11th July (Issue 405)
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.
RETAIL
Grafton Street, Dublin 2 The official kit supplier to both the Irish women’s and men’s football teams, and to Leinster rugby, is to open a new flagship retail outlet on Grafton Street in Dublin city centre. Premium sportswear brand Castore’s new shop will be in the Grafton Buildings at 34 Grafton Street. Other tenants in the block include fashion retailer Jigsaw and athleisure brand Sweaty Betty. Castore’s new Dublin shop will occupy a high-profile corner location at the junction of South Anne Street. The premises extends to 2,150 sq. ft and Castore is set to pay an annual rent of approx. €300k and is believed to have seen off competition from a number of other international retailers who were seeking to secure the space. The Irish Times, 5th July
Wicklow Street, Dublin 2 Lisney is quoting a price of €1.95m (NIY 6.53%) for a prime retail investment in one of Dublin city centre’s most sought-after locations. No. 19 Wicklow Street is a high-profile mixed-use building with long-term income and reversionary potential. The property, just 130m from Grafton Street, comprises a four-storey over-basement building, occupied by well-established tenants: the vegetarian and vegan restaurant Cornucopia, and tailor Louis Copeland, who have both been trading from the building since 1992. The building extends to approx. 3,115 sq. ft and is generating a combined passing rent of €140k pa. The WAULT is 9.3 years to the break option and 9.9 years to expiry. The Irish Times, 5th July
HOSPITALITY
Stephen’s Green, Dublin 2 Eamon Waters, the Co Meath entrepreneur, is planning to build a hotel in the centre of Dublin. The Grafton Residence, a company owned by Waters, has applied to Dublin city council for permission to build a 61-bedroom hotel at Textile House beside Peter’s Pub, near Stephen’s Green shopping centre. Waters bought the two-storey Textile House last year after it was put on the market for €6.5m. Waters wants to knock down the buildings at 3-5 Johnson’s Place and 2-5 Clarendon Market and replace them with an eight-storey building. If given the go-ahead, the hotel bedrooms would be located over the first to fifth floors, and would be used as an extension to, and managed by, the nearby Grafton hotel, which Waters also owns. The upper floors would include six apartments, while a restaurant, bar and retail unit would be located at the ground floor and basement levels. The Sunday Times, 9th July
Ormond Quay, Dublin 7 Dublin City Council has granted planning permission to the owners of the five-star Morrison Hotel in Dublin for an extension that will bring the total number of hotel rooms to 161. Zetland Capital, a London-based private equity firm, bought the Morrison in 2021 for an undisclosed sum though it was reported at the time that the deal was worth more than €65m. In the extension plan, four of the 16 new rooms are to be provided at basement level, while eight bedrooms are to be provided at ground floor in lieu of three meeting rooms. On the fourth floor, four bedrooms are to be provided. The Irish Times, 4th July
Hospitality Industry Dublin hotel prices rose to a new record in May, CBRE Ireland has said. Hotels in the capital saw an average daily rate of €209 in May, 3.5% ahead of a previous record in September 2022. On a YTD basis, the average daily rate across all Dublin hotels was €170. Occupancy rates across all Irish cities, including Dublin, remain strong, CBRE said in its second quarter hotel market report. Occupancy in Dublin averaged 78% to the end of May, “relatively in line” with the same period in 2019, CBRE said, predicting occupancy rates are set to grow in the busy summer period. The CBRE report shows deals picked up in the three months to June after a slower first quarter, with a total of €91m of transactions closed across six deals, including the sale of the Imperial Hotel and Spa in Cork city for approx. €25m to a private investor. A total of €135m of capital was deployed on Irish hotels in the first half of the year. The Irish Independent, 7th July
INDUSTRIAL/LOGISTICS
Tallaght, Dublin 24 Harvey has secured the sale and separate lettings of two adjoining units to the same occupier at Belgard Road Industrial Estate, a small scheme of just five units in Tallaght, Dublin 24. Having secured the sale of Unit 5, a mid-terrace industrial and office property of 3,132 sq. ft, to Limerick-headquartered electrical wholesaler Trade Electric Group (TEG) for over €400k, Harvey subsequently agreed the long-term letting off-market of the neighbouring Unit 6 to the same company. Unit 6 comprises an end-of-terrace industrial and office property of 2,885 sq. ft which had benefited from an extensive refurbishment. The Irish Times, 5th July
OFFICE
Sir John Rogerson’s Quay, Dublin 2 Marlet Property Group has secured a €102m refinancing facility with Cheyne Capital Real Estate for its Shipping Office scheme on Sir John Rogerson’s Quay in Dublin’s south docklands. The Shipping Office, developed on the site formerly occupied by the British and Irish Steam Packet Company, comprises 182,158 sq. ft of office accommodation over eight storeys, a 12,755 sq. ft roof garden, five terraces, 27 showers, changing facilities, 16 basement car-parking spaces with two electric-vehicle (EV) charging points and 234 bike spaces. The Irish Times, 5th July
St. Stephen’s Green, Dublin 2 A property development company has claimed in the Commercial Court that significantly understrength concrete was supplied for use in basement and ground floors of what it says will be an iconic office building near St. Stephen’s Green in Dublin. KC Capital Property Group Ltd says the defective concrete has been removed and the eventual cost of remediation will be at least €9m. The firm is behind what is to be known as the Greenside Building on Cuffe Street which, when complete, is expected to be worth €51m. The Irish Times, 10th July
RESIDENTIAL / DEVELOPMENT
MyHome Report Asking prices for Irish homes picked up in the three months to the end of June following three QoQ declines in a row, as the market showed signs of stabilising even as interest rates continued to climb, according to MyHome.ie. The average asking price for a home increased by 4.3% in the second quarter compared with the first three months of 2023, and are now 2.2% higher than the same time last year, at €325k, according to MyHome. That compared to a 0.4% QoQ drop in the first three months of the year. Dublin prices rose 3.3% in the period to the end of June and at an annual rate of 0.6%, according to the latest data. Homes outside the capital increased by 4.6% on the quarter and by 3.5% YoY. The Irish Times, 10th July
Residential Zoned Land Tax (RZLT) Hundreds of property owners lodged planning appeals in one week in May against a new tax designed to spur building on vacant land, an Oireachtas committee heard. The 600 appeals have added to the already high workload of An Bord Pleanála as it tries to overcome a major backload of planning files with a “blitz” of decision-making on smaller cases. In the face of the housing crisis the RZLT takes force next year as part of the Government’s effort to unlock vacant sites. The aim is to discourage hoarding by imposing costs on property owners, thereby boosting the supply of new homes. But appeals against the new tax now comprise “approx. 16%” of An Bord Pleanála’s workload. The Irish Times, 6th July
Fairview, North Dublin Residents are looking to overturn planning approval for 785 apartments on the grounds of St. Vincent’s Hospital in Fairview, Co Dublin. Five appeals on behalf of residents in the north Dublin suburb and the Ierne Social and Sports Club have been lodged with An Bord Pleanála. Dublin City Council granted permission for the €300m scheme after reducing the number of units from 811 to 785, a move that involved losing the top two storeys on the tallest 13-storey block. The applicants, St Vincent’s Hospital Fairview, have also lodged an appeal against three conditions attached to the planning permission. The large-scale residential development scheme comprises 303 build-to-rent units at Richmond Road and Convent Avenue. The scheme on the 23.4-acre site is being developed by Royalton Group, a British property development firm, in partnership with the board of St. Vincent’s Hospital Fairview. Under the terms of the deal, Royalton will build a new 73-bedroom mental health facility for St Vincent’s, which is currently located in a listed building that is more than 100 years old. The Irish Times, 6th July
Delgany, Co Wicklow The High Court has rejected a challenge to permission for the development of more than 200 homes on former monastery lands in Co Wicklow. Mr. Justice Richard Humphreys refused to quash An Bord Pleanála’s fast-track approval of the scheme proposed for Delgany by developer Drumakilla Limited. An Bord Pleanála granted permission in February 2021 for the construction of 232 homes on a 15.3-acre site sold by an order of Carmelite nuns for €15m in 2019. Located between Convent Road and Bellevue Hill, the proposed development would include 96 houses, 136 apartments over two four-storey blocks, and five three-storey duplex blocks. The Irish Times, 5th July
Housing Construction The transfer of State lands that could hold more than 3,000 homes to the Land Development Agency has been delayed, the Government has been told. Minister for Housing Darragh O’Brien updated Cabinet about the process of transferring land from various state bodies to the LDA, which was set up to streamline the process of building homes on the land. According to the update, three sites are now classified as “high priority, transfer delayed”, where progress has been held up “due to ongoing negotiations with the relevant landowners, despite the sites being largely unconstrained for delivery”. The sites are – lands adjacent to the Leopardstown Racecourse, owned by Horse Racing Ireland, with an estimated capacity of between 1,550 and 2,080 homes; ESB lands at Wilton Cork that could hold 300 units; and HSE lands at Colbert Quarter in Limerick, with an estimated yield of 700 homes. The Irish Times, 5th July
Residential Developments Strategy The residential property investment market in Dublin has seen a decline in deals, leading developers to find alternative ways to recover their investments. Rising interest rates, construction costs, and uncertainty in the office investment market have caused prices to increase and made investors cautious. As a result, developers are hesitant to sell apartment complexes to private rental or public purchasers. Instead, some developers are retaining and managing the complexes as rental properties. For example, Ronan Group Real Estate’s Libra Living has decided not to sell apartments at Spencer Place and is targeting long-term institutional investors. Another developer, Marlet, has already brought over 600 units to the rental market and is retaining the rest for investment. Other players like Richmond Homes and Hammerson are also entering the rental market with their completed or upcoming apartment developments. This shift reflects the demand for high-quality rental properties and the challenges in the investment market. The Business Post, 8th July
OTHER
Ireland’s commercial property market slowed sharply in the first half of the year, as the value and volume of deals dropped significantly. The €954m invested in the sector in the first half of 2023 was down approx. 48% when compared with the 10-year average. Only 51 deals took place in the period, down more than a third on the average. The data was revealed in JLL research tracking the investment market. Retail was the strongest performing. Retail parks were a particular draw for investors, with an off-market retail park deal accounting for the second-largest investment in the quarter, at €46m. The B&Q retail warehouse in Dublin’s Liffey Valley was bought for approx. €27m. The largest investment was a private rented sector investment for €55m. The research did point to some more positive signs, including the prospect of the end of interest rate hikes and the move by some businesses to a return to the office long-term. The Irish Times, 5th July
BNP Paribas Real Estate PMI The Irish construction sector rebounded in Q2, with increased new orders and employment at the fastest pace since March. Input costs rose at a slower rate, but supply chain delays worsened. While overall activity grew, some indicators were less positive, with reduced input buying and weakened business sentiment. Commercial activity drove the wider growth, while housing activity declined, though at a softer pace. The sector experienced a favorable demand environment, reflected in a fifth consecutive monthly expansion in new orders. Workforce numbers expanded for the sixth month, but input purchasing decreased slightly due to sufficient stock holdings and concerns about a potential market slowdown. Despite growth prospects, confidence remains historically subdued, partly due to concerns about inflation. BNP Paribas Real Estate Report, 10th July
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