11th April (Issue 91)
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.
MARKET COMMENTARY
Q1 2017 Review: New research from Colliers International shows that the value of commercial property transactions in Q1 2017 was over €470m, significantly less than the c. €738m in the corresponding period in 2016. Over 70% of the Q1 2017 spend was in Dublin, and only one transaction exceeded €100m – the forward funding of Grant Thornton’s new HQ in City Quay in Dublin by Irish life for c. €136m. Despite the low level of activity, Colliers International forecast that the turnover for FY 2017 should still be in the region of €3bn. Meanwhile, JLL has advised that like in Q1 2016, the first three months of this year started relatively slowly with a limited supply of quality product coming on to the market. JLL advised that demand from both overseas and domestic investors continues to be steady, but that some were being more selective. The Irish Times, 5th April
LOAN / PORTFOLIO SALES
Lone Star Refinance: Lone Star has mandated Morgan Stanley to arrange and manage the planned refinance of c. €420m of primarily non-performing mortgage loans on the bond market. The transaction represents the third time in recent months that the fund has refinanced loans via the markets, with the total value at almost €1.5bn. According to ratings agency DBRS, 2.35% of the loans are performing, while approximately one third of the mortgages are located in Dublin. Servicing of the mortgage loans is conducted by Start Mortgages. The Sunday Times, 9th April
Project Rosetta: The Sunday Times reports that Cabot Financial is one of three bidders who has advanced to the second round of bidding for AIB’s Project Rosetta, a c. €80m portfolio of unsecured loans in Northern Ireland. While the portfolio primarily consists of mortgage shortfalls which remain due following the voluntary sale of commercial properties, it is also believed to include personal loans and credit card debt. As the debt is unsecured, the portfolio is expected to sell at a steep discount. The Sunday Times, 9th April
RETAIL
Charlestown Shopping Centre: Bovale Developments, the owner of Charlestown Shopping Centre in Finglas, Dublin 11, is seeking planning permission to extend the centre to accommodate additional shops, apartments and leisure facilities. The company has received financial backing from NAMA to spend c. €75m on the second phase of the development, 10 years after the centre opened. The extension will include c. 55,000 sq. ft. of shopping facilities, a gym and a crèche, and planning permission will be sought for an additional 233 apartments. The retail element will include a key store opposite the entrance to the centre, and the extended space will add to the current rent roll of c. €2.6m p.a. from tenants such as Dunnes Stores, Heatons, Boots and Eddie Rockets. Previous NAMA funding enabled the owners to develop and lease a nine-screen Odeon cinema and Leisureplex on the site. The letting agents for the new development phase will be Mason Owen Lyons and Savills. The Irish Times, 5th April
Phibsborough Shopping Centre: Plans have been submitted to Dublin City Council to redevelop the 1960s Phibsborough shopping centre at a cost of c. €50m. The scheme will involve tripling the amount of retail space in the complex and the construction of apartments for 340 students. The development will include construction on part of the grounds of Dalymount Park, but will not include the demolition of the existing eight-storey office tower, which will instead be refurbished. Apart from the tower, most of the centre is a single-storey strip mall, topped with car parking, and the developers plan to build up the site (with building heights ranging from three to seven storeys) to accommodate new shops, offices, restaurants and student accommodation. The student apartments will be contained in two blocks of four to six storeys. The shopping centre’s current owner is MM Capital, who paid c. €17m to acquire the property from NAMA in 2016. The Irish Times, 5th April
OFFICE
Golden Lane: The Sunday Business Post reports that MM Capital is in the final stages of closing the c. €16.5m purchase of 31-36 Golden Lane in Dublin 8 from vendor GE, which was the former occupant of the building. GE is selling the property due to the global unwinding of its GE Capital division. The Sunday Business Post, 9th April
Dublin Docklands: Joint agents JLL and Savills are guiding €32m for One and Three Gateway, two office investments on the East Wall Road in Dublin’s north docklands that were developed in the late 2000s. The two buildings extend to 94,800 sq. ft., have 71 car parking spaces, and are generating c. €2.08m of rental income p.a. (c. €21 psf), offering a net initial yield of 6.23%. The weighted average unexpired lease term in the development is c. 4.1 years, while the capital value (based on the guide price) works out at €338 psf. The selling agents have indicated that they are also prepared to sell the two blocks separately – One Gateway extends to 51,500 sq. ft. over six floors, is priced at €18m and is producing rental income of c. €1.17m p.a. from tenants ESB, Whirlpool, Colt and Galvanic; while the five-storey Three Gateway extends to 43,300 sq. ft. and is rented solely to ESB for c. €915k p.a. The Irish Times, 5th April
Earlsfort Terrace: Arthur Cox is selling an office block it owns at Earlsfort Terrace in Dublin 2, after recently moving into a newly built HQ on the same street. Cushman & Wakefield is quoting a sale price of c. €11m for the five-storey Dolmen House, although the Irish Times reports that the building may sell for considerably more than the guide price due to its modern specification and superb location. The building extends to 12,415 sq. ft. and has 15 car parking spaces. The Irish Times, 5th April
Galway Office Development: Developer Gerry Barrett has sought planning permission from Galway City Council for a c. €100m project which will overlook Galway Docks in Galway city. The application seeks permission to develop four blocks which will include c. 280,000 sq. ft. of office space and c. 21,500 sq. ft. of retail space. The four buildings will be between six and seven storeys tall and will share a single basement area while overlooking a landscaped plaza. Mr Barrett acquired the site in 2005 for c. €9m. The Irish Times, 5th April
HOTEL
Abbey Hotel: CBRE is inviting offers above €3.5m for the Abbey Hotel, which is located at 52 Abbey Street off O’Connell Street in Dublin 1. The hotel currently contains 21 bedrooms, a bar and a restaurant and is generating a ‘satisfactory’ turnover according to the selling agent, who also advise that there is scope to provide an additional 12 bedrooms in the property, subject to planning permission. The Irish Times, 4th April
Mount Street Application: Dale Vision Ltd has lodged an application to Dublin City Council for permission to demolish the existing building located at 7-8 Mount Street and replace it with a newly constructed 53-bedroom boutique hotel, which will extend to c. 35,000 sq. ft. over six-storeys and contain a rooftop restaurant on the top floor. Dale Vision is a newly-incorporated company controlled by Paddy McKillen Jnr and Matthew Ryan. NAMA Wine Lake, 9th April
Talbot Street Application: Clare Tynan, the owner of the 2 star, 29-bedroom Celtic Lodge Hotel on Talbot Street, has applied to Dublin City Council to convert the adjacent building at 79/80 Talbot Street into a 44-bedroom hotel with a bar and function room at ground floor level. The building previously housed a Guiney & Company shop at ground floor level before the group went out of business. NAMA Wine Lake, 9th April
RESIDENTIAL / LAND
Lynams Hotel: RTE has reported that Dublin City Council has agreed to enter into a five-year contract with the new owners of Lynams Hotel on Dublin’s O’Connell Street. The contract will allow the council to use the former hotel as a ‘transition centre’ for homeless people. The concept of transition centres has emerged over the past few months as a temporary solution to provide homeless people with temporary accommodation, until such time as they can be provided with permanent housing. Lynams Hotel was sold for c. €6m in November 2016 to an unnamed acquirer. NAMA Wine Lake, 9th April
West Dublin Landbank: Savills has launched the sale of a c. 58 acre landbank beside the IDA’s Grange Castle Business Park in west Dublin. They have not issued a guide price for the site, but recent sales would suggest land values of €250k – €300k per acre, which would give the site an estimated value of €16m. Of the 58 acres, some 47 acres are zoned to “provide for enterprise and employment-related uses”, while the remainder is zoned “to protect and improve rural amenity and to provide for the development of agriculture”. The site is located on the Adamstown Road, about 6km from the N4 and N7, and 7km from the M50. The Irish Times, 5th April
Terenure Development Site: Lisney is guiding in excess of €15m for a well located 3.43-acre site with planning permission for 36 houses and 30 apartments close to Terenure village in south Dublin. The 30 apartments will consist of eight one-beds, 20 two-beds and two three-beds. Lisney has advised that there is potential to build an additional eight residential units on the site, subject to planning permission. The Irish Times, 4th April
Donnybrook: Knight Frank is seeking €6m for numbers 72, 74, and 76 Morehampton Road, three substantial Victorian houses in Donnybrook, Dublin 4. The houses are interlinked over four floors, extend to almost 14,000 sq. ft. and are currently occupied by the John Scottus School. There is convenient car parking to the front of the properties and extensive gardens and a yard to the rear. The properties could be suitable for a number of purposes, including conversion into apartments, standalone homes or an embassy, however the selling agents believe a hotel or hotel-type suites are possibly the most attractive options from an investment return perspective. One of the conditions of the sale is that the school should be allowed to remain in number 72 for a maximum of two academic years. The Irish Times, 5th April
Carrickmines Site: Offers above €3.5m are being sought by CBRE for a large detached house on a c. 1.66 acre redevelopment site at Glenamuck Road in Carrickmines, Dublin 18. The five-bedroom house, known as Dunluce, extends to 4,000 sq. ft. and includes a garage which has been converted into a gym. CBRE has advised that the site provides an excellent opportunity to develop a large apartment block or housing scheme. The Irish Times, 4th April
Malahide Housing Site: CBRE is inviting offers of c. €2.5m for a c. 4.1-acre housing site at Streamstown in Malahide, north Dublin. The site adjoins several new housing developments including Streamstown Wood and Abington, and the selling agents have advised that with planning permission the purchaser could develop an ‘intimate residential scheme’ of 16-20 homes. The Irish Times, 4th April
Magee Barracks: The Sunday Business Post reports that Magee Barracks in Kildare Town, a 50-acre site which was sold for c. €8.2m last year, was bought by Jersey-based Irish property developer David Kennedy. Mr Kennedy is apparently involved in pre-planning discussions with Kildare County Council, whilst John Spain and Associates is reportedly preparing a design for the site. However, no planning permission has been lodged, and there has been no indication as to what Mr Kennedy is planning for the site. The Sunday Business Post, 9th April
Crosslane Property Group: The Sunday Times reports that the student accommodation developer Crosslane Property Group is planning to enter the Irish market. The company is reportedly negotiating the purchase of a site in Dublin with a view to launching a student accommodation block by summer 2019. Crosslane operates in the UK, Germany, France and Holland and has a portfolio of over 3,100 beds, with 821 under construction and plans to add a further 2,200. The Sunday Times, 9th April
Embassy House: Developer Johnny Ronan has refinanced Embassy House, his Venetian-style palazzo located on the Burlington Road in Dublin 4 with the backing of Latvian bank Rietumu. Mr Ronan refinanced the six-bedroom townhouse in a c. €5m transaction that also included nearby properties at 96 Leeson Street and a mews building on Waterloo Lane. Embassy House extends to c. 7,000 sq. ft. over four floors. The Sunday Business Post, 9th April
Clondalkin Apartments: A company owned by Emmet O’Neill, a former chief executive of Topaz, has applied for planning permission to build 22 two-bedroom apartments on a site located on Monastery Road in Clondalkin. The plans involve demolishing a vacant shop and forecourt canopy and constructing a three-storey building with car parking and landscaped gardens. The Sunday Times, 9th April
OTHER
Octopus Investments: The healthcare arm of Octupus Investments has opened a c. €13m primary care centre in Mullingar, Co. Westmeath, with plans for up to 12 more throughout Ireland. The £6bn London-based fund was reportedly attracted to Ireland by higher yields, more attractive margins and a less competitive market. The fund is planning to invest c. €120m in building primary care centres around the country. Their second primary care centre is under construction in Crumlin in Dublin, a third scheme will be developed on Dublin’s South Circular Road, while a fourth scheme in west Dublin is due to close legals this week. The Mullingar scheme was built in partnership with local developer Feasible Developments, and is located near the Midland Regional Hospital. The Sunday Business Post, 9th April
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