3rd October (Issue 116)
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
7 South Anne Street: Cushman & Wakefield are guiding €4.685m for 7 South Anne Street in Dublin city centre, which will offer a net initial yield of 5% once purchaser’s costs are taken into account. The four-storey, over-basement building extends to 4,542 sq. ft. and is let to Eddie Rockets on a 35-year fully repairing and insuring lease from 1988, with c. 5.6 years remaining. The net rent of €244k p.a. is subject to five-yearly upwards only rent reviews, with the next review in June 2018. The Irish Times, 27th September
Lifestyle Nutgrove: Offers in excess of €1.75m are being sought by Quinn Agnew for a 3,304 sq. ft. retail unit occupied by Lifestyle Sports in Nutgrove Shopping Centre in south Dublin. The unit is let to Drevez Nutgrove t/a Lifestyle Sports under a 20-year, two-month lease from September 1999 at a rent of €130k p.a., with the lease guaranteed by Lifestyle Sports (Ireland) Ltd. Quinn Agnew, 26th September
OFFICE
WeWork Expansion: WeWork, a US company that provides office space with flexible leases, is to expand into the Dublin market, after agreeing rental terms on two buildings being upgraded in the city. The company will occupy 50,000 sq. ft. in the renamed 1GQ, the George’s Quay block which was previously Ulster Bank’s Dublin HQ, and 55,000 sq. ft. in Iveagh Court, which was recently occupied by the Central Bank. It is understood that WeWork has agreed rental terms of c. €57 psf for the ground and first floors in 1GQ, and c. €50 psf for the Iveagh Court lease. Both leases are believed to be for 25 years, with break options in year 15. The two new offices should be ready for fit-out in early 2018. The Irish Times, 27th September
The Exchange: Ronan Daly Jermyn (RDJ) has agreed to rent 6,781 sq. ft. of office space in The Exchange, an office block which is nearing completion in Dublin’s IFSC. Under the terms of the lease, RDJ will lease space on the ground floor of the six-storey building, paying a rent of c. €50 psf on a 20-year lease which has a break option in year 10. The law firm will join the Food Safety Authority of Ireland, who agreed a lease for 19,041 sq. ft. on the first floor in June of this year. Upon completion, The Exchange will have 105,000 sq. ft. of grade A office space, two retail units (1,173 sq. ft. and 506 sq. ft.), 37 car spaces and 133 bicycle spaces. Joint agents Savills and JLL are quoting €52.50 for the remaining space in the building. The Irish Times, 27th September
St Fintans Swords: Lambert Smith Hampton is guiding in excess of €2.6m for a mixed-use development containing three retail units and five overhead office suites in Swords, Co. Dublin. The development, which was built in c. 2007 and is located at the junction of North Street and Balheary Road, generates rental income of c. €227k p.a., offering a net initial yield of 8.37%. Two of the three retail units are let to Gourmet Food Market (€8k p.a.) and Paddy Power (€30k p.a.), while the third unit, which has planning permission for a food takeaway outlet, is vacant. Four of the five office units are let to the HSE, Flexsource, Gourmet Food Market and Connect Serviced Offices. The agents advise that rental terms have been agreed on the fifth office suite. The sale also includes 44 car-parking spaces. The Irish Times, 26th September
HOTEL
Tetrarch Capital Accommodation Complex: Tetrarch Capital has been granted planning permission for a new development in Dublin city centre which will include a 393-bedroom hotel, a 202-room aparthotel and 21 apartments. The €80m, eight-storey scheme will be developed on a one-acre site bounded by Townsend Street, Moss Street and Gloucester Street South in Dublin 2, and will involve the demolition of the existing buildings on the site, including council flats on Moss Street and Ned’s pub. Under an agreement with Dublin City Council, the new apartments (14 one-bed and seven two-beds) will be handed over to the council on completion. The Sunday Times, 1st October
RESIDENTIAL LAND
Sandyford Student Accommodation: Prime Living, a Swedish student accommodation provider, has purchased a site at the junction of Blackthorn Road and Carmanhall Road in Sandyford, south Dublin, with a view to developing a c. 700 bed space student accommodation complex on the site. The company estimates that the total cost of the development will be c. €31.5m, which includes the €10.3m site acquisition cost. The site was sold with planning permission for 147 apartments, a crèche, café, gym and 151 car parking spaces. The Irish Times reports that Prime Living’s emergence as the buyer was somewhat of a surprise, given that the existing planning permission is likely to be of little value to the company. The site is located c. 3km from UCD, and a five minute walk from two Luas stops, offering easy access to Trinity College, RCSI and DIT. The project is a JV between Prime Living (70%) and Cara Cove (30%), and the JV intends to also target additional student housing development opportunities in Ireland and the UK. The Irish Times, 27th September
Danes Hollow: Concert promoter Peter Aiken of Aiken Promotions has paid over €8.2m for Danes Hollow, a north Dublin coastal home previously owned by Riverdance creators Moya Doherty and John McColgan. The 9,000 sq. ft. property came on the market in April 2016 with a guide price of €9.5m. The property, which is situated on a 3.35-acre site, is located beside Baily Lighthouse and benefits from sea views across Dublin Bay to Bray Head. The previous owners purchased the property in 1997, when it was a modest bungalow on one acre of land, however they later purchased the adjoining land and constructed the large five-bedroom home and expansive terraced gardens. A small cliff-edge guest cottage on the site with its own access road has been retained by the previous owners. The Irish Times, 28th September
Ballinteskin Stud: Agents REA Coonan have placed a €2.5m minimum price on Ballinteskin Stud, a 120-acre country estate near Enniskerry in Co. Wicklow, which is to be sold by way of auction on October 25th. The estate was previously acquired by John Flynn from the Durkan family in 2006 for c. €7m. After a major refurb, Flynn put it back on the market in 2008 for c. €14m, however it failed to sell. The fully refurbished six-bedroom Georgian house comes with c. 30 stables, indoor and outdoor arenas and a helicopter hanger and landing pad. The Irish Times, 28th September
Lisselan Estate: The Irish Examiner reports that Lisselan Estate, a 10,000 sq. ft. chateau located on a land belt of 315 acres near Clonakilty in Co. Cork, has been sold to an unnamed buyer for c. €3.5m. The estate was previously brought to the market in 2014 with a guide price of €9m, however it now appears to have sold for a fraction of this price. The 315 acres which comprise the estate include 160 acres of agricultural land, a nine-hole golf course extending to 80 acres and 30 acres of extensive gardens which surround the main house. The property was previously owned by the Blackburn family. The Irish Examiner, 28th September
D18 Residential Site: Savills have been retained by Deloitte to market a 3.75-acre site at Aikens Village, in Stepaside, Dublin 18, which is to be sold by way of licence agreement. Deloitte are the receiver over the site, which previously belonged to the Aikens Village Partnership. The planning permission permits the development of 35 houses, 18 apartments and eight duplex units. The site is to be sold by way of licence agreement, with the purchasers likely to pay a deposit of c. €1m and further payments (potentially rising to c. €5m) upon completion and sale of the residential units. The Irish Times, 26th September
Northern Cross: Three development sites at Northern Cross on the Malahide Road in north Dublin have been brought to market through agent JLL. The three sites are available in individual lots, or together with a guide price in excess of €3.4m. The first site extends to one acre, and has a guide price in excess of €250k. The second site extends to 1.4 acres and is expected to sell for over €2.25m, while the third site, which is guiding €850k, extends to 0.5 acres and fronts onto the Malahide Road. All three sites are located within the Northern Cross, which includes 500 apartments, offices, the Hilton Dublin Airport Hotel and a range of retail outlets. The Irish Times, 26th September
IRES Sandyford: IRES REIT’s planning application for c. 450 apartments in Rockbrook in Sandyford, south Dublin, has been declined by An Bord Pleanála (ABP). In making their ruling, ABP determined that the proposed development would be “contrary to the statutory development plan for the area”. Davy Stockbrokers now expect IRES to submit a revised planning application for 350 – 400 apartments. The Irish Times, 3rd October
Mortgage Approval Statistics: The latest figures from the Banking and Payments Federation Ireland (BPFI) show that 3,964 mortgages were approved in August 2017, with c. 51% being for first-time buyers (FTB). The August 2017 approval volume figures represented an increase of 14.7% YoY, but a decline of 0.2% MoM. The total value of mortgages approved in August 2017 was c. €842m, an increase of 24.5% YoY, but a decline of 1.3% when compared to the figures from July 2017. On its own, the FTB sub-sector showed increases of 25.6% YoY on a volume basis and 41.2% YoY on a value basis. BPFI Mortgage Approvals August 2017
Glenveagh Properties IPO: Glenveagh Properties, the new Irish housebuilder backed by Oaktree Capital and the residential developer Bridgedale, has raised its IPO target for the third time, with the target now set at c. €550m. The IPO is expected to take place by the middle of next week. The company plans to build at least 1,000 new homes per year by 2020, and more than 2,000 new homes and apartments per year in the longer term. The Irish Times, 2nd October
Daft.ie House Price Report: The Q3 2017 house price report by Daft.ie shows that the national rate of inflation in asking prices slowed to just 0.3% for the quarter. This rate of inflation is well below the 4.3% quarterly increases witnessed in the first two quarters of 2017. The report also examined the rate of inflation in transaction prices in the 12-month period ending September 2017, with national inflation running at 11.2%, driven largely by inflation in Dublin transaction prices of 15%. According to the report, the projected rate of inflation for the next 12 months is 6.6% nationally and 8.3% in Dublin. The Daft.ie House Price Report Q3 2017
MyHome.ie / Davy Report: The latest house price report from Myhome.ie and Davy has shown that the average cost of a home in Dublin has risen by 11.8% over the last year, equating to a price increase of c. €750 per week. The average mix-adjusted price for newly listed homes in Dublin is now €366k, an increase of €39k on the same period last year. On a national basis, the rate of inflation for the twelve months ending September 2017 was 8.9%, with the average price of a home up €21k to €253k. The double digit price-rises in Dublin are set to continue throughout 2018, according to the report. The author of the report, Conall MacCoille of Davy, stated that the ‘key factor’ driving house prices higher has been the mortgage market, with the average loan drawn down by first time buyers in Q3 2017 rising by 9.4% to €200k, up from €183k in mid-2016. The Irish Times, 1st October
Goodbody Housebuilding Tracker: A new report by Goodbody on housebuilding activity in Ireland suggests that the actual level of housebuilding is substantially below the figures reported in official completions data. The Goodbody BER housebuilding tracker, which is based on building energy ratings, shows that 5,377 houses were completed in 2016, compared with a reported 14,932 completions indicated by official data, which is based on electricity connections. Those opposed to the use of ESB meter connection data for housebuilding figures argue that new meter connections can be also triggered by works to existing homes or previously vacant units, thereby overstating the number of newly built homes. The Goodbody analysis shows that while the number of houses being built is increasing, it is still considerably below the number required to meet current and future demand, which Goodbody estimates to be 35,000 units per annum. Goodbody’s housebuilding tracker does show that in the year to August 2017, 5,393 units were completed, an increase of 77% YoY. Of the new homes completed this year (based on Goodbody figures), 72% were in the Greater Dublin Area of Dublin, Wicklow, Meath and Kildare. Semi-detached homes remain the most popular property type, accounting for 41% of all new builds in 2017. Goodbody, 2nd October
Mortgage-To-Rent Schemes: AIB and Permanent TSB (PTSB) have announced plans of their mortgage-to-rent schemes. AIB have become the first bank to launch the scheme, having reached an agreement with the Irish Mortgage Holders Association and iCare Housing. Per the terms of the scheme, iCare will obtain €100m of funding from AIB, with these funds being used to acquire properties from borrowers who qualify for the scheme. In return for surrendering ownership of their homes, the families (who will need to qualify for social housing) will be able to enter into a long-term lease to stay in their homes. Any residual debt following the sale of their home will be written off under the scheme. PTSB is to launch their own scheme in the coming months, with a “preferred partner”. The bank expects up to 2,000 home loan holders to participate in the scheme. The Irish Times, 28th September
Cherrywood Town Centre: Hines has lodged a planning application to develop a new town centre in Cherrywood in south Dublin. The application seeks approval for the construction of a mixed-use development extending to 2.1m sq. ft. on an elevated site integrating the existing Luas stops at Cherrywood and Bride’s Glen. The proposed development will include 1,269 rental apartments and 585,000 sq. ft. of shops, restaurants, cafés, bars, leisure outlets and a hotel. It will also contain two underground car parks, 2,600 bicycle spaces and over 150 charging points for electric vehicles. Hines estimates that the development of the new town will take approximately three years, with work due to commence in Q2 2018. Hines and other Cherrywood landowners have already commenced the first phase of the development, which involves the development of three new parks and 5.4km of roadways, footpaths, cycle lanes and greenways as well as the planting of c. 3,000 trees. When completed, over 3,200 people are expected to live in the town centre, which will also accommodate 2,300 office workers. The Irish Times, 27th September
If you have an article which you would like to have considered for inclusion in our next weekly report, please contact us at info@origincapital.ie