12th December (Issue 126)
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.
COMMERCIAL MARKET OVERVIEW
Stamp Duty: A late change to the Finance Bill has been introduced to combat the loophole whereby commercial property sales are avoiding the new 6% stamp duty rate by making the transfer via a company sale, which has a much lower rate of 1%. The new measure is designed to stop people setting up artificial transactions involving the placing of property assets into companies, with the intention of making the transfer via a share sale. The scale and speed of the stamp duty increase faced criticism from the property industry, with claims the targeted revenue of €376m was unlikely to be achieved. The Irish Times, 6th December
LOAN / PORTFOLIO SALES
Mars Capital Securitisation: Mars Capital has completed the securitisation of €517m of mortgages, in its second securitisation of 2017. The portfolio consisted of 2,315 mortgages where the average mortgage balance was €223k, although the individual mortgage balances ranged from €146 to €5.3m. The majority of the mortgages are non-performing, with more than 83% of the mortgages at some stage of the litigation process. Variable rate mortgages account for 62% of the portfolio, with 35% being trackers and 3% being fixed rate. The mortgages securitised were previously acquired by Mars Capital from IBRC and Springboard. The Sunday Business Post, 10th December
RETAIL
Shanahan’s on the Green: One of Dublin’s finest Georgian period houses on St. Stephen’s Green is to be sold on behalf of a receiver for in excess of its €4.5m asking price. No. 19 has been trading as Shanahan’s on the Green since 2000 and is a four-storey over basement building close to St. Stephen’s Green Shopping Centre with an overall floor area of 6,458 sq. ft. The basement, ground and first floors are in restaurant use, the second floor is in office use and the third floor consists of an apartment. The current rent paid by Shanahan’s is €240k p.a., although this is due to rise to €290k p.a. in 2019, under the lease which has c. seven years remaining. The sale attracted significant interest, mainly from wealthy private investors. The Irish Times, 6th December
26 Wicklow Street: A private investor has paid over €2m to acquire a retail unit occupied by JD Sports at 26 Wicklow Street in Dublin city centre. JD Sports is paying a rent of €112k p.a. to occupy 1,915 sq. ft. across three levels, including 527 sq. ft. at street level. The property had been guiding €1.75m when it was initially brought to the market by Savills. The Irish Times, 6th December
OFFICE
Dublin Offices: The Dublin Office sector is undergoing considerable transformation with 26 office blocks being demolished and replaced since 2014. The average age of demolished blocks is c. 40 years compared to an average of 22 years for all office buildings in the capital. One key characteristic of replacement buildings is that they are on average 36% bigger, the demolished blocks average 39,213 sq. ft. compared to replacements averaging 53,475 sq. ft. The redevelopments have been almost exclusively based in the city centre, with 21 projects in Dublin 2 and four in Dublin 4. The vacancy rate for Dublin offices stands at 9.3%, with rents increasing by c. 5% YoY. The Irish Times, 11th December
HOTEL
Knightsbrook Hotel and Golf Resort: Cushman and Wakefield has sold the Knightsbrook Hotel and Golf Resort, a four-star hotel consisting of 131 guest bedrooms, 28 three-bedroom self-catering units and a Christy O’ Connor Jnr designed golf course, located in Trim Co. Meath for €19.5m, €1.5m above guide price. The Irish Times, 4th December
Irish Hotel Update: The Irish Times contains a review of the Irish hotel market, highlighting that Dublin hotels are currently enjoying occupancy rates of 82% and average room rates of €129 per night. According to the chief executive of the Irish Hotels Federation, Tim Fenn, there are now 820 hotels in Ireland, with a total of 57,000 bedrooms. The only new hotel to open in Dublin this year was the Address, a 200-bed four star hotel on Amiens Street, which forms part of the McGettigan Hotel Group. The recent reopening of the Adare Manor resort in Limerick is expected to bring significant tourism to the county. Some of the largest hotel sales in 2017 were; the 261-bed Radisson Galway which sold for €50m, the Mount Wolseley Golf Hotel in Carlow which sold for €14.25m and the Carton House Hotel which recently sold for €57m. It is also anticipated that the Gibson Hotel sale for €87m will complete before year end. The Irish Times, 6th December
Dame Street Hotel: Bridlegrand Shamrock Chambers Ltd has registered a planning application with Dublin City Council which seeks to redevelop an existing building on Dame Street in Dublin city centre into a 39 bedroom, 23,000 sq. ft., six-storey hotel. Bridlegrand is an Irish entity controlled by Gerald Conlan, Jeffrey Carter and Paul Esajan. NAMA Wine Lake, 10th December
Dublin Tourist Facility: Canbe Ltd has registered a planning application with Dublin City Council which seeks permission to convert an office building into a 21-unit “short stay tourist accommodation facility” in Inchicore, west Dublin. Canbe is an Irish entity controlled by the Garry family. NAMA Wine Lake, 10th December
RESIDENTIAL / LAND
Lansdowne Place Apartment: An unbuilt apartment at the new Lansdowne Place luxury apartment complex in Ballsbridge, Dublin 4 has set a record for the highest price ever paid for an apartment in Ireland. The 3,800 sq. ft. penthouse on the site of the former Berkeley Court Hotel recently sold for €6.5m off plans, representing a sales price of c. €1,700 psf. The penthouse features three double bedroom suites, a private terrace facing onto Lansdowne Road, and a large rooftop garden which adds a further 1,900 sq. ft. of open space. The apartment complex will also offer a 24-hour concierge service, for which the annual service charge for penthouse owners will likely exceed €5k. The Irish Times, 7th December
Thornhill House Development: David Doyle, the son of the hotelier PV Doyle, has appealed Dún Laoghaire-Rathdown County Council’s decision to reject his planning application to An Bord Pleanála. Doyle’s application sought to develop 33 apartments and 14 houses on the grounds of Thornhill House, which is located in Mount Merrion in south Dublin. Over 100 objections had been made to the council, with the objections being made by local residents, local TDs and An Taisce. The Sunday Business Post, 10th December
IRES North Circular Road: IRES REIT is seeking to add to its portfolio of c. 2,500 apartments by developing another 61 apartments on North Circular Road in Dublin city centre. To facilitate the development of the six-storey block, a vacant car showroom on the site would be demolished. The Sunday Times, 10th December
CSO Property Prices: The latest figures from the CSO show that Irish residential property prices rose by 0.5% in the month of October 2017, and prices are now up 12.1% YoY. The latest figures show price growth of 11.6% YoY in Dublin, with prices outside of Dublin up 12.8% YoY. On a national basis, prices remain 23.7% below their 2007 peak, despite having risen by 70.2% since the bottom of the market was reached in early 2013. Central Statistics Office, 12th December
Mortgage Arrears: New figures from the Central Bank show that c. 200,000 private dwelling home (PDH) mortgage borrowers sought forbearance from their banks between 2009 and 2016, a figure which is substantially above the previous estimate of c. 120,000. The 200,000 number appears to be relatively evenly split between those who sought short-term and long-term forbearance, with c. 100,000 borrowers seeking each type, although an economist for the Central Bank has advised that there may be some double-counting in the figures. The previous figure of 120,000 appears to have been based on mortgages which have been classified as restructured, with previously elapsed short-term arrangements being excluded. The Irish Independent, 7th December
OTHER
Lyrath Retirement Village: The owners of the Lyrath Estate Hotel in Co. Kilkenny are planning to build a €60m retirement village on the 170-acre estate on which the hotel is situated. The village would consist of 150 two and three-bedroom homes for which the target market would be empty nesters looking to downsize. Xavier McAuliffe and a group of investors paid c. €25m to buy back the estate after he was originally involved in the development of the estate’s hotel over ten years ago. Receivers appointed by Bank of Scotland took control of Lyrath estate in 2012. The Irish Independent, 10th December
Auction Sales: The total value of properties sold at auctions in 2017 could exceed €500m, with 370 lots to be sold across seven auctions before the end of the year. Should all these lots be sold, the total number of properties sold at auctions this year would exceed 2,600. BidX1 has already sold 1,083 lots for a cumulative amount of €218m this year, and the team hope that its December auctions will see total proceeds eclipse the €250m mark. The Irish Independent, 7th December
Iveagh Sports Ground: Trinity College has completed the acquisition of the Iveagh Grounds sports facility in Crumlin, Dublin 12, from Diageo, the owners of Guinness, for €2m. The 17-acre site which includes GAA, rugby, bowls, tennis and hockey pitches, is one of the largest sporting grounds close to Dublin city centre. The relatively low acquisition price is believed to be a fraction of its development value, due to the fact that conditions of the sale restrict its future use to sport. Trinity is likely to spend significant additional funds developing new facilities on the site. The sale is understood to have included a write-off of a loan connected with the facility’s clubhouse and bar. The Irish Times, 6th December
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