12th July (Issue 54)
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 SALES
Project Jewel: Hammerson and Allianz Real Estate have jointly taken possession of Dundrum Town Centre and three development sites – an undeveloped site at Dundrum Town Centre in Dundrum village, a 16-acre site beside the Pavilions in Swords and Dublin Central and a five-acre plot bounded by O’Connell Street and Henry Street, Dublin 1. The assets were acquired via the €1.85bn NAMA Project Jewel portfolio sale in September 2015. It is reported several retailers have already entered discussions with the new owners about increasing the size of their stores in Dundrum Town Centre. The Irish Times, 9th & 11th July and NAMA Wine Lake, 10th July 2016
Project Tolka: The Sunday Independent reports that negotiations are at an advanced stage in relation to NAMA’s proposed disposal of Project Tolka (par value of €1.5bn), and that it is expected to be marketed for sale in September 2016. Project Tolka comprises of loans linked to property developers and investors Paddy Kelly, John Flynn and the Dublin-based McCormack family. The portfolio’s main investment properties are the Burlington Plaza office complex on Dublin’s Burlington Road, Belfield Office Park and the former Children’s Hospital on Harcourt Street in Dublin city centre. The Sunday Independent, 10th July
Horizon Mall: Capital Assets has acquired the loans associated with Limerick’s Horizon Mall site from Danske Bank. It is reported that the par value of the loans was c. €41m. The purchase price has not been reported. The Sunday Business Post, 10th July
RETAIL
Brasserie Sixty6: The freehold interests in Brasserie Sixty6 restaurant on 66/67 South Great George’s Street, Dublin 2 (4,911 sq. ft.) have been acquired by a private investor for €2.6m (€529 psf). The sale equates to an initial yield of 7.2% based on the contracted rent of €195k p.a. and the weighted average unexpired lease term (WAULT) is c. 15 years. There are two 35 year leases on the premises, both of which expire in 2031. The Irish Times, 6th July
50 Grafton Street: Irish Life has acquired no. 50 Grafton Street, which is currently vacant having been previously occupied by Three Ireland with 7.5 years remaining on the lease. The acquisition means that Irish Life now owns four premises in a row on Grafton Street (nos. 47 – 50), in addition to nos. 7-11, 57-58 and 85-86. The rent roll from nos. 47 – 50 is c. €1.1m and it is believed that the properties could be combined into one or two large outlets to attract big name international traders and maximise returns in the future. The Irish Times, 6th July
Dún Laoghaire Shopping Centre: Coltard has been granted planning permission by Dún Laoghaire-Rathdown County Council for a c. €10m redevelopment of the Dún Laoghaire Shopping Centre (currently 183,000 sq. ft. with a rent roll of c. €2m). The redevelopment is due to be completed by the end of Q1 2017 and includes two additional large anchor stores fronting on to the town’s Marine Road (19,600 sq. ft.) and George’s Street (35,100 sq. ft.). The Irish Times, 11th July
OFFICE
St. Stephen’s Green: IPB Insurance is believed to have acquired Standard Life’s Dublin offices (26,591 sq. ft. office accommodation in addition to 25 car parking spaces) on St Stephen’s Green for €26.825m – 7.3% in excess of the €25m guide price. The initial yield is expected to be 4.7% after a rent review takes place in September, as the current rent of €650k p.a. (€22.11 psf) may increase to c. €50 psf, alongside increased car parking space rental (from €2.5k to c. €4k per space). The offices have been owned and occupied by Standard Life for the past 30 years. However, the company provided an undertaking that it will not seek renewal of its lease on expiry in 5.5 years, enabling the new owner to maximise returns by refurbishing and reletting. The Irish Times, 6th July
Riverview House: TWM is seeking offers in excess of €5.47m for a 40,000 sq. ft. office building in Carrick on Shannon, Co. Leitrim. Riverview House was purpose built in 2005 and is rented by the Department of Family and Social Affairs for €600k p.a. The guide price offers an initial yield of 10.5% with 10 years remaining in the lease. The Irish Times, 6th July
Project Wave: Planning permission for a c. €46m office development on North Wall Quay, Dublin 1 has been granted. This relates to Block A (323,000 sq. ft.) of the Project Wave development by Oakley Holdings and the Ballymore Group, and works are expected to commence in Q4 2016 with construction taking c. 20 months. In addition, the main works on the c. €111m development of Block D in the scheme are commencing following completion of the ground, basement and piling works. The Sunday Business Post, 10th July
4–5 Trinity Street: Savills is guiding €1.725m (€454 psf) for a mixed use retail and office building on 4-5 Trinity Street, Dublin 2. The 3,800 sq. ft. fully occupied four-storey over basement period property has passing rent of €110k p.a. with estate agents Douglas Newman Good occupying the basement and ground floor on a new 20-year lease for €80k p.a. The three upper floors are rented as offices by StoryToys for €30k p.a. (€13 psf) with its lease expiring in less than two years. The selling agent expects the property to provide an initial yield of 6.1%, with the prospect of increased rental income in the short term when the office lease ends. The Irish Times, 6th July
Ormond Quays: Fenergo, an Irish fintech company employing 250 staff in Dublin, is relocating from Ormond House on Dublin quays to the larger Castleforbes House (20,000 sq. ft.) in the northside docklands. The rent is reported to be c. €26 psf. The Irish Times, 6th July
HOTEL
Days Inn Hotel: Wellington Hospitality Limited has applied to Dublin City Council to extend the Days Inn Hotel in Rathmines by c. 17,500 sq. ft. from 66 to 106 bedrooms. NAMA Wine Lake also reports that it is projected that there will be an additional 5,500 hotel bedrooms in Dublin by 2019. There are presently c. 25 live projects in Dublin city centre comprising of both new hotels and extensions. NAMA Wine Lake, 10th July 2016
RESIDENTIAL / LAND
Receivership Portfolio Sale: Kelly Walsh, on the instruction of receiver Tom Kavanagh of Deloitte, is guiding €7m for a portfolio of sites, unfinished developments and the 34-acre Kill International Equestrian Centre in Kill, Co. Kildare. The portfolio consists of unfinished housing developments at Garristown, north Dublin (18 units), Loughrea, Co. Galway (20 units) and 21 acres at Kilrane in Co. Wexford (which previously had planning permission for 130 houses). The equestrian centre hosted the Special Olympics equestrian events in 2005 and there is potential for residential rezoning on the site in the future. Rutland House, a 2,971 sq. ft. house (in need of refurbishment) in Dún Laoghaire, Co. Dublin is also included in the portfolio and has planning permission for two additional houses on its 0.6-acre grounds. The property was previously offered for sale in Q1 2015 at €1.9m. The Irish Times, 6th July
Southeast Dublin Housing: The Private and Public Housing Supply Report published by Dún Laoghaire-Rathdown County Council (DLR) reports a requirement for 3,300 private and social houses in southeast Dublin to be built each year until 2022 which is 250 houses per year more than the area’s peak housing output in 2007. The report states the average monthly rent for a three-bed house in DLR in June 2016 was €2,291 and the average sales price of a three-bedroom house was €459k for the first five months of 2016.
It is also reported that the Cosgrave Property Group has reached agreement with DLR to provide 124 social housing units (ranging from 1-beds – 3-beds) in Phase 2 of the former Dún Laoghaire golf club. The deal is estimated to be worth €37m. The Irish Times, 6th July
Mount Merrion Development: Balark Investments (controlled by developer Greg Kavanagh) has sought planning permission to demolish a former 21,500 sq. ft. monastery to the rear of Oatlands College, Mount Merrion and build 63 houses on the site comprising of 9 houses, 24 duplex units, and 30 apartments in two blocks. The Irish Independent, 6th July
Cardiff Lane Development: Crekav Landbank Investments Limited (also controlled by Greg Kavanagh) has applied for planning permission to build a 6-storey, mixed use development including 47 apartments off Pearse Street at the existing An Post sorting office at Cardiff Lane. The 2.3-acre site had a face value of €45m and was sold by An Post in 2015. The sale included a requirement to relocate An Post to a similarly sized site within a 2km radius. The Irish Independent, 6th July
Navan Development Site: Joint agents Lisney and Smith Harrington, acting on the instructions of receiver RSM Ireland, are seeking offers in excess of €4m for a 44-acre residential development site in Navan town, Co Meath. The lands are all zoned for residential development in two parts with Part A zoned for immediate development and Part B for future development from 2019. The Sunday Business Post, 10th July
Dublin Luxury Homes: Luxury home sales in Dublin increased by 34% in H1 2016 YOY with 193 sales of houses costing in excess of €1m compared to 137 in H1 2015. The highest ranking sales prices were recorded in Dublin 2, 4 and 6. It was also noted by The Sunday Business Post that the value of nationwide residential transactions increased by 14% to €4.6bn YOY in H1 2016 with Dublin accounting for half of this. The Sunday Business Post, 10th July
House Price Index: The Irish Independent / Real Estate Alliance Average House Price Index for June 2016 shows that the average three-bed semi-detached house now costs €195k in Ireland – an increase of 2.18% since the end of March 2016 and 4.49% YOY. The Index identifies that sales prices have increased by 14% in Roscommon, 8% in Laois, 7% in Kilkenny, 2% in Galway City and 1.4% in Dublin city centre. There were no increases in Cork City or north Co. Dublin. The Irish Independent, 11th July
OTHER
Royal College of Surgeons (RCS) Development: The RCS is reportedly seeking a €50m loan from the European Investment Bank (EIB) to part-finance the development of their new c. 120,000 sq. ft. property in Dublin city. The property will feature a mix of facilities, such as a surgical and clinical training suite, mock operating theatre, a 540-seat auditorium and a sports hall and fitness area. The total cost of the property is projected at c. €103m, with the RCS hopeful of having the development completed by April 2017. The Irish Independent, 12th July
Grange Castle: US company EdgeConneX is to due build its first data centre in Ireland at Grange Castle, west Dublin, joining existing Microsoft operations on the site. The initial cost is projected at c. €30m for the 61,600 sq. ft. data centre on a 16-acre plot, but this could potentially be expanded to three phases in the future. The Irish Independent, 8th July
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