11th October (Issue 67)
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.
LOAN / PORTFOLIO SALES
Project Oyster: Cerberus has acquired the c. €2.5bn par value Project Oyster loan portfolio from Ulster Bank for an undisclosed amount. The portfolio consists entirely of distressed loans, and 95% of the loans have been in arrears for two years or more. Business loans make up 71% of the portfolio, with buy-to-let mortgages (19%) and owner-occupier mortgages (10%) accounting for the remainder. By value, c. €2.15bn of the loans are based in the Republic of Ireland with the remainder in Northern Ireland. The Irish Times, 10th October
Hermitage Clinic: AIB has acquired a portfolio of loans from NAMA which are secured by the 101-bed Hermitage Clinic in Lucan, south Dublin. While the loans were originally worth c. €40m, it is unclear how much AIB has paid to acquire them. The loans were originally taken out by a syndicate of 72 individuals, which included Sean Mulryan and Larry Goodman. The clinic had turnover of c. €57m and profits of c. €4.2m in 2015. The Sunday Business Post, 9th October
RETAIL
Liffey Valley Shopping Centre: The Irish Times reports that the German pension group Bayerische Versorgungskammer is leading the race to acquire the Liffey Valley Shopping Centre in west Dublin, after bidding over €600m. The shopping centre is currently owned by a consortium of Hines, HSBC Alternative Investments and the Grosvenor Group. Although some market sources have indicated that the German fund has already been chosen as the preferred bidder, this has not been confirmed. The Canadian Pension Plan Investment Board, which previously bid on the Blanchardstown Centre, is also believed to be interested in Liffey Valley Shopping Centre. The Irish Times, 11th October
L’Oréal Grafton Street: L’Oréal has agreed to sublet No. 50 Grafton Street in Dublin city centre from Three. The unit will now trade under one of L’Oréal’s brands, which include Lancóme, Urban Decay and Giorgio Armani beauty. The property is owned by Irish Life, who purchased it for c. €6.75m in June. There are over seven years left on Three’s lease. The Sunday Times, 9th October
OFFICE
Capital Gate: The development company Genvest has sought planning permission for Phase One of Capital Gate, a suburban office scheme located c. 1.5km from Dublin Airport. The project is located at the junction of the M1 and the M50 on a c. 32-acre site. Phase One seeks approval for the development of c. 253,000 sq. ft. of office space across three blocks. The projected development cost of Phase One is c. €80m. According to industry observers, Capital Gate could facilitate up to c. 1.1m sq. ft. of office space. The Irish Independent, 6th October
Treasury Building: CBRE is guiding €33m for the freehold interest in the Treasury Building on Lower Grand Canal Street in Dublin 2. The property is currently let to high quality tenants such as the NTMA, NAMA, and the insurer Perrigo. The freehold interest equates to a 33.33% stake in the property, thereby valuing the property at c. €100m. The remaining 66.67% is owned by Ambiorix Ltd, who redeveloped the property in 1989. Ambiorix Ltd is controlled by Paddy McKillen and Johnny Ronan. The freehold interest is owned by Percy Nominees, who acquired their stake in 1989. When acquiring their stake in the property, Percy also agreed to give Ambiorix a 10,000-year lease in exchange for 33.33% of the rent roll. With the annual rent at c. €5.482m, the owner of the freehold interest will receive c. €1.83m. The property has a floor area of 125,066 sq. ft. over six floors and 110 car spaces on site, with a further 24 car spaces secured via a licence agreement on Clanwilliam Place. The property has a capital value of c. €800 psf and offers a net initial yield of 5.25%. The Irish Times, 5th October
Dublin Landings: Sean Mulryan’s Ballymore and Oxley Docklands Quay Ltd have begun the development of a new business district on a c. 5.8-acre site in Dublin’s North Wall Quay. The development of the Dublin Landings project will cost c. €700m and will see the development of c. 700,000 sq. ft. of office space across five blocks and 273 luxury apartments (a mix of one, two, and three-bed units). The development will be built over the next 4 years and the first office tenant, the NTMA, is expected to be in situ by Summer 2018. The Irish Times, 6th October
RGRE Ballsbridge: Johnny Ronan’s Ronan Group Real Estate (RGRE) has received final approval from An Bord Pleanála for the development of c. 325,000 sq. ft. of office space in Ballsbridge, Dublin 4. The site is located to the front of AIB’s HQ and there are a number of vacant blocks on the site at present. These blocks will now be demolished and replaced with two new blocks. Following the approval from An Bord Pleanála, the project looks set to commence in the next few months. Ronan acquired the c. 3.7-acre site in 2015 for c. €67.5m The Irish Independent, 6thOctober
Lower Mount Street: Credit Suisse is believed to be the front runner in the race to acquire an office block under construction at 100 Lower Mount Street in Dublin 2. The investment manager of the project is Ardstone Capital and Savills is marketing the property. The Sunday Business Post, 9th October
Golden Lane, Dublin 8: Offers of €15m are being sought by Lisney for a c. 31,000 sq. ft. office block at 31 – 36 Golden Lane in Dublin 8. The three-storey block, which was formerly known as Woodchester House, is currently occupied by GE Capital Markets, however they will vacate before September 2017. Once the block is vacated, the new owner will be free to either undertake a substantial redevelopment opportunity, or else seek planning permission to add one or two floors. The Irish Times, 5th October
Anglesea Street: The Irish Stock Exchange (ISE) has secured planning permission for a c. €10m project to expand its existing offices on Angelsea Street in Dublin 2. The project will be undertaken on the ISE’s main office at 24 – 28 Anglesea Street and the adjacent Armoury Building, which the ISE acquired for c. €2.7m in 2015. Upon completion, the ISE will have over 35,000 sq. ft. of office space, an increase of over 15,000 sq. ft. The Sunday Business Post, 9th October
Hawkins House: NAMA, their receivers Mazars and the OPW have suffered a setback in their proposed redevelopment of Hawkins House and Apollo House in Dublin 2. The planning application to demolish the existing properties and replace them with buildings ranging from five to 12-storeys was submitted to Dublin City Council in June 2016. The council has now requested further information, as they are concerned that the existing proposal “will not make a sufficient contribution to improving the environment of Poolbeg Street”. The Irish Times, 5th October
Sandyford Development: Ardstone Capital has received planning permission for their c. €120m office development project in Sandyford, Co. Dublin. The project will see the development of 5 five-storey office blocks, which will provide c. 430,000 sq. ft. of office space. The Sunday Business Post, 9th October
Citywest Development: Dali Properties Ltd has sought planning permission for a c. €10m office development project in Citywest, Dublin 24. The application seeks approval to develop two three-storey properties which will provide nearly 86,000 sq. ft. of office space. The Sunday Business Post, 9th October
Bray Office Block: An unnamed Irish company has paid over €11m for a 35,198 sq. ft. office block let to the HSE in Bray, Co. Wicklow. The HSE occupy Block B of Bray Civic Centre on a lease which still has over 11 years remaining. The current rent of €917k p.a. is subject to upward-only rent reviews every five years. The property includes 65 car spaces. The Irish Times, 5th October
25 Merrion Square and 25 Denzille Lane: Murphy Mulhall is inviting offers of over €3.5m for a Georgian property on 25 Merrion Square and 25 Denzille Lane in Dublin city centre. The five-storey over basement property has a floor area of over 8,709 sq. ft. and there is a modern mews to the rear. The current rental income is c. €213k p.a. from tenants which include DLS Capital Management and the Reputations Agency. The property has 17 car spaces to the rear. The Irish Times, 5th October
Sandyford Business Park: BNP Paribas is quoting €3.25m for two mid-terrace office properties which contain warehouse space to the rear in Sandyford Business Park in south Dublin. Unit 5 has an asking price of €2.25m, extends to 7,503 sq. ft. and is let to Festo Ltd at c. €165k p.a. Unit 2 is for sale at €1m, extends to 4,660 sq. ft. and is let to Fonua Ltd at c. €100k p.a. The Irish Times, 5th October
Lisney Research: The latest research from Lisney shows that prime office rents in Dublin city centre are continuing to rise, despite there being more than 3m sq. ft. of office space under construction in Dublin. Rents of €65 psf are now being sought for three developments (5 Harcourt Road, Three Park Place and 10 Molesworth Street). These rent levels are more than double the €30 psf sought at the bottom of the market. The Sunday Business Post, 9th October
HOTEL
Tower Hotel: FBD Hotels & Resorts has agreed to sell the Tower Hotel in Co. Waterford to the Neville Hotel Group for an undisclosed amount. The sale is expected to be completed within the next 30 days and the trading in the hotel will be unaffected by the sale. The Neville Hotel Group already own the Kilkenny River Court hotel in Kilkenny and the Royal Marine hotel in Dublin. The Irish Times, 10thOctober
RESIDENTIAL / LAND
Cork Street: Knight Frank is guiding over €7m for a c. 0.87-acre student accommodation site in Cork Street in Dublin 8. The site comes with planning permission for 182 bed spaces and 33,368 sq. ft. of commercial space, which was granted in 2009. However, this application was granted on the basis that a commercial operation on the site remained untouched. This condition is no longer applicable and a new feasibility study states that the site could now facilitate 431 bed spaces and 15,069 sq. ft. of retail space. The Irish Times, 5th October
Castleforbes Square: Hooke & MacDonald is inviting offers of €7.5m for 28 apartments in Castleforbes Square in the north Dublin docklands. The apartments are being sold on the instruction of the receiver, David Carson of Deloitte. The 28 apartments consist of nine one-beds, nine two-beds and ten three-beds. Although one unit is not let as it is used for viewing purposes, the remaining 27 apartments are generating rental income of c. €437k p.a. The Irish Times, 5th October
Blackhall Place: Savills has launched the sale of 9 – 13 Blackhall Place in Dublin 7, a student accommodation and office investment opportunity which is expected to sell for more than €10m. There are three blocks included in the sale. The first two blocks contain 33 residential units which provide 109 bed spaces, while the third block extends to 33,825 sq. ft. and is split into 19 office suites. The current rental income from the residential units is c. €640k p.a. and the office units provide rental income of c. €335k p.a. The properties offer an attractive net initial return of c. 9.33%. The Irish Times, 5thOctober
Loughton House: Former Health Minister James Reilly has agreed to sell his Loughton House property in Moneygall, Co. Offaly to an unnamed investor. The c. 15,000 sq. ft. property had been on the market through Ganly Walters, who now advise that a deal has been agreed to acquire the property and c. 90 acres of land. Ganly Walters had been guiding c. €2.75m for the property and c. 157 acres, however this was later changed to c. €2.3m with the number of acres reduced to c. 83. No sale price has been disclosed and contracts have yet to be signed. The Sunday Times, 9th October
Housing Completions: The latest figures from the Department of Housing show that, excluding one-off homes, construction work commenced on 4,154 housing units in the first eight months of 2016. This figure represents a c. 30% increase (980 units) on the 2015 figure of 3,174 for the same period. Once one-off housing units are included, the number of new builds which commenced in the first eight months of 2016 was 7,139. The Irish Independent, 10th October
OTHER
Commercial Market Overview: The latest figures from JLL and Cushman & Wakefield estimate that c. €316m of commercial property investment transactions were completed in Q3 2016, bringing the total for 2016 to c. €3.2bn. The largest transaction in Q3 2016 was the c. €72.5m purchase of Neptune House in Dun Laoghaire by SW3 Capital and Tristan Capital Partners. With a number of transactions nearing completion, JLL and Cushman & Wakefield believe there is every possibility that the total figure for 2016 could exceed €4bn. The Sunday Business Post, 9th October
Tax Legislation: The Irish Independent reports that “hundreds of millions of Euro worth” of property transactions have stalled as investors fear that the government may change the current tax legislation for Irish Collective Asset-management Vehicles (ICAVs) and Qualifying Investor Alternative Investment Funds (QIAIFs). Under current legislation, ICAVs and QIAIFs are fully exempt from taxes on income and profits. However, the government is now understood to be considering introducing a withholding tax on the funds, with the new legislation to be brought in as part of the next Finance Bill. The Irish Independent, 9th October
Topaz Filling Stations: Cushman & Wakefield is guiding c. €5.175m for two filling stations let to Topaz in Meath and Dublin. The first station, Coolfore service station is near Ashbourne, Co. Meath and is guiding over €3.475m. Coolfore offers a net yield of c. 7.91%, with Topaz paying a rent of c. €282k p.a. There are also two showrooms and four workshops on site. The second station is in Kilshane Cross near Finglas, Co. Dublin and has an asking price of over €1.7m. The total rental income is c. €174k p.a., with Topaz contributing c. €126k. The Irish Times, 5th October
Airside Motor Park: An unnamed investor has paid c. €2.5m for a showroom and service station occupied by Citroen Motors at Airside Motor Park in Swords, Co. Dublin. Citroen occupy the c. 21,400 sq. ft. property under a 10-year lease from September 2011, for which the rent is c. €165k p.a.
Annesley Motors: A private investor has paid c. €2m for the former Annesley Motors site on the Ballybough Road in Dublin 3. The 0.69-acre site was on the market through CBRE and it has planning permission for a c. 56,000 sq. ft. mixed-use scheme. The Irish Times, 5th October
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