12th January (Issue 28)
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.
OFFICE
Stripe Lease: Stripe, the Irish mobile payments business owned by the Collison brothers from Limerick, signed a lease on Christmas Eve for 45,000 sq. ft. of office space in The One Building on Dublin’s Grand Canal Street. Stripe may only use part of the office space initially, however the office will provide them with room to expand their Irish operations as necessary. A recent fundraising valued the company at $5bn. The Irish Times, 8th January
HOTEL
Portmarnock Hotel: Kennedy Wilson has commenced a c. €5m upgrade of the Portmarnock Hotel and Golf Links, with €1m having already been spent on the golf course. A new spa and gym are to be installed, the main restaurant will be extended and 90 bedrooms will be modernised as part of the revamp. The work is to be completed in multiple stages this year in order to minimise the impact on the business. Kennedy Wilson paid c. €27m to purchase the hotel out of receivership in 2014. The Irish Times, 11th January
Clarion Hotel Sligo: Dalata are close to completing the purchase of the Clarion hotel in Sligo for c. €11m. The four star, 162 bed hotel had been on the market with a guide price of €7m. The hotel was previously owned by a company belonging to developer Tom Coyle, however AIB and KBC had receivers appointed in 2012. Dalata is valued at almost €940m on the Irish Stock Exchange following their purchase of a number of hotels in the past year. The Sunday Times, 10th January
Bow Lane Hotel: Dublin City Council has granted planning permission to Marlin, a British hotel and serviced apartment group, to build a 190 bedroom hotel on Bow Lane in Dublin city centre. The development of the seven storey hotel is expected to cost c. €60m. Marlin hope development work will commence in Spring 2016 with a view to having the hotel open in 2018. Marlin also intend to operate the hotel themselves rather than leasing it to another hotel operator. The Sunday Times, 10th January
Moore Street: An Bord Pleanála has approved a planning application from Kendlebell Mid-West to develop a seven storey, 107 bed hotel in Dublin city centre. The hotel is be constructed on two sites, one on Moore Street and one on Moore Lane, with the hotel also having a separate bar and restaurant. As Moore Street is a key historical site from the 1916 Easter Rising, one of the conditions of the planning approval is that the developer must work with an archaeologist when the hotel is being constructed. The Sunday Independent, 10th January
Hotel Market Review: Figures from Savills show that 2015 was a landmark year for hotel sales, with over €1bn worth of transactions recorded. Savills cited the 14% growth in tourism, 20% RevPar growth in Dublin and the strength of the Dollar and Sterling versus the Euro as key factors driving the strong investor appetite for Irish hotels. 2016 is expected to be a year when hotel development becomes more prominent, especially in Dublin where there is an acute shortage of hotel rooms. The Irish Independent, 7th January
RESIDENTIAL
PTSB Mortgages: Permanent TSB are hoping that the launch of a new mortgage product will make them more competitive in the marketplace. The new product will match Bank of Ireland’s package whereby the Borrower receives 2% of the value of their mortgage back in cash. Permanent TSB will also lower its variable rate by 0.5% for the first year of a mortgage. The offer will be available to new buyers and switchers of existing mortgages. The Irish Independent, 8th January
Crekav Adamstown: Crekav Landbank Investments Ltd has been refused planning permission by An Bord Pleanála to build 74 homes near Adamstown in west Dublin. When rejecting the application, the board cited the fact that too few homes were proposed for the 2.47 hectare site, which they estimate can accommodate at least 124 homes. Crekav had applied for 74 detached, semi-detached and terraced houses on the site, with each home having four bedrooms. With sites of this nature required to deliver 50 homes per hectare, South Dublin County Council did not believe it was appropriate to approve a scheme which would facilitate just 24 homes per hectare. The Irish Times, 7th January
2016 Outlook: The latest report from myhome.ie, undertaken in conjunction with Davy, is estimating national house price growth of up to 5% this year. Price growth in Dublin is expected to continue to lag behind the rest of the country, partly because of the higher price to income multiple in the capital. The average asking price for a three bed semi-detached house in Dublin is currently €275k, over six times the average salary of €45.6k. In comparison, price to income multiples in other areas of the country still range from three to four times the average salary. The Irish Times, 11th January
Home Sales: Figures from The Irish Property Price Register show that over €10.1bn of home purchases were recorded in 2015, the most since 2008. The €10.1bn figure eclipsed the purchases of €9.3bn in 2014 and €6.1bn in 2013 respectively. The strongest increases were recorded outside Dublin, with Limerick registering the largest growth in the number of purchases at 13%. Davy analyst Conall Mac Coille believes the lack of homes development is hindering the number of transactions recorded, with only 12,500 homes estimated to have been built in 2015. The Irish Times, 8th January
OTHER
CBRE NI: According to CBRE, the NI commercial property market is expected to see an increase in activity in 2016 following the return to a more normalised market. Positive factors for the market include the increased availability of debt finance as well as the relative value in the market when compared to the market in the Republic of Ireland, where prices have risen sharply in recent years.
CBRE estimate that the value of commercial properties sold in NI in 2015 was c. GBP£400m, with Fairhill Shopping Centre in Ballymena the most sizeable transaction at £45.8m. Q1 2016 is also expected to be a busy start to the year, with deals such as Bloomfield Shopping Centre (£54m) to be completed. The Irish Times, 6th January
Industrial Market: William Harvey & Co’s review of the industrial and logistics market in 2015 shows that it was an extremely successful year, with the amount of space transacted the highest in 10 years. Over four million sq. ft. of space was transacted in 2015, with sales representing c. 75% of the transacted space. Rents of €7 psf are now being achieved for prime industrial space. Prime yields in Dublin have also contracted to 6% – 6.5%. The Sunday Business Post, 3rd January
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