10th October (Issue 418)
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.
OFFICE
North Park Business Park, Dublin 11 Iroko Zen, a French real estate investment trust, has acquired J5 Plaza in Dublin 11 from Fine Grain Property (FGP) in an off-market transaction. The building in North Park Business Park was sold by FGP for approx. €18m. Comprising 62,211 sq. ft of floorspace and 140 car park spaces, the property was bought by FGP in 2019 and was let to a number of tenants including the HSE. Since its purchase, FGP has undertaken a number of asset management initiatives on the property and has let it entirely to the HSE under a new 15-year lease beginning May 2023. The agreement incorporates five-yearly rent reviews in accordance with CPI and has no break options. React News, 5th October
South Frederick Street, Dublin 2 Just over five years on from the €38m sale of its former Dawson Street headquarters, New Ireland Assurance’s offices on nearby South Frederick Street are being offered to the market. No. 5-9 South Frederick Street, to the rear of the landmark premises acquired in 2018 by Oakmount and Core Capital, is being offered for sale by CBRE at a guide price of €12m. The existing structure consists of five storeys of office space over a basement car park and extends to 38,427 sq. ft. The building has a net area of 22,970 sq. ft. The Irish Times, 4th October
Parkmore East Business and Technology Park, Galway Block 4 Parkmore East at Parkmore East Business and Technology Park in Galway is guiding at a price of €5.5m through Avison Young (NIY 7.77%). Built in 2016, Block 4 comprises a detached three-storey office building of 27,663 sq. ft and comes for sale fully let at a current rent of €470k pa to Business Objects Software Limited, trading as SAP Solutions. The Irish Times, 4th October
O’Connell Street, Dublin 1 Joint sales agents Robert Colleran and Alan Ferris are guiding a combined price of €4.2m for the “Cavenidish Collection”, a portfolio of two Georgian office buildings overlooking the Parnell monument at the top of O’Connell Street in Dublin City Centre. Nos. 1-2 Cavendish Row briefly comprise a four-storey over-basement building facing towards O’Connell Street from its junction with Parnell Street while 5 Cavendish Row comprises a two-bay building facing the entrance to the Gate Theatre. Extending to 11,485 sq. ft and 5,748 sq. ft, the buildings are guiding at prices of €2.7m and €1.5m respectively. The properties briefly comprise a mix of open-plan and individual offices, boardrooms, meeting rooms, breakout areas, kitchen/canteens. The Irish Times, 4th October
Lower Leeson Street, Dublin 2 Colliers is asking €1.9m for 40 Lower Leeson Street, Dublin 2, a vacant Georgian office property which had been guiding at €2.25m. 40 Lower Leeson Street is a vacant four-storey over basement Georgian building recently refurbished to high traditional standards throughout. It provides a mix of impressive reception rooms that can comfortably accommodate open plan configurations, together with smaller rooms, suitable for cellular offices. Extending to 4,295 sq. ft, it also benefits from independent access from the street to the lower ground floor self-contained area. The Irish Independent, 5th October
Ballsbridge, Dublin 4 Iput has secured Ireland’s recently established media commission, Coimisiún na Meán, as a tenant for its offices at One Shelbourne Buildings in Ballsbridge, Dublin 4. The commission, which will be responsible for regulating broadcasters and online media, has agreed to occupy 21,000 sq. ft of space at the building on a five-year lease term at a rent of approx. €50 per sq. ft. The commission’s new self-contained headquarters had been occupied previously and for many years by IBM’s consulting division. IBM relocated recently to WeWork’s serviced office space at Charlemont Exchange. The Irish Times, 4th October
Stripe, the payments company, is looking at more than doubling its footprint in Dublin by either leasing or buying a new office building. According to market sources, the company is in active talks with real estate agents as it recommences hiring after a round of redundancies it announced last year. Stripe’s current European headquarters is the One Building, where it has held a lease for the 45,000 sq. ft property since 2015. It was previously reported that the company paused plans to acquire approx. 400,000 sq. ft of new office space last year due to the weakening global economic environment and changes to working patterns arising from the Covid pandemic. The company has revised its plans and is now sourcing approx. 100,000 sq. ft of property in Dublin. The Business Post, 7th October
South Docklands, Cork Lisney Commercial Real Estate has let an office on its books within Navigation Square 2 in Cork’s South Docklands to professional services firm, Marsh McLennan. The office unit, which comprises a floor area of approx. 6,000 sq. ft is located on the ground floor of the high profile, Grade A office development overlooking the River Lee. Marsh McLennan will join existing occupiers NetApp, Iconic Offices and Clearstream in the riverside office development. According to market sources, the agreed rent was approx. €32.00 psf. The Business Post, 7th October
RETAIL
Blanchardstown Shopping Centre, Dublin 15 Goldman Sachs has instructed CBRE and Eastdil Secured to handle the sale of Ireland’s largest shopping centre, which is expected to be introduced to investors at the industry conference Expo Real. No formal guide price has been released, although vendor expectations are approx. €700m (NIY approx. 7.5%). Goldman Sachs – which had a mezzanine loan position on the mall – took control of it from Blackstone at the end of 2020, when it was valued at approx. €750m in late 2020. The bank is understood to have invested a further €60m into the asset via upgrading works. The asset comprises the main two-level shopping mall, comprising more than 180 retail units and anchored by several large tenants including Primark and Marks & Spencer. It also includes two adjacent retail parks and external retail units, as well as a five-floor office building spanning approx. 72,000 sq. ft. Approx. 60% of the Blanchardstown’s value is held in the shopping centre component, with the park element accounting for approx. 40%. The split between shopping centre and retail parks could lead to bidders clubbing together. React News, 5th October
Opera Lane Collection, Cork City Centre Cushman & Wakefield is guiding a price of €5.5m (NIY 7.74%) for the Opera Lane Collection, a portfolio of three retail units at the Opera Lane scheme just off St Patrick’s Street in Cork City Centre. The collection is available for sale individually or in one lot, with two of the units on St Patrick’s Street and the third on Emmet Place. Lot 1: Unit 16, Opera Lane comprises a retail unit fronting on to St Patrick’s Street. Occupied by the US fashion retailer Tommy Hilfiger, the unit extends to 6,364 sq. ft over ground, first and mezzanine level. The current NOI is the higher of €271.6k pa or 9% of the store’s turnover.
Lot 2: 17a Opera Lane comprises a retail unit fronting on to St Patrick’s Street. Occupied by Select, the unit extends to 817 sq. ft all of which is located on the ground floor. The current NOI is €100k pa. Lot 3: Unit 19 Opera Lane comprises the historic Queen Anne building which is occupied by Starbucks on a long-term lease. The building extends to 3,573 sq. ft over ground, first and mezzanine levels. The current NOI is €96.8k pa. The Irish Times, 4th October
HOSPITALITY
Hospitality Sector Forecast Dublin hotels are forecast to see average room rates increase by a further 10% next year which is stronger growth than London (9%). This is according to the latest Hotel Monitor 2024 survey from American Express Global Business Travel. It says the Dublin rate rises are being driven by high occupancy rates, the persistent supply shortfall in Dublin, particularly at the luxury end, and a lack of alternative providers around the city. The Amex survey also points out that despite an anticipated softening of leisure travel demand, prices are expected to continue to rise in most locations. The Irish Independent, 5th October
MIXED-USE
Aston Quay, Dublin 2 19 – 21 Aston Quay is being offered by Savills with full vacant possession. The entire property extends to 18,985 sq. ft and comprises a four storey over basement retail/ office property which was formerly occupied by USIT Student Travel as their head office. Each floor is serviced by two separate stairwells and passenger lift, with separate loading and secondary fire escape access available off Price’s Lane located to the side of the property. Savills, 4th October
HEALTHCARE / NURSING HOMES
CBRE Healthcare October 2023 Report A report from CBRE on senior living stated that while Ireland is noted for its young and productive demographic, the national ‘aged population’ is also increasing significantly. The age bracket with the highest increase in population in Census 2022 was the group aged 70 and above, which increased by 26% during the period 2016-2022. Ireland’s population aged 65 and over is now forecast to reach over 1.5m people (25% of the national population) by 2051.
Only a small percentage of this age group (4.5%) will require nursing home care, meaning the vast majority will age within their own homes and communities; living either independently or with some supports in place. It is this population demographic that ‘Senior Living’ schemes aim to attract, as they provide a “right sized” solution in a low maintenance home with security and social company. The concept of Senior Living is hugely successful in many parts of the world already and has gained popularity particularly in the United Kingdom. The CBRE report takes a closer look at the concept in an Irish context and explores the current and future landscape for senior living schemes in Ireland. CBRE Healthcare Report, 9th October
RESIDENTIAL / DEVELOPMENT
Sandyford, Dubin 18 The Comer Group’s project to complete the landmark Sentinel building in Sandyford is in jeopardy due to conditions imposed on the developer by the local council. Last month, Dún Laoghaire-Rathdown County Council granted the group, headed by billionaire Galway brothers Luke and Brian Comer, planning permission to complete the 14-storey South Dublin building as an apartment block. The most recent approval for development included a condition that ordered the Comer Group to revise the layout of the apartments in order to double the number of three-bed units that will be in the block. According to sources close to the Sentinel project, this requirement severely impacted the viability of the plan. The Comer Group lodged its recent plans for the Sentinel building in July. The firm has proposed developing the shell-and-core block into 110 apartments, which would be made up of 22 one-bed, 60 two-bed and 28 three-bed units. The Business Post, 8th October
CBRE Q3 Development Land Report CBRE Ireland has confirmed that the total spend on development land in the Irish market during the third quarter of 2023 reached approx. €80m across 18 transactions. This was an increase of approx. 30% in the three months to the end of September compared to the previous quarter. According to the agent, the increase reflects some positive signs of developers and investors starting to adjust to new pricing levels that have been the result of higher financing costs. The Business Post, 8th October
Landlord Tax Relief Government leaders are preparing a landlord package in Budget 2024 that will offer up to 20% tax relief on a portion of their rental income on condition that their properties stay on the market for a specified period. The details on the cut-off rate at which landlords will be able to claim their 20% annual tax relief have yet to be decided, but €3k to €4k “would be the range”, a source said. It is understood that landlords will be required to guarantee that their properties will remain on the rental market for a specific period, potentially up to two or three years. It is hoped that relief for small landlords will encourage them to stay in the market. The Sunday Times, 8th October
Residential Property Tax Councillors in Dún Laoghaire-Rathdown and South Dublin County Councils have voted for the maximum discount allowable for Residential Property Tax in 2024. The Local Property Tax, which is based on the value of a property, has a base rate that can be varied by plus or minus 15% by each local authority. The Irish Times, 9th October
Rising labour and material costs are deterring people from buying fixer-uppers, particularly in South Dublin areas, according to property experts. With the cost of building materials having risen 25% since 2019, buyers are postponing projects or deciding not to buy homes in need of attention. Although there was some relief in the cost of timber in August, energy inputs are still high and have resulted in the prices of cement and block continuing to rise, according to the CSO’s wholesale price index. The price of plaster has increased by 20% in the year to August while cement and steel product prices have risen by 14.6%. The price of a cement block cost €1.04 in August 2019; today it costs €1.79. Where it cost €20k to renovate a bathroom in 2019 to a basic finish, home owners are now paying an extra €5k. The Sunday Times, 8th October
Rathmolyon, Co Meath Receivers have been appointed to a property development company that last month asked home buyers to pay an additional €60k each to complete houses they’d previously signed contracts to buy. Interpath Advisory has now been appointed as receiver over the developer behind the scheme, Meathamatic. The homes are at the Ringfort estate in Rathmolyon, Co Meath. They were sold off the plans in 2020 and 2021 with some families and couples agreeing to pay €275k for a three-bed property. The receivers were appointed by Spudmuckers, a creditor of the company, which extended finance to the developer in June this year. The estate consists of 16 three-bed and four-bed houses. Fifteen families entered into contracts, while one house is under offer. Some went sale agreed in 2020 while others entered into contracts at the beginning of 2021. The four-bed properties were being advertised at approx. €300k three years ago. Buyers were initially told the first phase of the construction would be completed in quarter one of 2022, with the second phase due to be finished in quarter two. But the scheme has been subject to delays and financial overruns. The Irish Independent, 4th October
Airbnb has agreed to provide funding for the development, maintenance and restoration of some of Ireland’s most historic homes which could see some previously off-limits properties appearing on the accommodation platform for the first time. In addition to financial aid, the properties will be given “expert guidance and workshops” from Airbnb “to help them understand how to showcase and maximise their properties’ potential on the platform”. Airbnb noted that a large portion of these homes are in rural areas that rely heavily on tourism. The Irish Times, 5th October
Foxrock, South Dublin Having failed to find a buyer at its initial asking price of €3.25m in February last year, the Grove, a late-1960s bungalow on a 1.48-acre site, returned to the market seven months ago with a new, heavily reduced guide of €2.25m (31% discount). An examination of the Property Price Register shows that The Grove changed hands for €2.875m on September 20th. The price paid represents a premium of 28% on the discounted price tag and a far lesser discount of 12% on the sum that had been sought for the property in 2022. The Irish Times, 5th October
OTHER
BNP Paribas Real Estate Ireland Report The decline of activity in the construction sector slowed in September after two months of sharp contraction, according to new research from BNP Paribas. The headline BNP Paribas Real Estate Ireland Construction Total Activity Index – which tracks changes in the total volume of construction activity compared with one month previously – fell short of the 50.0 mark last month, posting 48.6 and signalling a reduction in activity. The posting marks the third consecutive month of decline in activity. However, it is up on August’s index (44.9), with BNP noting that last month’s “decline was the softest in the current sequence of decreasing activity”. September saw the pace of rising costs slow after input cost inflation picked up in July and August, with firms noticing reductions in the price of steel, sanitary ware and insulation. The Business Post, 9th October
CBRE Commercial Real Estate Investment Report Commercial property investment in the past three months tracked significantly behind long-term averages that have been recorded by the sector, new data from CBRE has shown. Over the past ten years, an average of €1.1bn has been invested in Irish commercial property in the third quarter of each year. New data from CBRE has shown the rate of investment between July and September of this year was €444m, a decrease of more than €650m on the long-term average. Investment in commercial property during the most recent quarter has brought total spend in the sector up to €1.4bn this year. However, over the past ten years, an average of €4.3bn has been invested per annum in commercial property. CBRE has forecast the Irish market will likely record less than half of the typical level of investment recorded over the past decade. The €444m of investment in commercial property in Ireland during the third quarter was spread across 30 transactions. The Business Post, 4th October
Bremore Port, Co Dublin Fresh details of a proposed new Johnny Ronan-backed billion-euro port development north of Balbriggan are set to be formally unveiled. The high-level vision for the new Bremore Port in Co Dublin has been developed by Copenhagen-based architecture firm Henning Larsen and is expected to detail plans to include facilities for offshore wind turbine storage and assembly, as well as green hydrogen facilities. A full consultation process will now begin, with a planning application expected in 2025 or 2026. The capital investment is expected to exceed €1bn. The Irish Independent, 8th October
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