11th July (Issue 104)

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.




AIB Grafton Street: Ireland’s largest property fund, Irish Life, has purchased AIB’s principal branch office, which has frontage onto both Grafton Street and Wicklow Street in Dublin city centre. The fund outbid strong domestic and international interest to emerge as the highest bidder, paying c. €50m for the investment. Irish life is expected to earn a net initial yield of c. 3.5% on the investment, which was previously purchased by the German fund manager GLL Real Estate for c. €28m in 2010. The rent roll on the property is c. €1.8m p.a., and the sale price equates to a capital value of €2,800 psf. The sale was handled by CBRE, and is understood to have attracted bids from IPUT, two European investment funds and an unknown Irish investor. The Irish Times, 5th July

Project Anchor: Joint agents JLL and HWBC are guiding €43m for three successful shopping centres in the Dublin suburbs of Dún Laoghaire, Donaghmede and Clondalkin. The Project Anchor portfolio will also include a three-storey office block at Lock Road in Clondalkin, which is currently let to the Department of Social Protection. The purchase price will provide an initial yield of c. 6.8%, with significant opportunities to increase the return through active management. The portfolio is for sale in either one or more lots, and currently produces a combined rent roll of c. €3m p.a., with a weighted average unexpired lease term of approximately eight years. The Bloomfield Shopping Centre in Dun Laoghaire produces rental income of €830k p.a. from tenants including Argos, Boots, Dealz and Jack & Jones, while anchor Tesco owns its own store. The 59,000 sq. ft. Kilbarrack Centre is also anchored by Tesco, which owns its own 25,000 sq. ft. store. The shopping centre’s tenants, which include Lloyds Pharmacy, Pizza Hut and Clannad Medical Centre, generate rental income of €680k p.a. The Mill in Clondalkin is anchored by Dunnes Stores, which owns its own unit, while 30 other retailers such as Boots, Specsavers and Carphone Warehouse produce rental income of €1.2m p.a. The Irish Times, 5th July

Lidl Castleknock: An Bord Pleanála has granted planning permission to Lidl to proceed with a c. €15m commercial development in Castleknock, north Dublin, despite objections from local residents and politicians, including Taoiseach Leo Varadkar. The mixed-use development will include an anchor Lidl supermarket, a number of smaller retail units, a medical centre and eight apartments. The scheme was previously refused permission by Fingal County Council in 2014. The Irish Times, 6th July

Sports Direct Dunnes Stores: Sports Direct has reportedly approached Dunnes Stores with a view to making an offer on up to seven of the Irish retailer’s premises. The company is believed to have targeted the Dunnes Stores unit next to Sports Direct’s flagship Irish store on North Earl Street in Dublin, and is also reportedly interested in stores in Cork and Waterford. The Sunday Times reports that Dunnes Stores could represent a natural choice for Sports Direct’s expansion, as the company has multiple stores in prime city centre locations, and has reportedly up to 24 vacant units in its portfolio. The approach is believed to be at a preliminary stage, with no deal having been concluded. The Sunday Times, 9th July

The Kiosk, Ballsbridge: Brothers Colum and Ciarán Butler, who run the Starbucks franchise in Ireland, have purchased a landmark Dublin coffee shop – the kiosk at the centre of Ballsbridge. The Butlers outbid several investors for the tiny 37 sq. ft. premises, paying €330,000 to acquire the kiosk, which is located on a prime location at the junction of Lansdowne, Pembroke and Northumberland roads. The purchase price equates to c. €8,918 psf before purchasing costs are taken into consideration. Starbucks has grown rapidly under the control of the Butler brothers, with over 60 outlets now located in the greater Dublin area. The Irish Times, 5th July



Golden Lane: Mm Capital has acquired 31 – 36 Golden Lane in Dublin 2 in a deal worth c. €22m. The 31,000 sq. ft. property is expected to be let to the software analytics company New Relic, who are likely to move in next year. The property will allow New Relic to accommodate up to 300 staff. The Irish Times, 11th July

Sandyford Offices: Melford Property Consultants has brought two Sandyford office investments to the market. The first is a recently refurbished two-storey HQ building located at Sandyford Business Centre on Burton Hall Road. The unit, which is guiding €2.5m, extends to 8,000 sq. ft., and is currently leased to CareWorks from Q2 2017 on a 20-year lease at €183k p.a., with a tenant break option in years 10 and 15. The purchase price will offer a return of c. 7%. Melford is also inviting offers in excess of €850k for a 3,546 sq. ft. third-generation office at Apex Business Centre in Sandyford. The unit is currently let on a five-year lease that expires in July 2020. It is currently significantly under-rented at a rent of €52.5k p.a., with potential to increase this to c. €98k p.a. in 2020. The Irish Times, 4th July

Dublin 8 Development: Newmarket Partnership PM Ltd has applied to Dublin City Council to construct a 110,000 sq. ft. building (including 100,000 sq. ft. of office space), at the junction of Newmarket Street and Mill Street in Dublin 8. The proposed scheme involves the demolition of existing buildings on the site and construction of a new six-storey over-basement building. NAMA Wine Lake, 9th July

Dublin Office Space: New figures by Knight Frank show that the take-up of office space in Dublin exceeded 1 million sq. ft. in Q2 2017. The total space transacted for the quarter was 1,049,356 sq. ft., bringing the total take-up for H1 2017 to 1,491,942 sq. ft., an increase of 30% on the corresponding period in 2016. According to Knight Frank, the high take-up in Q2 could be attributed to a flow of new office stock, as all of the top eight transactions involved new or refurbished office stock. Facebook’s rental of 170,000 sq. ft. of the Beckett Building at East Wall was the largest deal in the quarter, followed by AIB’s agreement to occupy 152,000 sq. ft. of space at Block H in Central Park. JP Morgan’s purchase of a 128,220 sq. ft. building at Capital Dock, Zendesk’s pre-letting of 57,865 sq. ft. at 55 Charlemont and Google’s decision to lease 51,096 sq. ft. of the Velasco building completed the top five transactions. The Irish Times, 4th July



Fernhill Hotel: Savills are guiding €4.5m for the Fernhill Hotel, 10 holiday homes and the private residence of owner Michael Bowes, who has decided to retire from heading up the hotel business. The properties lie on a c. 5.5-acre site on the edge of Carrigaline, and c. 100 metres from the new N28 road to Ringaskiddy. The hotel contains 39 en-suite bedrooms, a resident’s bar, a dining room and a former health club. The Irish Examiner, 29th June

The Millrace Hotel: CBRE are guiding €2m for The Millrace Hotel in Bunclody, Co. Wexford. The hotel, which was constructed in 2004, contains 60 well-appointed guest rooms, including 30 interconnecting rooms suitable for family occupancy. In addition, the hotel features the Slaney Suite, which contains its own bar and kitchen area and has capacity for 120 guests. On the top floor is a rooftop restaurant with views over the countryside. The complex contains 50 car parking spaces and an overflow carpark with capacity for a further 70 to 80 cars, and is situated on a 3.7-acre site. The Irish Independent, 6th July



The Windmill Collection: Cushman & Wakefield are inviting offers in excess of €13.5m for a portfolio of 67 apartments near Kempton Vale in west Dublin, which are located within five minutes’ walk of Coolmine railway station. The current rental income from the portfolio is c. €990k p.a., meaning the sale will offer a net yield of c. 7%. The Windmill Collection includes six one-beds, 60 two-beds and one three-bed. The one-beds currently rent for c. €1,150 p.m., the two-beds rent for c. €1,250 p.m. and the one three-bed rents for €1,400 p.m. The selling agents advise that the market rents for the apartments would be €1,300, €1,550 and €1,800 p.m. The Irish Times, 4th July.

Ballsbridge Residence: Lisney are guiding €3.3m for an elegant Victorian home located at 23 Clyde Road in Ballsbridge, Dublin 4. The two-storey, over-basement house is rented for €96k p.a. on a residential lease running until March 2020, with the tenant having a rolling break option subject to 30 days prior notice. The agents expect a significant uplift in the value of the property, which was refurbished and extended in 2008, to more than €4m once vacant possession has been obtained. The five-bedroom house extends to 6,254 sq. ft., and includes an extension with two bedrooms and a basement gymnasium. The Irish Times, 5th July

Dublin Docklands Apartments: David Carson of Deloitte, the NAMA-appointed receiver to a company previously owned by developer Liam Carroll, is seeking planning permission to build 360 apartments on a site in the Dublin docklands. The development would consist of four buildings of up to seven storeys, with a total floor area of c. 463,000 sq. ft., containing 108 one-beds, 198 two-beds and 54 three-beds. The site extends to 3.7 acres and is located between Sheriff Street Upper and Mayor Street Upper, close to the new Central Bank HQ. The Sunday Times, 9th July

IDA Site Redevelopment, Dublin 8: Newmarket Partnership PM Ltd has submitted a major application to Dublin City Council to demolish all buildings on an IDA site at Newmarket Industrial Estate in Dublin 8 and construct four new buildings. The first building will contain an eight-storey, 90,000 sq. ft. hotel above three lower levels (two basement and one lower ground) containing an unspecified number of hotel rooms. The second building will consist of six storeys and contain 8,500 sq. ft. of retail space at ground floor and 34 apartments on the upper stories (eight one-beds, 20 two-beds and six three-beds). The third building is an eight-storey over lower ground floor and double-basement building containing 58 apartments (15 one-beds, 35 two-beds and eight three-beds). The fourth building will have six storeys over a lower ground floor and basement and contain 85,000 sq. ft. of office space. NAMA Wine Lake, 9th July

Housing Repossessions: The Sunday Business Post reports on the increasing number of housing repossession cases across the country. The number of repossession cases being brought before the courts has increased substantially in the past few years as banks and loan acquirers seek to work through non-performing loan books. According to Central Bank figures, in 2013 there were c. 99,000 family home residential mortgages in arrears of more than 90 days. This figure had decreased to c. 53,000 by Q1 2017. However while a total of 120,894 loans have been restructured so far, this does not always resolve the issue, as figures show that c. 13% of these borrowers are not meeting the revised terms. The Sunday Business Post, 9th July

Emergency Housing Legislation: The government is introducing emergency legislation to ensure that construction doesn’t have to stop on c. 75 housing developments in Dublin’s commuter belt. The majority of the developments are estates which were put on hold during the property crash before being given a five-year extension to their original planning permissions. Although many of them are now under construction, they will not be built by the time the planning extensions expire, so the government is rushing through a planning law to enable the developments to get a further five-year extension. It is believed that the developments, which are mainly located in Dublin, Meath, Kildare and Wicklow, include social housing projects. The Sunday Business Post, 9th July



HP Leixlip: HP Inc has retained CBRE to manage the sale of its 195-acre Liffey Valley Technology Campus in Co. Kildare, which may sell for north of €50m. The facility consists of nine main buildings, six of which are dedicated to high-quality manufacturing, clean room, warehouse and office use. The facility has a cumulative gross floor area of c. 1,460,000 sq. ft., and includes c. 70 acres of undeveloped land which offers development potential. The current rental income from the facility is c. €3.8m p.a., which is being generated from medium-term leases which cover c. 35% of the building area. The Irish Times, 11th July



Grianan Estate: Grianan Estate in Donegal, one of the largest organic farms in Europe, has been sold to Glenmore Estate Farms by the Donegal Investment Group for €17.425m. The farm is located at Speenoge, Burt, less than 20 minutes from Letterkenny, and extends to c. 2,400 acres, consisting of land mainly reclaimed from Lough Swilly. The farm includes c. 1,290 acres of organically farmed prime land, an extensive range of farm buildings and a lake extending to c. 500 acres. The Irish Independent, 6th July


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