11th March (Issue 487)
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-USE
Receivership RELM is appointing receivers to 14 property companies controlled by Paddy McKillen Jr on foot of debts of €50m. Ken Fennell and Brendan O’Reilly from Interpath Advisory have been appointed to act as receivers to the property companies. The move will not impact tenants of the buildings, who will continue to trade as normal. RELM made the move on foot of debts of €50m that are secured on prime assets which are estimated to be worth over €30m. The 14 companies own a number of properties including 6-7 St Stephen’s Green, the Star Bar at 43 Baggot Street Lower, Lamb Doyle’s pub in Sandyford now slated for redevelopment, Ashton’s pub in Clonskeagh, a residential property 10 Forster Court, Galway, The Butler Arms hotel in Kerry and The Foxhunter Pub in Lucan. The Currency, 10th March
PBSA
Portfolio Sale Global Student Accommodation (GSA), Ireland’s biggest student flats provider, is exploring a recapitalisation or possible sale of part of its Irish portfolio, valued at €500m according to the property website Green Street News. If the sale goes ahead, it will be the largest ever student accommodation deal in the Irish market. The portfolio, which is in Dublin, comprises 2,000 beds across five properties, including New Mill in the Liberties and Ardcairn House at Grangegorman, which are operated under the Yugo brand. GSA owns ten properties in Ireland and 4,000 beds and since entering the market in 2015, it has invested €850m. It developed the five Dublin student blocks with its long-term joint venture partner Harrison Street but purchased the portfolio in 2020 in a deal valued at €400m. A recent report by Cushman & Wakefield found that student bed demand across Ireland is projected to grow to more than 115,000 by 2034-2035. Sunday Times, 9th March
RETAIL
Abbey Street Upper, Dublin 1 Eastdil Secured and Savills have been appointed to find a buyer for the Jervis Shopping Centre. The Irish Times understands the centre is to be offered to the market within weeks at a guide price of approx. €120m. Jervis Shopping Centre extends to more than 385,000 sq. ft and has more than 90 retail units, including a food court, across two storeys supplemented by mezzanine floors. While the centre had counted Next among its occupiers for more than 20 years, the UK fashion retailer relocated to a new flagship premises nearby in late 2018. More recently, the Jervis Shopping Centre suffered a blow with the decision by New Look to exit the Irish market. The UK discount fashion retailer is understood to have been paying about €2m a year in rent for its Jervis store which, at 40,000 sq. ft, was the largest in its chain of more than 1,000 outlets worldwide. In 2017, AIB Real Estate Finance provided a €155m loan to refinance the Jervis Shopping Centre. The Irish Times, 5th March
OFFICE
Kildare Street, Dublin 2 Kennedy Wilson is understood to be looking to secure between €75m-€80m for 20 Kildare Street through Agents CBRE and Knight Frank. Located close to Leinster House, the 65,000 sq. ft office block is fully occupied by a range of tenants includes Aircastle, Ara Partners, Consello, Davidson Kempner Capital Management, Dentons, Egon Zehnder and Lanthorn that is generating a rent roll of approx. €4m a year. The Irish Times, 11th March
Hanover Quay, Dublin 2 Separately, Kennedy Wilson is understood to have instructed CBRE and Savills to sell office accommodation at Capital Dock, the landmark mixed-use scheme it developed at the gateway to Dublin’s south docklands. Ten Hanover Quay, as the offices are known, comes just three years after the US group and its joint venture partner on the scheme, Nama, secured global fintech and payments provider Fiserv as tenants for all 68,300 sq. ft of its accommodation. The company agreed a deal in 2022 to occupy the property on a 15-year lease with a tenant break option in year 12. While the rent was not disclosed at the time, it is understood Fiserv agreed to pay between €55 and €60 per sq. ft. The seven-storey office building, which is housed within a converted warehouse and stables dating from the 1780s, is expected to command a guide of about €70m. The Irish Times, 11th March
Ballsbridge, Dublin 4 US-headquartered financial giant BlackRock Asset Management has formally agreed to occupy 21,430 sq. ft of Glencar House on a 10-year lease at a blended rent of just over €65 psf. The company’s accommodation also includes a 3,767 sq. ft private terrace on the fourth floor. Agent JLL represented BlackRock in the negotiations while C&W represented Glencar’s developer, Killeen Properties. The property, opposite the RDS on Merrion Road, comprises 75,000 sq. ft of grade-A office accommodation. The Irish Times, 5th March
South Mall, Cork City A French investment fund paid almost €5m for a South Mall office block in what was the second biggest commercial property deal in Cork in H2 of 2024. Mata Capital IM, fund manager for private investment vehicle Osmo Energie, spent €4.9m on Nos 26/27 South Mall, in its first acquisition outside of France. The Examiner, 7th March
HOSPITALITY
Dalata has said it is undertaking a strategic review to enhance value for shareholders, “including but not limited to a potential sale” of the company. The company operates a portfolio of 55 hotels, including 30 owned hotels which are valued at €1.7bn including assets under construction, 73% of which relates to hotels in Dublin and London. The company, which owns the Maldron and Clayton hotel chains, reported revenue of €652.2m, up 7.3% YoY, supported by additions to the portfolio in 2023 and 2024. ‘Like for like’ revenue per available room of €115.78 was up 1% versus 2023. The Business Post, 6th March
South William Street, Dublin 2 After nearly half a century of being owned and operated by the Keogh family, Peter’s Pub is being offered for sale as a going concern by Lisney at a guide price of €4.25m. The pub briefly comprises a traditional-style licensed premises and is presented in excellent condition throughout. The premises occupies a prime trading pitch in Dublin’s south city centre and sits within a short walk of St Stephen’s Green and Grafton Street. The Irish Times, 5th March
Haddington Road, Dublin 4 Dublin City Council has given the go-ahead for plans to demolish Smyth’s pub and replace it with a larger pub and apartments, despite locals’ fears about a superpub. Courtney Lounge Bars Ltd has secured permission to demolish all existing buildings on site at 10 Haddington Road and build a mixed-use building over four and five floors, comprising a pub at basement and ground floor levels and six apartments on the upper floors. The council decided the scheme “would not seriously injure the amenities of the area or property in the vicinity”. The Irish Times, 5th March
INDUSTRIAL
Nexus Logistics Park, Dublin Iput has committed €230m to launch a new sustainable logistics sub-fund, which is set to deliver 1.5m sq. ft of logistics space amid rising demand for modern distribution hubs. Iput has raised €115m in new capital from two new investors, ISIF, and a European institutional investor via CBRE IM’s Indirect Strategies, with the remaining €115m being invested by Iput through a combination of capital and its zoned logistics landbank. Construction is set to commence in March 2025 on 105 acres of zoned land near Dublin Airport. The Business Post, 6th March
Parkmore West Business & Technology Park, Galway French asset manager Principal Asset Management has acquired two commercial buildings in Galway for €7.2m in its first acquisition in Ireland for a European logistics and industrial fund managed by Theoreim. The asset comprises Building 4, a prime life sciences investment at Parkmore West Business & Technology Park to the east of the city. The deal was brokered by Harvey. Building 4 extends to a total gross floor area of 54,165 sq. ft and is fully let to Medtronic Vascular Galway under two leases which are co-terminus in 2043 and producing rental income of €496k pa (€9.14 psf, capital value of €133 psf, net initial yield of 6.25%). The Irish Independent, 6th March
RESIDENTIAL/DEVELOPMENT
2024 Review Turnover in the development land market, encompassing the Greater Dublin Area and the three regional centres of Cork, Galway and Limerick, surged during 2024 to reach €762m, almost double the level seen in 2023 and falls just below the long-term average of €774m. There was a return of larger sized transactions during the year with 5% valued at €50m or greater. The proportion of transactions in the less than €5m price bracket declined reaching 64%. Land with residential development potential accounted for just over two thirds of transactions in 2024. The GDA absorbed the majority, 92%, of development land turnover during the year, while the regional centres of Galway, Cork and Limerick accounted for 4%, 3% and 1% respectively. Sherry Fitzgerald Report, 6th March
Mortgages About 7,000 mortgage customers are paying interests rate of between 8.5% and 10%, a research paper has found. The Oireachtas Library and Research Service paper found that 1%, or 7,000, of all private dwelling mortgages were at interest rates as high as 10%. All were customers of non-bank non-lenders. Similarly, one in eight of all mortgage holders, or about 100,000 customers, are paying interest at 6% or more. The data, provided by the Central Bank of Ireland, shows that interest rates for bank customers are much lower. Half are paying interest of 4% or less, and 38% pay between 4% to 6%. The paper outlines how retail credit firms have grown to have a 16% share of the Irish market. Most non-performing loans previously on the books of commercial banks have been transferred to these companies. The Irish Times, 10th March
Funding The construction of up to 5,000 social and affordable homes has effectively stalled because of a row over Government funding. Several Approved Housing Bodies (AHBs) confirmed they had been forced to halt work on projects in Dublin and elsewhere because the Department of Housing has refused to sign off on funding for cost-rental schemes since last August and for social housing schemes since last October. While some projects have been given the go-ahead in recent days, others remain in limbo, sources said. A contractor working on a scheme in Dublin plans to pull workers off site next Friday because of a lack of funds. The delays are expected to result in a slowdown in supply from the AHB sector, which delivered close to half of all new social homes in 2023. The delay in approvals appears to stem from a row over funding between the Department of Housing, the Department of Finance and the Department of Public Expenditure. The Irish Times, 10th March
OTHER
Dublin Airport An extra 6,000 car parking spaces will be available at Dublin Airport from this week. The former QuickPark site is reopening under new branding and management and will operate as Park2Travel. It will be run by APCOA. A 24/7 bus shuttle service with transfers every 12 minutes during peak times. It is hoped the new car park will relieve some of the pressure since the site closed in 2020 and travel resumed after Covid lockdowns. Rte.ie, 10th March
South Mall, Cork Esports Ireland’s first dedicated complex, the National Esports Centre, has been opened in Cork. The centre represents a €1m investment in gaming infrastructure and the creation of 10 new jobs, with further positions available in gaming, media and digital technology expected as the centre continues to expand. The gaming sector in Ireland is growing at 7-9% per year. It also continues to experience growth globally, with video game revenue – including esports – reaching €210.1bn in 2023, which was a 4.6% increase from the previous year. The National Esports Centre will be a hub for professional esports athletes, aspiring gamers, developers, gaming researchers, students and innovators. It will also serve as a training ground for Irish esports teams preparing for major global competitions. The Irish Times, 10th March
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