12th April (Issue 41)

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.




NAMA Portfolios: First round bids are understood to have been submitted for NAMA’s Project Abbey, the c. €700m par value portfolio linked to Pat Doherty. The bidders are believed to have included Apollo, Davidson Kempner and Starwood. The portfolio is expected to sell for c. 45c in the Euro. First round bids for NAMA’s other portfolios on the market, Emerald and Ruby, are anticipated by 20th April. Emerald and Ruby have a combined par value of c. €4.5bn and are expected to close for c. 10c in the Euro. NAMA Wine Lake, 10th April



SV4 Collection: Savills are guiding over €80m for the SV4 Collection, a four asset portfolio which has an annual rent roll of c. €5.38m. The prized asset in the portfolio is the 129,252 sq. ft. Lucan Shopping Centre in west Dublin, which is valued at over €40m. The other assets in the portfolio are Kilbarry Shopping Centre in Waterford (€16m) and SuperValu stores in Rathgar (€12m) and Ranelagh (€12m). Of the €5.38m of annual rent, the Musgrave Group are believed to guarantee c. 68%, largely because SuperValu accounts for 59% of the total rent roll. In total the portfolio comprises 247,031 sq. ft. spread across 37 commercial properties and 12 apartments. Should a buyer not emerge for the entire portfolio, the assets will be sold individually. The Irish Times, 6th April

River Portfolio: QRE Real Estate Advisers is inviting offers of €21.5m for the River Portfolio, which consists of 29 properties with a combined annual rent of c. €1.83m. The most valuable section of the portfolio is 17 retail units situated on the ground floor of the Liffey Street / Bachelor’s Walk apartment complex, which are generating annual rental income of c. €553k. On Cork Street, a 20,000 sq. ft. Lidl store and The Tannery offices produce further rental income of c. €552k. Tetrarch Capital owns the River Portfolio, having previously purchased the assets as part of the €152.5m Ulysses Portfolio. The Irish Times, 6th April



Boland’s Quay: NAMA is to issue the construction tender for the €170m Boland’s Quay development within the next month. The interested parties are expected to include BAM, Sisk and Bennett Construction. NAMA has appointed Savills as receiver over the site and they will also oversee the marketing of the project. Should a contractor be appointed by the end of July and work commences in September, a Q3 2018 completion date should be achievable. The completed development is expected to provide 274,000 sq. ft. of office space, 41 apartments and 15,000 sq. ft. of retail and commercial space. The Irish Times, 6th April



Clarion Hotel Liffey Valley: NAMA looks set to include their stake in the 360-bed Clarion Hotel Liffey Valley in Dublin in the upcoming Emerald and Ruby loan sales. Tax investors own 57% of the rooms in the hotel, while NAMA control 155 bedrooms and the common areas of the hotel, with ACC Bank also controlling a section. In 2011 both NAMA and ACC Bank appointed receivers over their stakes in the hotel. Due to the split ownership of the hotel, the tax investors had previously expected the entire hotel to be sold within the next few months. The situation now looks to have changed as NAMA has included their €30m of loans in the loan sales. The hotel is reported to be trading very profitably and given the strong recovery in the sector, it is believed it could achieve a sales price of up to €70m on the open market. The Sunday Times, 10th April



Dublin City Council Homes: Dublin City Council (DCC) is expected to finalise its plans to develop over 1,300 homes on land it owns in the coming weeks. The homes are to consist of social housing, affordable “starter” homes, “affordable rental” homes and private housing. Starter homes are defined by the government as those costing €300k or less. Following a meeting by councillors in January, it was agreed that 30% of the homes to be developed on DCC’s 74 acres must be social housing. The Irish Times, 12thApril

Mortgage Approvals: Figures from the Banking and Payments Federation Ireland (BPFI) show that for the three month period ending February 2016, the number of mortgages approved fell by 15.1% when compared to the same period a year ago. There were 1,951 mortgages approved during the period, with first time buyers accounting for over 50% of the figure. The value of the mortgages approved in the three month period ending February 2016 was €374m, which was 14.6% lower than the same period twelve months ago. When comparing the February 2016 figures to the February 2015 figures, first time buyers suffered the largest declines. The value of first time buyer approvals fell by 21.8% while the volume of first time buyer approvals fell by 21.7%. Banking & Payments Federation Ireland Mortgage Approvals, February 2016

NAMA 2015 Sales: Last week the Property Price Register announced that 48,438 residential units were transacted in 2015. When analysing the sellers of these units, it has emerged that NAMA accounted for 5,345 (11%) of the units sold. NAMA has advised that 4,783 (89%) of these units were sold to individual buyers, with the remaining 562 units sold on the open market as part of group or portfolio sales. 440 of the 562 units are believed to have been sold in one transaction, when IRES acquired the Tallaght Cross development in Dublin. NAMA Wine Lake, 10th April

Dalkey Site: Savills has set an asking price of over €7m for Dalkey Manor, a six-bedroom property situated on a 2.32 acre site in Dalkey, south Dublin. The site is seen as having strong development potential with the successful bidder expected to demolish Dalkey Manor. Under the zoning for the site, the primary use is residential. Jill Horan of Savills estimates that should Dalkey Manor be demolished, the site could facilitate 52 apartments over two blocks or else 22 three-storey houses. There is currently no planning permission granted for the site. The Irish Times, 6th April

Development Land Sales: New figures from CBRE indicate that there has been a strong start to the year for development land sales, with over €350m worth of transactions completed in Q1 2016. This figure is almost half of the full year figure for 2015, when over €770m of transactions were completed. Transactions completed in Q1 2016 include Knockrabo, Dublin 14 (€25m) and Magee Barracks, Kildare (€8.2m). The outlook for the remainder of 2016 is strong with Cairn Homes having recently agreed to purchase six residential sites in the greater Dublin area for c. €100m. The Irish Times, 6th April

Rental Increase: The CSO figures on private residential rents reveal that the monthly increase for March 2016 was the lowest in two years, at just 0.2%. The increase was also significantly below the January (1.2%) and February (1.1%) growth rates. The annual rate of inflation in the private rental market is now 9.3%, which is the lowest since June 2015. The highest level of annual inflation was achieved in August 2015, at 10.5%. NAMA Wine Lake, 10th April

Ardstone Funding: Ardstone Capital has secured €110m of funding for Ardstone Residential Partners, their newly established residential development fund. The funding was provided by two Irish pension funds and two European institutions. Ardstone hope to develop up to 3,500 homes in Ireland in the next two to five years, with a focus on the Dublin Commuter Belt, Cork and Galway. The fund has already acquired two sites in Kildare and Meath, which are understood to be able to accommodate c. 250 homes in total. The Sunday Business Post, 10th April

Sherry Fitzgerald Analysis: Sherry Fitzgerald has released their Q1 2016 House Price Index, which states that the average property price in Ireland rose by 1.3% in the quarter. Prices in Dublin rose by 0.7%, while outside the capital the increase was 2%. However their chief economist, Marian Finnegan, believes the market is dysfunctional and will get worse before it gets better due to three factors. Firstly, the supply of properties for sale has fallen to its lowest on record, with just 1.4% of private housing available for sale in January 2016. Secondly, there is a mismatch of private investor purchasers and sellers, as 46% of sellers in Q1 2016 were investors, while they only accounted for 19% of all buyers in the period (as more investors exit the market, the number of properties available for rent decreases). Finally, the rate of growth of transactions slowed in 2015, when activity was only up by 10% on the 2014 figures. The Irish Times, 11th April



Commercial Property Transactions: New data from JLL shows that the total value of commercial property transactions completed in Q1 2016 was c. €600m. Of particular interest however is the breakdown of the assets sold. 80% of transactions completed were between €1m and €10m, while transactions outside of Dublin accounted for 44% of the figure. These figures suggest that the private equity funds who purchased Irish assets are now beginning to work through their portfolios. Only two transactions in Q1 2016 were greater than €50m; Whitewater Shopping Centre in Kildare (€180m) and Central Quay in Dublin 2 (€51.3m). In 2015 the total value of commercial property transactions was c. €3bn. The Irish Independent, 6th April

All Hallows College: Dublin City University has agreed to purchase the c. 16.65 acre site of All Hallows College in Drumcondra, north Dublin, in a deal worth €14m. The €14m consists of €10m cash and €4m to facilitate the closure of the existing college. As part of the deal, Dublin City University has agreed to develop a new primary school on the site, which should cater for c. 450 students. The Irish Independent, 9th April



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

Origin Capital funds senior debt transactions in the CRE investment sector, typically in the €3m – €15m range. If you would like to discuss how Origin Capital can help with your funding requirements, please contact us on 01 662 9264.

Origin Capital is a wholly owned subsidiary of LeBruin, a leading provider of corporate finance and debt advisory solutions.