12th December (Issue 427)

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.



Ballycoolin, Dublin 15 A 6.26-acre industrial infill site in the well-established Northwest Logistics Park, Ballycoolin is being offered for sale, guiding €4m (approx. €639k per acre). It is zoned ‘General Employment’ within the Fingal County Council Development Plan 2023-2029 to “provide opportunities for general enterprise and employment”. Regular in shape, it is bounded by Northwest Logistics Park estate road to the north which provides site access, and Kilshane Way to the south. The surrounding area is home to notable occupiers which include Amazon, Rhenus Logistics, DSV, DB Shenker, Renault Trucks and many more. The Irish Independent, 7th December



St Patrick’s Street, Cork A reopening of Cork’s iconic Roches Stores/Debenhams large department store building is being slated for the middle of next year by its new Irish owners, Intersport Elverys, with plans for a hotel of up to 180 bedrooms towards the rear of the 1.6-acre city centre site. The Co Mayo-based sports and leisure wear company will occupy the front centre portion of the large premises. In advance of the opening, earmarked for Q2 2024 and taking as much as 40,000 sq. ft for its own presence, the company is meeting with Cork City Council this side of Christmas to outline its wider plans for the balance of the 160,000 sq. ft property which it acquired earlier this year in an approx. €12m purchase via Cushman & Wakefield, acting for Debenhams receivers. The Irish Examiner, 6th December



Camden Row, Dublin 8 ORHRE Camden Row Limited has secured planning approval for a 195-bed hotel on Camden Row in Dublin’s city centre. Dublin City Council last week granted permission to develop a seven-storey hotel at the site, set to include a gallery, restaurant and garden. The development will involve the demolition of the existing four-storey office block which is bound to the west by Technological University Dublin’s Focas campus and adjacent to St Kevin’s Park. The building was purchased for a reported €9m in January. Discussions are under way to decide an operator for the site, which is intended to be a four-star hotel. Construction is due to begin in the third quarter of 2024 and conclude by the end of 2026. The Sunday Times, 10th December

Kenmare, Co Kerry A local man with a background in hospitality is understood to be the preferred bidder in advanced talks around the sale of the Brennan brothers Lansdowne Hotel in Kenmare. The sale is expected to close before Christmas. The Brennan brothers are understood to be happy with the choice of preferred bidder, following interest in the hotel from local, national and international parties. The Irish Examiner, 7th December

Travelodge Accounts A Travelodge firm recorded a pretax profit of €8.65m from operating a Dublin hotel exclusively for International Protection (IP) applicants last year. Pumkinspice Ltd secured a contract in early 2022 from the State to house IP applicants at its newly constructed 393-room hotel on Townsend Street in Dublin 2. The directors say “the hotel secured a State contract and traded exclusively under this contract in 2022”. New accounts for Pumkinspice Ltd show that in its first year to trade, the hotel firm recorded revenues of €18.54m last year from the State contracts. Giving an insight into the cost of constructing hotels in the capital, Pumpkinspice directors said the firm’s capital costs totalled €74.6m at the end of 2021, just over two weeks before the hotel opened on January 17th, 2022. The company’s EBITDA totalled €12.15m for 2022. The company continued with the State contract until April of this year when it opened to trade as a hotel with the public. The company recorded a post-tax profit of €8.25m for 2022 after incurring a corporation tax charge of €405k. The Irish Times, 8th December

Drumcondra, Dublin 9 Jay Bourke, the well-known publican and restaurateur, is planning to reopen the landmark Quinn’s pub in Drumcondra. Closed since January 2020, Quinn’s was saved from demolition after planning authorities ruled last year that replacing it with a five-storey apartment block would “result in the loss of a historic Victorian building and would detract from the built heritage of the area”. The businessman regards Quinn’s as a “great opportunity”, and plans to reopen its nightclub as he believes there is a latent demand for more late-night venues in Dublin. Based at 42 to 44 Drumcondra Road, the pub was once owned by the ex-billionaire Sean Quinn. The three-storey-over-basement property was eventually bought by Discipulo Developments, registered in Cork. After planning permission was refused by Dublin City Council, Discipulo put forward a revised scheme and lodged an appeal, arguing that a conservation officer’s rationale for keeping the Quinn’s building “appears to be based on its significance to GAA fans, which is a regrettable priority amid a national housing crisis”. The Irish Independent, 9th December

Hospitality Sector Irish hotel transaction volumes are expected to be approx. €600m for year-end 2023. This is being driven primarily by the recent Dean Hotel Group/Press Up portfolio sale at a reported €350m, which is expected to complete in the coming weeks. The balance of activity comprised five Dublin hotel sales, with a combined value of approx. €120m, and 11 hotel transactions outside of Dublin for a further €140m. The Irish hotel market has also enjoyed strong trading conditions during 2023 with occupancy levels, as of year-to-date October, trending in Dublin at 84% and Cork at 79.8%. RevPAR also achieved record levels with Dublin reaching €152 and Cork at €124. The sector also had to contend with the many challenges, experienced by all businesses, in particular higher interest rates, increased VAT rate from 9% to 13.5%, prolonged expensive utility costs and a shortage of skilled labour. Private investors, high net worths/family offices and hotel groups have dominated transactional activity in the Irish market this year with institutional and private equity groups less active. The Irish Times, 6th December

Licensed Property Sector The Dublin licensed property market throughout 2023 was somewhat subdued when compared with the sales activity of the two previous years. The impact of rising interest rates, challenging debt-market conditions, substantial overhead increases and the shortage of skilled staff all took their toll. In 2023, just 17 licensed premises changed hands with a capital value of €31.8m. This compares with 30 pubs changing hands in 2022 with a capital value of approx. €97m, representing a 67% decline in the value of activity and a 43% drop in the number of deals. The first quarter of 2023 saw the completion of several pub sales which had been launched to the market in the third and final quarters of 2022. The trend of off-market deals, which was a feature of the market during 2022, continued with 4 Dame Lane being sold for approx. €5m, the highest price paid for a pub in Dublin this year. The final quarter of 2023 saw several pubs changing hands ahead of the busy Christmas trading period. A key feature of these sales was that they were acquired by long-term publican families. The Irish Times, 6th December



St Stephen’s Green, Dublin 2 Grafter, the serviced office associate of Oakmount property group, has opened its largest and most prestigiously located premises at Smyth House at 6-7 St Stephen’s Green. Since it saw its first occupier last week, already Grafter has received bookings for 60% of Smyth House’s office space and they include bookings from three companies in the tech, recruitment and legal sectors. Rates range from €30 per day or €250 per month per desk for co-workers and up to €900 per month per desk for companies requiring a private room. The Business Post, 5th December

Office Sector 2023 was a difficult year for the Dublin office market. Just 1.3-1.5m sq. ft will likely transact in total this year, roughly half of the 2.6m sq. ft that signed in 2022. There was strong demand from the professional services, finance and State sectors. The technology, media & entertainment, and telecommunications sector, however, was a more mixed picture – smaller companies were active, but the larger names were particularly impacted by the cyclical and structural headwinds, contributing significantly to the additional 1.3m sq. ft that was added to the subletting or “grey market”. When combined with the 1.1m sq. ft of speculative new-build space that was delivered, the vacancy rate is now approaching the 15% mark, up from 10.5% since the end of last year. Cautious demand at a time of increased supply has seen prime rents slip back from the €70.00 per sq. ft observed at the end of 2022 to €62.50-€65.00 per sq. ft currently. Enhanced incentives and rent-free terms however are maintaining a floor under prime rents close to this level. The Irish Times, 6th December



Maynooth, Co Kildare The former co-owners of Carton House golf hotel have withdrawn their planning application for its proposed Carton Care Village complex on lands at Carton Demesne near Maynooth. In October, Carton Demesne Developments Ltd lodged plans for a three-storey 92-bedroom care home and two two-storey sheltered accommodation buildings comprising 40 independent living units. The firm is controlled by the Mallaghan family. The family firm’s proposed care facility, to be located within the walled gardens to the northeast of the house, has encountered widespread local opposition, while the Department of Housing also voiced “grave concerns” over the proposal. Kildare County Council was due to decide on the application on Tuesday, December 12th. However, ahead of the decision, in a letter on behalf of the applicants, BMA Planning has withdrawn the nursing home planning application. The Irish Times, 7th December



Development Land Sector The combination of high interest rates and uncertainty about investor purchases of apartment developments are causing the development land market to have its quietest year since 2015. According to Sherry FitzGerald, the value of development land transactions was well below average, reaching €82m in the third quarter of this year and was relatively unchanged from the second quarter. As a result, the first nine months of the year saw the lowest level of transactions since records began in 2015 to reach €226m and just half that recorded for the same period in 2022. The volume of transactions was also very low with only 572 land deals closing during the nine-month period, approx. a third lower than the corresponding period in 2022. Building and construction cost inflation has fallen from peak levels with wholesale material costs increased by an annual rate of 2.6% in September which is well below the high of 20.6% seen in July 2022. With expectations that interest rates have peaked and may fall, both of these cost factors together may encourage more developers back into the market. The Irish Independent, 7th December

Internal Spending Controls A recently published audit carried out by the Department of Housing found that a significant number of contracts across all departments at the country’s largest local authority were not compliant with procurement guidelines. It found that Dublin City Council had spent above and beyond what it had originally forecast for housing, engineering, infrastructure, and transport projects in the capital. The council has now moved to urgently address overspends on its projects by requiring an appraisal at each stage of construction to ensure that costings are sound and within budget. Furthermore, any substantial cost increases now need to be approved internally through a cost adjustment process “which requires the project sponsor to justify the cost increase,” a spokeswoman for the council said. In one instance, the 900 metre-long main street for the Belmayne development in North Dublin ended up costing the council €11.9m – 61% over the original tender price. The Business Post, 10th December

Society of Chartered Surveyors Ireland (SCSI) Report The average cost of building a new three-bed home in Ireland has increased to just under €400k this year, a new report has found. The ‘2023 real cost of new housing delivery’ report published by the SCSI shows that ongoing inflation in construction materials, wages and energy has driven the cost of housing construction to record highs. In the Greater Dublin Area, the cost of building a three-bed semi-detached home has risen to stand at a record €461k. The new SCSI report shows that the cost of building a three-bed home in Dublin is now more than 20% higher than the cost to build the same house three years ago and approx. 40% higher since the surveyors body published its first housing costs report in 2016. The SCSI found that the cheapest area for housing delivery is the Northwest region, where the cost of building a three bed home stands at €354k. The surveyors body said the main drivers of construction cost inflation over the last three years were so-called hard costs such as bricks and mortar (up 27%), while soft costs such as land, development levies, fees, vat, profit margins increased 21% in the period. The Business Post, 7th December

Planning permissions granted for apartments more than doubled in the third quarter, according to the latest planning data. The CSO figures show planning permissions were granted for 4,803 apartment units between July and September, which was 105% up on the same quarter last year. Dublin accounted for 64% of apartment planning permissions, with Dublin City Council accounting for approx. half. Overall the CSO figures show there was an annual increase of more than 43% in the total number of dwelling units approved across the State in the third quarter at 9,662 units compared with 6,743 units in the same quarter last year. An annual decrease of 23% was recorded in the second quarter of 2023. The number of dwelling units granted during the third quarter was almost evenly split between houses (4,859) and apartments (4,803). For the nine-month period of January to September this year there was an overall growth of 13% in the total number of dwelling units approved when compared with the same period in 2022. There was an annual rise of 32% in multi-development houses receiving planning permission in the third quarter compared with an annual decrease of 6% in the previous quarter. The Irish Times, 7th December

Fire Safety Defect Funding Minister for Housing Darragh O’Brien has announced funding for interim fire safety measures to assist owners of defective apartments and duplexes in advance of a more comprehensive State support scheme being finalised. Earlier this year, the minister received Cabinet approval for a scheme to address historic fire safety issues and other defects in apartments constructed between 1991 and 2013 worth up to €2.5bn. However, given there is estimated to be up to 100k affected buildings, a code of practice for remediating the defects recommended the implementation of interim measures in the short term. The interim measures scheme, which opened for applications on Monday, will be administered by the Housing Agency on a nationwide basis. The scheme will provide for the full funding of interim measures in order to provide an acceptable level of fire safety in buildings, pending completion of the full remedial works. Full remedial works will be funded under a statutory scheme that will be legislated for next year. Work is already underway in the Department on drafting this legislation. The Irish Times, 11th December

Cost-Rental and Social Housing Approx. 3,000 cost-rental and social homes are to be built at sites across Dublin by housing charity Respond in the largest mixed-tenure housing programme undertaken since the property crash more than a decade ago. Just under half the homes will be cost-rental housing while the remaining homes will be allocated to people on the social housing waiting lists of the Dublin local authorities in the areas where the homes will be built. The first tranches of homes, just over 1,800 of the 2,906 total, will be built at four sites in the north and west of the city, in the Dublin City, Fingal and South Dubin County Council areas. The largest development will be in the Fingal area at Charlestown, north of Finglas village, where 590 apartments are to be built at Pipers Square, of which 284 will be cost-rental homes with 306 social homes. All of the four developments will be on-site in 2024, Respond said, with locations for the remaining 1,099 homes announced in the new year. The Irish Times, 12th December



BNP Paribas Real Estate Ireland Construction Report Activity in the construction sector fell for the fifth consecutive month in November, according to new analysis by BNP Paribas, with housing output decreasing to the largest extent since April. The headline BNP Paribas Real Estate Ireland Construction Total Activity Index – which tracks changes in the total volume of construction activity compared with one month previously – slipped further away from the no-change 50.0 mark last month, posting 44.5. This was down 6% MoM, pointing to the most marked reduction in construction activity in 2023 so far. A slowdown in the economy, the completion of projects and delays in decision making at client level were identified as factors leading activity to fall. House building declined a further 3.8% MoM, according to the data. Figures from the Department of Housing show construction commenced on 2,624 homes in October, up 42.5% on the same month last year. The commercial property sector, meanwhile, fell back into a state of contraction after returning to growth in October. The Business Post, 11th December

Dublin Airport The owners of the 260-acre block of land between the runways at Dublin Airport are expected to make a decision regarding its future early in the New Year. The block of land remains on the market for sale but it’s understood a decision on the site’s future will be made by the landowners in January. Aviation tycoon Ulick McEvaddy and his brother Des, along with Seán Fox and Brendan and Orla O’Donoghue, were considering applying for planning permission for a third terminal on the site by the end of this year. The consortium are hoping to sell the block of land, which has been described as a strategically located asset, for €210m or more. A number of bids have already been received for the land, including a €75m offer from DAA that has been rejected. The Business Post, 11th December

Newbridge, Co Kildare An Bord Pleanála has given the green light to drinks giant Diageo to construct its planned €200m brewery for Newbridge. The new facility, which will operate 24 hours a day, will brew lager and ales including Rockshore, Harp, Hop House 13, Smithwick’s, Kilkenny and Carlsberg. In a statement on Monday, Diageo said that it expects to commence construction work on the project “in early 2024″. The Irish Times, 11th December

Dún Laoghaire, South Co Dublin The refurbishment of Dún Laoghaire Baths, which more than doubled in cost from an initial €8.7m to €18.2m, has been criticised in an audit by the Local Government Audit Service. The statutory audit report on Dún Laoghaire Rathdown County Council’s spending for 2022 also found rates arrears owed to the council increased to €25.3m in the year, up from €21.4m in 2021. The audit further found housing rents owed to the council increased from €5m to €5.4m during the year. Referring to the baths project the audit service report said a “more defined” and “comprehensive” project brief could have “identified unforeseen costs” as “required by the public spending code”. The baths, which date from 1843, closed in 1997, and were the subject of a 17-year campaign by locals to have them refurbished and reopened to the public. After a five-year work programme the baths reopened last December. The audit noted the council secured a grant of €1.1m for the project from the European Regional Development Fund and had “reacted in a timely manner to control the increasing costs by seeking legal advice”. The Irish Times, 12th December

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