10th November (Issue 20)

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.



Hazel Portfolio: A joint venture involving Clarendon Properties and US hedge fund York Capital Management has been chosen as the preferred bidder for NAMA’s Hazel Portfolio. The partnership bid over €120m for the portfolio, which was guiding €115m. The portfolio consists of Wilton Shopping Centre in Cork, Drogheda Retail Park in Meath and Gateway Retail Park in Galway. Wilton is the prized asset in the portfolio, accounting for over €70m of the sales price and over €5m of the c. €9m annual rental income. Clarendon Properties is led by Paddy McKillen and Tony Leonard. The Irish Times, 4th November



One Dockland Central: Hibernia REIT has pre-let 27,500 sq. ft. of the 55,000 sq. ft. One Dockland Central (formerly Commerzbank House) in Dublin’s docklands to Hubspot Ireland. Hubspot Ireland is a subsidiary of the US software firm Hubspot, who has a market capitalisation of c. USD$1.8bn. Hubspot has signed a 20 year lease with an option for the tenant to exercise a break after ten and a half years. The annual rent for the space is €1.3m, with six months’ rent free at the beginning of the lease.  The Irish Independent, 9th November 

Kennedy Wilson: Kennedy Wilson has purchased two office properties from NAMA for c. €11.8m. The properties are located on Sir John Rogerson’s Quay in Dublin’s docklands and comprise c. 19,000 sq. ft. of office space, equivalent to a purchase price of c. €633 psf. Kennedy Wilson purchased the properties along with two other properties from an unnamed UK bank, with the cumulative yield on the four properties being 5.7%. NAMA Wine Lake, 8th November

NAMA Development: NAMA are to fund the proposed €87m development of a grade A office property on the North Wall Quay in Dublin’s docklands. Receiver’s PWC have sought planning permission for the block, which will consist of seven to nine storeys and over 380,000 sq. ft. of office space. A key feature of the property is the single floor plates of 45,000 sq. ft., making it one of the largest in Dublin. DTZ has been appointed as the letting agent for the property. The Irish Times, 4th November 

Dublin 2 Site: Offers in excess of €9.5m are being sought by agents Knight Frank for a c. 0.53 acre site at Charlemont Place in Dublin 2. Of particular interest to developers is the fact that the site comes complete with planning permission for a six storey office block, with a total floor area of 70,100 sq. ft. The property can cater for either a single occupant or multiple tenants due its floor plate design. The Irish Times, 4th November 

Merrion Square: Murphy Mulhall is guiding in excess of €2.5m for a Georgian property at 75 Merrion Square in Dublin 2. The four storey, 5,494 sq. ft. property is being sold with vacant possession under the instruction of Duff and Phelps. With its strong location, 13 car spaces and recent refurbishment, the property is expected to attract the interest of both investors and individuals. The Irish Times, 4th November



Ronan Hotels: The Sunday Independent reports that developer Johnny Ronan is planning to build four new hotels in Ireland. The first hotel will be a 70 bed boutique hotel in the Bewley’s Building on Dublin’s Grafton Street. Second will be a four star, 167 bed hotel known as Aquavetro, which will be situated alongside Tara Street Dart Station in a 22 storey waterfront tower. Ronan’s third hotel is to be in Enniskerry, Co. Wicklow. The 200 bed Enniskerry Park Hotel is to be located on a 4.5 acre site opposite The Powerscourt Hotel. The final hotel is to be built in Delgany, Co. Wicklow. Ronan hopes to have all the hotels completed in 2017 and 2018. The Sunday Independent, 9th November

Hilton Kilmainham: Tifco Hotel Group has confirmed the purchase of the Hilton hotel in Kilmainham, Dublin 8. The four star, 120 bed hotel was previously owned by John Lally’s Lalco and Tifco will continue to operate the hotel under the Hilton brand. Tifco owns a number of three, four and five star hotels in Ireland and Germany, including the five star Heritage in Co Laois. The Irish Times, 4th November

Clarion Limerick: Savills are inviting offers of €3.5m for the investment sale of the Clarion Hotel in Limerick. The four star, 158 bed hotel is operated by Choice Hotels Ireland and trades under the Clarion Brand. The hotel is let to Merzolt Limited under three leases with over 15 years until expiry and current rental income of €200k. At 16 storeys high, it is currently Ireland’s tallest hotel. The Irish Independent, 5th November 

Hotel Supply: JLL’s latest research report focuses on the significant shortage of hotel rooms in Dublin, suggesting that c. 3,000 rooms are required in the short term to satisfy increasing demand. Occupancy rates in Dublin in YTD 2015 are 84.2%, higher than London (81.5%) and Amsterdam (79.8%). The average cost of a room in Dublin city centre for YTD 2015 is €127, a 17.2% increase on the 2014 figure of €109. While JLL have identified 3,415 rooms in the pipeline over the medium term, they emphasise that only c. 50% of these have planning permission and some speculative schemes may not be developed. JLL Hotels & Hospitality Group, November 2015



Cashel Investment: Joint agents Lisney and Bannon are guiding €6.5m for a shopping centre and adjoining petrol station in Cashel, Co. Tipperary. The current annual rental income of the 70,362 sq. ft. shopping centre is c. €658k. Tesco are the anchor tenant, paying €565k p.a. with over 11 years left until lease expiry. Investors will have the ability to increase the rental income from the centre as there is currently vacant retail space of 26,910 sq. ft. The petrol station is also let to Tesco at an annual rent of c. €164k, with c. 8 years remaining on the lease. Bids for the individual assets will also be considered. The Irish Times, 4th November



Cork Apartments: DTZ have set a price tag of €3.5m on two residential investments in Cork. The first is a block of 11 apartments at Langford Hall in Cork City, which is for sale at €2.25m and generating annual rental income of c. €146k (c. 6.2% net yield). The second opportunity is Mansfield House, a 13 apartment complex located outside the city in Passage West. The property has a guide of €1.25m with annual rental income of c. €127k (c. 9.7% net yield). DTZ have advised that both apartment blocks enjoy excellent occupancy rates. The properties are available to be purchased jointly or separately. The Irish Examiner, 5th November 

New Legislation: The government is believed to be close to introducing new legislation for the residential rental market. Under the terms of the legislation, landlords will now only be able to increase rents every two years, as opposed to every year under current legislation. When increasing the rent, landlords will also be required to provide evidence which justifies the increase. A tenant’s deposit will also be held in trust by a third party going forward, a move which is expected to remedy the cause of most landlord-tenant disputes. The Sunday Business Post, 8th November



BOI Branch: A Bank of Ireland branch in Fairview, Dublin 3 is being offered for sale by Knight Frank for €2.1m. BOI currently pay an annual rent of c. €196k to occupy the 6,134 sq. ft., three storey end of terrace property, which is let on a 25 year lease from December 2006. The lease includes a tenant only break option at the end of the 15th year and upward only rent reviews. A sale price of €2.1m would represent an initial yield of c. 9%. The Irish Times, 4th November


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

Origin Capital funds senior debt transactions in the CRE investment sector, typically in the €3m – €15m range. If you would like to discuss how Origin Capital can help with your funding requirements, please contact us on 01 662 9264.

Origin Capital is a wholly owned subsidiary of LeBruin, a leading provider of corporate finance and debt advisory solutions.