12th October (Issue 318)

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.




Molesworth Place, Dublin 2 The home of Dublin restaurant One Pico has come back on the market at a lower asking price of €1.5 million, ahead of an auction next week. The property, located at 5 and 6 Molesworth Place and 1 Schoolhouse Lane, was first offered for sale, with the restaurant in place as tenant, last October for €1.95 million. The classic French restaurant has resided at the address for c. 20 years. The property comprises a prominent two-storey corner site and extends to c. 2,190 sq. ft. net internal area and c. 2,990 sq. ft. gross internal area. The ground floor includes the main restaurant area, reception, kitchen and stores. The first floor comprises a private dining room (The Polo Room), an office, staff changing and WC facilities together with customer WCs. The property offers potential for mixed use development. Frossway Ltd, trading as One Pico Restaurant, is over-holding on an occupational FRI lease which expired in 2008 with rent of €110,000 a year. The lease covers number 4A Molesworth Place, the freehold interest of which is not included in the sale. The net rent receivable for 5 and 6 Molesworth Place and 1D Schoolhouse Lane is €99,000 a year, indicating a net initial yield of c. 6%. The Irish Times, 6th October

Dorset Street, Dublin 1 JLL last week advised it had completed the sale of the newly built, 163-guest room Big Tree Dorset Street Hotel in Dublin city centre on behalf of Dublin Loft Company for an undisclosed sum. Located close to Croke Park Stadium, the full-service, lifestyle hotel is contained within a 0.45-acre site and includes a large ground floor restaurant and bar, the traditional Big Tree Irish pub and an expansive rear terrace. The property was sold to a joint venture of MM Capital and RoundShield. The Business Post, 10th October



Otter House, Naas Road Offers in excess of €6 million are being invited for a landmark property on Dublin’s Naas Road. BNP Paribas Real Estate is handling the sale of Otter House, situated on the south side of the N7 Naas Road, just 300m from the intersection with the M50 Motorway and 8km from the city centre. The property is set to offer exciting redevelopment potential in the future, but in the short term provides investors with a stable investment return. It comprises a modern four-storey office building in use as showrooms and offices, together with a modern warehouse unit situated to the rear. Otter House is fully let and producing rent of €512,548 a year. Modern Plant, which has been in occupation for 45 years, occupies the entire showroom, mezzanine office and warehouse on ground floor on a new five-year lease from October 1st. The passing rent is €281,368 a year. The upper floor offices are let to Entain trading as Ladbrokes, Campion Insurances and FKM Engineering, with a combined passing rent of €231,180 a year. The property has frontage on to the Naas Road of about 51m and about 16m to Robinhood Road at the rear and the site is unusual in having dual access. The combined warehouse and office building extends to 47,062 sq. ft. on a triangular shaped site extending to c. 1.27 hectare (3.15 acres), of which the existing buildings only occupy c. 23%. The Irish Times, 6th October



Bank of Ireland branches, Ireland The Layden Group has brought to the market a Bank of Ireland branch in Ballina, Co Mayo, quoting €3.6 million, and a former branch in Whitehall, Dublin 9, quoting €1.1 million. The Whitehall branch, at 85-87 Swords Road, remains let to the bank until June 2022 at a rent of €112,000 a year. It comprises a two-storey double-fronted terraced building laid out as a banking hall on the ground floor (2,206 sq. ft.) with offices and a canteen (1,206 sq. ft.) on the first floor. The Ballina property is let to Bank of Ireland until 2032 on a 25-year full repairing and insuring lease from July 1st 2007, at a current rent of €216,081 a year, indicating a yield of 6%. The lease is subject to five yearly upward only rent reviews. It is a three-storey period building fronting onto Pearse Street, with a modern single storey extension to the rear. The Irish Times, 6th October

Churchtown, South Co Dublin An office development with a very attractive potential yield of 13.5% and capital value of c. €125 sq. ft. has been offered for sale in south Co Dublin. Block B of Nutgrove Office Park, Churchtown, comes to the market after a light refurbishment with a guide price of €5 million – some €2 million short of the price asked in June 2018, when it was offered for sale by another agent. Block B comprises three buildings that are available with vacant possession and jointly extend to c. 40,000 sq. ft. The buildings come with 45 surface car park spaces. Two of the three buildings, B2 and B3, which interconnect with block B1, provide a self-contained building of c. 11,000 sq. ft. Blocks B2 and B3 provide “plug and play” office space whereas Block 1 is complete to shell and core. According to the selling agents, with a little further work an overall rent in the order of €750,000 per annum is achievable, representing a net initial yield of more than 13.5%. The Irish Times, 6th October

Clonskeagh, Dublin 4 Trimleston House 1A and 1B, an interconnecting three-storey office building at Beech Hill Office Campus, Dublin 4 is being offered to the market for €7.25 million (c. €222 per sq. ft). Extending to c. 32,690 sq. ft., the property is let to Start Mortgages until January 15th, 2026. Block 1A comprises c. 19,640 sq. ft. of office accommodation over three floors and comes with the benefit of 54 car parking spaces. With an existing rent roll of c. €344,000 (€14.75 per sq. ft.) a year, Savills believes the building is “significantly under-rented” and thus presents a “unique opportunity to capture reversionary potential immediately with a rent review outstanding from January 2021”. Block 1B provides c. 13,050 sq. ft. of flexible, vacant space suitable for multiple occupation which will benefit from some modest refurbishment work. Block 1B benefits from 35 car parking spaces along with a shared cycle storage facility in place for both blocks. Following a potential refurbishment of Block B, and a settlement of the outstanding Start Mortgages rent review, Savills expects a net investment return in the region of 8.5% after standard purchaser’s costs. The Irish Times, 6th October

Earlsfort Terrace, Dublin 2 Iput has acquired a building adjacent to the Deloitte House property it bought on Earlsfort Terrace in Dublin two years ago, with a view to redeveloping the entire site. The company is understood to have paid c. €20 million for the red-brick, five-storey 1970s building, called Garryard House at 25 Earlsfort Terrace, from the McGarrell Reilly Group. The property, extending to 16,000 sq. ft., is next door to Deloitte House, a 65,000 sq. ft. building on the corner of Hatch Street, overlooking the National Concert Hall. Iput acquired Deloitte House in 2018 for c. €60 million in an asset-swap deal with the property’s then owners, State Street Global Advisors (SSGA). While SSGA and the McGarrell Reilly Group had previously joined forces and secured planning permission for a new 190,000 sq. ft. development on the corner plot, to more than double its current floor space, it is understood that Iput now plans to seek revised planning. The Irish Times, 8th October

Office Sector, Dublin Office letting activity experienced a considerable boost in Q3, with c. 425,174 sq. ft. of space taken, 60% more than in Q2. Dublin 2, the traditional core of the office market is set to benefit the most, with c. 50% of forecast total take-up for 2021 to be in Dublin 2. Buildings in the area have, on average, accounted for just over a third (35%) of total annual space let in the overall market over the last ten years. Two large deals already agreed may close by the end of the year. Between them, KPMG’s agreement to take Harcourt Square for its new headquarters and TikTok’s agreement to occupy the Sorting Office equate to c. 500,000 sq. ft. Some 73% of the space completed in the office market in Q3 is in Dublin 2, with the completion of just over 134,549 sq. ft. at Fitzwilliam 28, which is pre-let to Slack, the largest building to complete in the market this quarter. An additional 145,000 sq. ft. at Fitzwilliam 27 is due to complete by year end. TMT and professional services companies took 51% of the total space let in Q3, once again in line with the longer-term trend in the market. Such recovery is not without its challenges, with inflationary pressures of the most immediate concern. Both labour shortages (leading to higher wages) and price increases on materials are having an impact on the construction sector and on overall commercial building costs, which is expected to feed into upward pressure on rental levels in the office market in 2022 and 2023. The removal of the requirement to work from home from October 22 will allow companies to implement their hybrid or preferred working models. The Business Post, 10th October

Drogheda, Co Louth QRE Real Estate Advisers has been appointed to handle the sale of Boyne Tower, a high-profile modern office building in Drogheda, Co Louth, guiding in excess of €1.35 million. The property is a five-storey over basement building extending to c. 23,497 sq. ft. GIA. The offices are fitted out to a Grade A standard, with two retail units at ground floor level presented in shell and core specification. There are flexible open plan floor plates with floor-to-ceiling heights of c. 2.8 metres and full height windows with views of the river Boyne. Boyne Tower is positioned adjacent to the river, in central Drogheda, c. 2.5 km from junctions 9 and 10 on the M1 motorway and c. 25 minutes from Dublin Airport. The building is let to Outsource Support and IT Governance, with a mast let to Three Ireland, at a total passing rent of €87,340 per annum. There is an opportunity to increase the rental income to over €200,000 per annum upon letting of c. 11,818 sq. ft. of vacant office and retail space. The property represents a genuine asset management opportunity, with the potential to generate a yield of c. 13.5% upon leasing of the vacant space. The Business Post, 10th October

North Docklands, Dublin 1 Hibernia REIT plc has sold two offices in Dublin’s north docklands to German investor Commerz Real AG for €152.3m. In July 2014 Hibernia purchased the buildings, now known as One and Two Dockland Central, for €90.8m and invested a further €21m in refurbishing and expanding the accommodation before reletting it. The €152.3m sale price gives Hibernia an ungeared return of more than 12%, marginally ahead of its book value. It also reflects a capital value of €1,032 per sq. ft. for offices. Net sale proceeds are to be reinvested in Hibernia’s substantial near-term development pipeline such as Clanwilliam Court which is expected to commence in early 2022 and Harcourt Square which is expected to commence in 2023. Commerz Real is buying the offices for its open-ended real estate fund, hausInvest, and will receive a net initial yield of 4.75%. The property was constructed in 2000 and is situated on Guild Street in Dublin’s north docks. It consists of 147,500 sq. ft. of office accommodation across two adjoining blocks with parking spaces for 144 cars and 167 bikes. It is fully let to a range of occupiers, primarily from the technology, banking and capital markets and state agency sectors, with contracted rental income of €8m per annum or an average office rent of €51 per sq. ft. Leases average two years to next rent review and have more than seven years’ term certain remaining. The Irish Independent, 7th October

Dublin Airport The Dublin Airport Authority (DAA) has completed phase 1 of Dublin Airport Central located directly opposite Terminal 2. The completion of Two, Dublin Airport Central, a six-storey, 105,002 sq. ft. Grade A office – brings the construction of phase one of Dublin Airport Central to completion. Dublin Airport Central first launched in 2016. Since then, Buildings One and Three have been let to ESBI, Kellogg’s and DAA. Incoming tenants include the Dublin Fingal Chamber of Commerce and a new food and beverage offering called Vivika. Planning has also been obtained at Dublin Airport Central for two additional office buildings (blocks Four and Five – phase two) extending to a combined 250,000 sq. ft. along with a new multi-storey car park. Two, Dublin Airport Central has attained Leed Gold and BER A3 and Platinum Wired Score accreditations, along with Grade A related enhancements. The Business Post, 10th October



Douglas, Cork Site development work has started for a €150m-plus new homes development by PLC developers Cairn, on a valley site on the edge of Cork’s Douglas village, close to a new school being built by BAM. Called Bayly, the 472-units scheme on the Carrigaline Road at Castletreasure is 2015-founded Cairn PLC’s first scheme in Cork, having acquired several sites in Ireland via a €503m Ulster Bank portfolio sale with Lone Star, Project Clear. Cairn PLC got planning approval in October 2019 via a Strategic Housing Development (SHD) application with Meitheal Architects for this Castletreasure site, after an oral hearing looking at some issues such as stormwater management. The planning grant — one of the larger in the Cork area in recent years — is for 234 semi-detached and terraced houses, 160 apartments and 78 duplexes, with 4.4 ha of parkland and amenity space. The Irish Examiner, 6th October

Adamstown, West Dublin Irish housebuilder Quintain has turned the sod on its €500 million urban hub investment in Adamstown, west Dublin, commencing construction on a 279-unit apartment development aimed at the build-to-rent market. UK grocer Tesco has also signed up as an anchor tenant at the development. Called The Crossings, Quintain’s first phase of development at the new urban centre in Adamstown will include 279 apartments and more than 91,000 sq. ft. of space to house two major supermarkets, 20 retail units and five restaurant outlets, along with a multi-storey car park. Construction of the apartments has a completion date of mid-2023. Planning permission for a second phase of 185 apartments has been granted and further phases are planned for submission in late 2021 and early 2022. On the retail side, Tesco has signed a lease for a 40,000 sq. ft. store, which is set to open in January 2023, with a second leading supermarket anchor store set to open at the same time. The Irish Times, 6th October

Brennanstown Road, Cabineetly A site on Brennanstown Road, in the south Dublin suburb of Cabinteely, has come to the market seeking €8.5 million. The 3.15 acre (c. €2.7m per acre) site is currently occupied by three houses, positioned on large individual plots. According to selling agent Savills, the residentially zoned site benefits from a feasibility study, which could provide a developer with a prime residential development in a much sought-after location. The study suggests the site could accommodate 122 apartments laid out across four blocks, to provide a balanced and contemporary scheme all centred around a central courtyard and green area. The proposed blocks will provide a mix of units, with two-beds accounting for c. 60% of the proposed development. The Irish Times, 6th October

Marianella Development, South Dublin The listed housebuilder Cairn Homes has agreed to sell the last phase of its upmarket Marianella development in Dublin 6 to Hines European Core Fund for just over €60 million. The 107 apartments are being sold as a build to rent or private rented sector (PRS) investment. Cairn has previously marketed Marianella to owner occupiers and has sold 230 homes at the site to individual purchasers. It first signalled a move to PRS for the last phase when it sought a change of planning from 24 houses to 107 apartments in 2018. The yield on the investment is estimated at below 4%. At an average cost over €600,000, the apartments will be pitched at the high end of the market. Cairn purchased the former Redemptorist monastery for €42 million from the religious order in 2015, outbidding eight rival developers. The first two phases of the development were largely sold to downtraders from large houses in the area. Cairn’s focus is first-time buyers. It has sold over 4,900 new homes, including 3,100 starter homes since 2016. The Sunday Times, 11th October


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 excess of €3m, and has lent over €200m to clients since April 2015.

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

If you would like to discuss how Origin Capital can help with your funding requirements, please contact us on 01 662 9264.