06th December (Issue 75)

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.



Aldi Expansion: Aldi has announced plans to invest c. €100m in Ireland over the next three years in a move which will see it adding around 20 new stores, creating c. 400 new jobs in the process. As part of the expansion plans, the chain is due to open stores in Trim, Co. Meath, Leixlip, Co. Kildare and Ennistymon, Co. Clare. It is also expected to seek planning for outlets in Dunshaughlin, Co. Meath and Graiguenamanagh, Co. Killkenny. Aldi is the fifth-largest supermarket franchise in Ireland, with a c. 11.3% share. The Irish Independent, 4th December 2016

Drumcondra Supermarket: Lidl has lodged a planning application for a 60,000 sq. ft. supermarket led development in Drumcondra, north Dublin. The plans cover the demolition of a 15,000 sq. ft. garage and crèche at 25/27 Drumcondra Road, and the construction of a new 50,000 sq. ft. supermarket and 10,000 sq. ft. of office space. Nama Wine Lake, 4th December



East Point Business Park: Google is currently negotiating the purchase of a 40,000 sq. ft. office block in Dublin’s East Point Business Park. The building in question, Block L, is believed to be valued at c. €10m, and is located close to five other buildings currently rented by Google in the business park, ranging in size from 32,000 sq. ft. to 50,000 sq. ft. Block N, the largest of these buildings was recently leased at a rent of €18.50 psf, with a further €1,250 payable for associated car park spaces. Meanwhile, the first two buildings in the park (constructed in 2001) are sale agreed for c. €20m, according to Weir Conway Chartered Surveyors. The properties, Blocks JK, have an overall floor area of 63,272 sq. ft. and are occupied by Arvato Finance Services under a 15 year FRI lease from April 2016 for a headline rent of c. €1.4m p.a. The rent equates to c. €20 psf for the office space and c. €1,000 per car space. The Irish Times, 30th November

2 Habourmaster Place: German investor Real IS has purchased Number 2 Harbourmaster Place, a 61,000 sq. ft. office building in Dublin’s IFSC, for €53.75m in an off-market deal. The property was purchased two years ago for €37.85m by Ardstone Capital and CBRE Global Investment Partners, who have made a profit of almost €16m on the sale. Despite the significant increase in the purchase price, Real IS can expect a net initial yield of 5.25%. The yield will improve next year as the current annual rent roll of €2.45m is projected to increase to €2.93m when one of the tenants, KPMG, begin a new lease. Other tenants in the building include Wells Fargo, Bank of Montreal and United Health Group. Since purchasing the building in 2014 Ardstone and CBRE Global have carried out a number of internal improvements. The Irish Times, 30th November

Ballymoss House: U+I and Colony Capital have paid €13.65m for Ballymoss House, a partially vacant modern office block in Sandyford, Co. Dublin. The 65,000 sq. ft., four-storey-over-basement property is located at the junction of Ballymoss and Carmanhall Road, and has been sold through agents Savills after a year on the market. The ground floor of the building is let to BMC Software on a 25-year lease from 2000, with upwards only rent reviews at five year intervals. The rent of c. €390k p.a. includes fees for 39 of the 164 basement car spaces and equates to c. €22 psf. If this relatively low rent was to be replicated throughout the entire building, it should command a rent roll of approximately €1.6m p.a. when fully let. The Irish Times, 30th November

Harcourt Printing & Office Supplies Building: Murphy Mulhall is guiding in excess of €2.25m for the 0.24-acre site of the former Harcourt Printing & Office Supplies premises and adjacent carpark (with space for between 15 and 20 cars) on South Richmond Street in Dublin 2. The premises, has been extensively refurbished at first floor level, and has been split into five offices suites (each of which is rented on a short-term basis), while the ground floor is currently unoccupied. An architectural study suggests the site could facilitate a four-storey, mixed-use property. The Irish Times, 30th November



Parliament Hotel: Halstonville Ltd, a company in the Tifco group, has lodged an application for permission to build a 77-bedroom extension to the Parliament Hotel in Dublin’s Temple Bar. The Tifco group currently owns or operates 13 hotels in Ireland, with a combined 1,600 bedrooms. Nama Wine Lake, 4th December

Zanzibar Hotel: The Irish Independent reports that the sale of the Zanzibar Hotel development on Dublin’s Ormand Quay is expected to be completed in the near future. The expected purchase price, in excess of €10m, represents a premium of over 100% on the €5m guide price quoted by CBRE when it was listed on the market in August. The property, which has planning permission for the development of an 89-bedroom hotel, attracted widespread interest from over 100 parties and is the latest hotel development opportunity in Dublin to sell for significantly above the asking price as the shortage of hotel rooms in the city continues. The Irish Independent, 1st December



Convent Lands Site: Cushman & Wakefield, acting on behalf of Dublin City Council, is offering a two-acre redevelopment site in Dublin’s north inner city for sale. The site, known as the Convent Lands, contains an extensive range of spacious period buildings. The council plans to dispose of these, and the adjoining sites, as part of a development agreement to ensure the site is transformed into a high quality, mixed-use neighbourhood in the near future. Likely uses for the site include apartments, high density student accommodation, hotel, retail or office. Although the agents have not quoted a guide price, The Irish Times reports that one city centre developer expects bidding to begin at over €10m. The Irish Times, 30th November

Ballycullen Site: A 9.16-acre site in Ballycullen in south Dublin with planning permission for 74 three and four bedroom homes is being offered for sale by Savills, under the instruction of NAMA-appointed recievers. The site is being offered for sale by way of a licence agreement, a new sales method which allows developers to gain possession of housing sites by paying an initial fee and then reimbursing NAMA for the remaining site value when the houses are sold. In this case, the site has an open market value of between €6.5m and €7m, and the expectation is that the successful bidder will pay an initial fee of around €1m to gain control of the site, and a further fee of about 25% of the projected selling price per house of €300-400k when any of the constructed houses is sold. A third condition will involve the buyer agreeing a percentage that will be payable to NAMA should the houses sell for over their projected value. The Irish Times, 30th November

Navan Development Site: A company controlled by Davy Hickey Properties chiefs Brendan Hickey and Hugh Lynn is due to pay €6.4m for a 44-acre development site with potential for 400 new homes in the commuter town of Navan, Co. Meath. This represents a premium of 60% over the €4m guide price set by joint agents Lisney and Smith Harrington for the site, which is located within the perimeter of Navan’s urban area. The site fronts on to Academy Street on the Dublin Road out of Navan, and forms part of the grounds surrounding Belmont, a substantial period house. In addition to the proposed development of residential units on the site, it is reported that the new owners will seek planning permission for a commercial development. In return for the commercial development, the owners are expected to offer six-acres which can facilitate the construction of a new school on the site. The Irish Independent, 4th December

Permanent TSB (PTSB) Mortgage Rates: PTSB has extended its cashback offer for new customers (which was due to expire this month), until June 2017 and also reduced its mortgage rates. The biggest rate reductions will benefit first time buyers, who will now pay a variable rate of 3.7% on a mortgage of up to 90% LTV, down from the previous rate of 4.2%. Other customers will be able to fix their mortgage for up to five years if they owe at least €250k and have an LTV of less than 80%. The rate cuts are seen as a bid by PTSB to protect its market share as the top three providers (AIB, Bank of Ireland and Ulster Bank) increasingly dominate the market. The Sunday Times, 4th December

October Mortgage Approvals: Figures from the latest Banking & Payments Federation Ireland (BPFI) report show that the number of mortgages approved for the three months ending October 2016, based on moving averages, was 3,310. This figure represents a 2.6% decrease MoM but a 28.9% increase YoY. The value of mortgages approved in this period was c. €654m, a 3.4% decrease MoM but a 40.9% increase YoY. When comparing the January to October period in 2016 with the same period in 2015, mortgage approval volumes are up 5.5%, while values are 11.6% higher. BPFI Mortgage Approvals October 2016


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