11th January (Issue 329)
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.
MIXED
Carrickmines, South Dublin The owner of Carrickmines retail park is preparing for a €250m development on the 25-acre site. IPUT, which bought the park and its adjoining site in 2014, has scaled back the retail element in favour of more apartments and offices. The property company has submitted an application to Dun Laoghaire-Rathdown county council for a scheme of 1m sq. ft., which includes 440 apartments, 330,000 sq. ft. of offices and 43,000 sq. ft. of retail warehousing. They would be built in 11 blocks, varying in height from one to 11 storeys. The development will also include a four-acre park, 56,000 sq. ft. of leisure space including a cinema, two supermarkets, restaurants, bars, a crèche and medical centre. Of the 440 apartments, 132 will be available to purchase by individual buyers. The Sunday Times, 9th January
HEALTHCARE / NURSING HOME
Nursing Home Sector, Ireland According to CBRE Healthcare research, the value of transactions in the nursing home sector last year hit a record €600m, and since the start of 2019 more than €1.1bn has been spent in the sector. CBRE, which advised on the c. €100m sale of Trinity Care, says standards of care regulations could close smaller homes and take c. 7,000 beds out of the system. France’s Orpea Groupe acquired Mervyn Smith’s First Care group; the 140-bed Belmont facility in Stillorgan, Co Dublin; the 103-bed Athlunkard House in Clare; the 74-bed Kilbrew in Ashbourne, Co Meath; and the last 50% of the Brindley portfolio it did not own. Having entered the market in 2020 it now owns and operates 25 homes. Carechoice, owned by Infravia, a French infrastructure fund, bought Newtownpark House in Blackrock, Co Dublin, plus Beaumont and Brookfield in Cork, and Elm Hall in Celbridge, Co Kildare. It has 14 homes and over 1,300 beds. Germany’s Immac, which owns the Beechfield group, has nabbed four homes in Dublin, Kildare, Carlow and Meath. Belgian real estate fund Cofinimmo bought the Trinity Care portfolio, which it leased to DomusVi, a French operator. DomusVi has since bought Annabeg in south Dublin and Drakelands in Kilkenny. Aedifica, another Belgian fund, acquired two small groups, Signacare in the southeast and Virtue in south Dublin, then Bridhaven in Mallow, Co Cork, and the Altadore in Dublin. DIF Capital Partners, a Dutch investment fund, recently acquired Newpark Care Centre in north Dublin and Ashford House in Dun Laoghaire, and is seeking an operator. Last year it acquired Grace Healthcare, which runs seven homes. The biggest operator remains Irish: the Cardinal Capital-backed Mowlam Healthcare, with 27 homes. The Sunday Times, 9th January
HOSPITALITY
Travelodge Hotels, Ireland Apollo Global Management is considering selling a portfolio comprised of all the Travelodge hotels in Ireland. The process, considered to be early-stage, is being led by Eastdil Secured. Pricing details have yet to emerge, although market sources said the platform could attract offers c. €250m-€275m. Dubbed Clover, the portfolio includes 11 Travelodge hotels located across Ireland and Northern Ireland. The portfolio has c. 900 keys. The five Dublin assets include Townsend Street, Rathmines, Dublin Airport South, Dublin Airport North Swords and Phoenix Park. The remaining hotels are in Belfast, Cork, Galway, Waterford and two in Limerick. React News, 10th January
STUDENT ACCOMMODATION
Thomas Street and Parkgate, Dublin Patrizia has added to its investments in the pan-European alternatives sector by investing in two purpose built student accommodation (PBSA) buildings in Dublin for €120m. The assets, purchased separately by the Patrizia PanEuropean Property LP and Patrizia Europe Residential Plus funds, supply a city which is home to over 80,000 full time students. Completed in 2018 and 2019 respectively, Thomas Street and Parkgate provide a combined 576 student homes in the city centre. Patrizia will retain student accommodation operator Fresh Student Living to manage the two Dublin assets. The company has a portfolio of over 22,000 student and residential rental units under management. React News, 22nd December
RESIDENTIAL / DEVELOPMENT
Gibraltar Point, Sligo Plans have been lodged to build 129 new residential units on a 10-acre site at Gibraltar Point in Sligo. The proposed development at Second Sea Road is a joint venture between Carnarvon Ltd and builders Knoxpark Developments Ltd. Plans for the Gibraltar Point development were submitted after extensive consultation with local residents, political representatives and Sligo County Council. A breakdown of the proposed development includes 16 Type A/A1 four-bedroom semi-detached and detached houses; 69 three-bedroom semi-detached and terraced houses; nine two-bedroom apartments, 15 one-bedroom semis and terraced houses, seven two-bedroom detached houses, 10 four-bedroom Type F and F1 detached houses, and three apartments with the crèche building. The Business Post, 26th December
Housing For All, Ireland New deals due to be signed to lease 3,500 homes for social housing will cost the state more than €1.4bn, or €412k per property, over the next 25 years despite a commitment from the government to phase out the practice. Data released by the Department of Housing has shown that despite the move to phase out the leasing method, the state is still expected to take on 3,500 new leased social homes between 2022 and 2025 under the government’s Housing for All plan. The average cost of long-term leases approved in 2021 was €16.5k per annum. Based on that delivery cost, the additional 3,500 homes due to be leased would cost more than €1.4bn. The €1.4bn figure will further compound the cost of leasing homes for social housing to the exchequer. Under long-term leasing initiatives, landlords can lease their investment properties to local authorities at between 80% to 95% of the open market rent for up to 25 years. The council is also responsible for the upkeep of the property during the lease period. The Business Post, 26th December
Leopardstown, Dublin 18 Local opposition to plans for a “fast track” €230m apartment scheme on Leopardstown Road in Dublin 18 have received a boost. Dun Laoghaire-Rathdown County Council has recommended that the 463-unit apartment scheme, rising to 10 storeys in height, should be refused. Environmental group An Taisce also opposes the scheme. In total, more than 90 objections have been lodged by locals against the scheme. To comply with its Part V social housing obligations, the Homeland Group subsidiary has put a price tag of €23.07m on 45 units earmarked to be sold to the council for social housing. The developers have put an indicative price of €582k on its two-bedroom apartments destined for the local authority, with one-bedroom units priced at €427.5k and studio apartments €298k. The Dun Laoghaire-Rathdown County Council has told An Bord Pleanála that planning permission should be refused on four grounds, contending that the proposed development “would appear visually obtrusive and overbearing when viewed from several properties”. In its objection, An Taisce stated that the scale of the proposed buildings “is too great for this suburban area”. A decision by An Bord Pleanála is due on the proposed development later this month. The Irish Times, 4th January
Glenveagh Properties Performance Glenveagh Properties said it put in a strong performance in 2021 with revenue rising to €476m. In a trading update for the year ended December 31st 2021, the company said it closed 1,150 homes in the year. Core revenue generated totalled €402m, primarily from 977-unit sales, with core suburban average selling price at €308k. The building company said inflation was a challenge for the sector coming into the latter half of the year. Inflation of 6% in the second half of the year was marginally ahead of the 5% reported in the first half of the year, with cost inflation being offset by similar HPI levels. The total landbank value is forecast to be under €525m by December 31st 2022. The company completed a €75m share buyback programme during 2021 and made progress on a new €100m programme. That brought the total of shares repurchased during the year to 100m, with a total price tag of €108m. Looking ahead, Glenveagh is targeting 1,400 suburban home completions in 2022. The Irish Times, 5th January
Housing Prices, Ireland According to a report by MyHome.ie and Davy, average asking prices for homes rose 9.7% across the Republic last year, to €290k, including an “uncharacteristically sharp” 1.2% increase “during the normally quiet winter months”. The report shows that banks are increasing the amounts loaned to those they are approving for mortgages, particularly anyone who already owns property. In November, the average mortgage given to anyone moving home was a record €304k, c. 12% higher than a year earlier, says MyHome.ie. There is little sign of conditions easing as there were just 11,300 homes listed for sale on MyHome.ie, the lowest on record and down 21% on 2020, with the shortage of residential property for sale most acute outside Dublin. The same is true in the rental market. According to the report, wage growth – with pay currently rising at 5.4% – was a factor in driving up mortgages, as lenders comply with rules imposed by the Central Bank. However, the Central Bank’s rules had “somewhat” checked house price inflation. The Central Bank calculates that its mortgage-lending rules have prevented house prices rising by 10-25% above existing levels. Asking prices have been rising most rapidly in the Republic’s richer neighbourhoods. In south Dublin, sellers sought €694k for four-bedroom semi-detached houses last year, 9% more than 12 months earlier. In Galway city, prices were up 2.2% on the year to €285k. In Cork city they rose 1.9% to €295k. In Limerick city they increased 7.7% to €210k while in Waterford city they increased 6.3% to €169k. The Irish Times, 4th January
Residential Property Transactions 2021 The average price paid for a home has gone up by €25k since the pandemic struck, figures taken from the Property Price Register by Davy Stockbrokers show. The latest official figures show they increased by 13.5% in October, according to the CSO. The Property Price Register shows that the average price paid for a home last year was €342k. Just before the pandemic in 2019 the average transaction value was €317k. Strong inflationary pressure in the housing market is evident from the rise in the value of transactions. There were €18.5bn of residential transactions in 2021, up from €16.2bn in 2020. Davy Stockbrokers said the figures for 2021 are not yet complete and the final out-turn will be closer to €19bn. Just 11,300 properties were listed as being for sale on the property website MyHome.ie at the end of last year. This was a fresh record low and down over 20% on 2020. The Irish Independent, 7th January
Clontarf, Dublin 3 Ires Reit has announced that it is buying 152 apartments in Dublin for €66m. The deal includes 108 completed apartments at Ashbrook in Clontarf. It has also forward purchased a second phase of the development which is currently under construction. The completed apartments comprise 39 one-bedroom units, 66 two-bedroom and three three-bedroom, all of which were developed in the early 1990s. 91% of the apartments are occupied and the remaining 10 apartments are expected to be leased by the time the deal closes later this quarter. The new phase includes 44 apartments on an adjoining site. Of these, 11 will be studio apartments, with the balance comprising eight one-bedroom units and 25 two-bedroom ones. These are expected to be completed by the second half of next year. The developments are in a rental pressure zone and will be subject to rent regulations. The company says that it is expected to generate a gross yield of 4.93%. The Irish Times, 5th January
Large Scale Residential Schemes, Ireland Apartment developers are being given permission by national planners to sidestep the requirement to provide crèches in new large-scale residential projects, following claims that they don’t expect many families to live in new rental homes. In recent years, government housing policy has been tailored to incentivise the development of apartment blocks and fostering a long-term rental market in Ireland that would be suitable and affordable for families. Under state planning laws, residential developers are obliged to provide a minimum of one childcare facility with 20 places for every 75 homes built. Planning documents for dozens of apartment blocks show developers claimed there would be no need for a crèche as part of the development because they did not expect families to live in their apartment complexes. Childhood Services Ireland, an Ibec lobby group for the crèche sector, has warned that the childcare system throughout Ireland is at “breaking point” and many parents face waiting lists of up to 12 months to secure places in crèches for their children. Planning approval has already been granted for 16 apartment developments that would not include any childcare facilities, with a further 16 apartment projects still under review. The Business Post, 9th January
OTHER
Data Centres, GDA Echelon Data Centres, a developer and owner of digital infrastructure assets, has secured a €855m construction loan to build-out its platform of Irish data centres. US private equity giant Starwood Capital – through affiliates – has backed Irish-owned Echelon with the debt facility. The loan, believed to be the largest construction facility issued in Europe over 2021, will facilitate the construction and completion of data centres at Echelon’s four Irish sites including the ones at Clondalkin and Arklow, offering a combined capacity of c. 400MW. The gross development value of the Irish sites is estimated to be over €5bn. React News, 11th January
CRE Investment, Ireland More than €2bn was invested in the Irish property market in Q4 2021, bringing the total for the year to €5.5bn, according to figures from real estate agent Savills Ireland. This compares to investment of €3bn in 2020 and is the second-highest level ever recorded. The largest transaction was Blackstone’s acquisition of Meta’s new European campus in Ballsbridge, Dublin, for €395m, while KPMG’s fourth-quarter pre-letting of 290,000 sq. ft. at Hibernian Reit’s Harcourt Square development, due in 2026, was the largest office leasing transaction of the year. The agency predicted 2022 was likely to see a “buoyant” office market as workers return, while the retail sector will also likely record a “more positive” year. The final quarter of 2021 saw strong trading in the retail sector as 13 assets exchanged, the largest of which was the Park Collection, sold to Marlet Property Group by Marathon Asset Management for €74m. In 2021 the industrial sector’s share of investment volumes continued to grow accounting for 18% of the market. The sector’s vacancy rate in Dublin remained at a historic low of c. 1% throughout 2021. The Irish Times, 10th January
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