisney is guiding over €15m for a five-acre site on Botanic Road in Glasnevin, Dublin 9 which contains planning permission for 119 homes. An Bord Pleanála has granted planning permission for 43 houses (mix of three-, four- and five-beds), 76 apartments (17 one-beds, 42 two-beds and 17 three-beds) a semi-basement carpark, surface parking, a café and a childcare facility. According to Lisney, new planning regulations at Dublin City Council mean the site has potential to include a further 19 homes. The Irish Times, 23rd November
Clontarf Site: CBRE is quoting a guide price of €3.8m for a residential development site in Clontarf in Dublin. Based on two feasibility studies by Ryan & Lamb Architects, the 1.4 acre site has potential to accommodate either a low-density scheme containing 16 townhouses, or a higher density scheme of 62 apartments. The site has 60 metres of frontage onto Mount Prospect Avenue. The Irish Times, 23rd November
Galway Site: Cushman & Wakefield has called for final bids by December 14th for the Galway Irish Crystal redevelopment site (and existing buildings) located on the Old Dublin Road in Galway, which is guiding €2.25m. The 4.6-acre site is zoned for residential use and previously had planning for 178 apartments before the economic downturn. Although this zoning is in place, it is believed the new owners may decide to retain or enlarge the existing commercial buildings on the site, which are rented by Galway Irish Crystal for c. €200k p.a. An additional €10.5k of rent p.a. is generated by a telecommunications mast. The Irish Times, 23rd November
Carrigaline Development: Astra Construction Services Ltd has received planning permission for a c. €38m housing and commercial development in Carrigaline, Co. Cork. Work on the site, which has permission for 297 units, is due to commence in 2017. Sunday Business Post, 28th November
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