12th September (Issue 113)
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 / PORTFOLIO SALES
Project Pine: The Sunday Business Post reports that one of AIB’s next loan sales will be Project Pine, a portfolio of non-performing loans secured on assets in Northern Ireland and Britain. No final decision has been reached on the exact assets to be included, but sources estimate that the face value will be between €200m and €300m. Since the loans in the portfolio are non-performing, it is expected to trade at a deep discount to its par value. Sunday Business Post, 10th September
RETAIL
Crampton Buildings: In a sign of the strong recovery in the property market, Ardstone Capital is seeking to dispose of their Crampton Buildings property in Dublin’s Temple Bar for €11.75m, just three years after they acquired the property for c. €8.26m. The three-storey over-basement property, which is on the market through the agents Bannon, generates rental income in excess of €700k p.a, and the weighted average unexpired lease term of the property is over seven years. Three of the tenants, Elephant & Castle (€160k p.a.), Gallagher’s Boxty House (€120k p.a) and Café Nero Ireland (€120k p.a.) generate over 55% of the property’s rental income. The Irish Times, 6th September
Blanchardstown Shopping Centre Expansion: Multi Corporation, the company that has managed Blanchardstown Shopping Centre since August 2016, has lodged a planning application for a c. €40m extension to the centre. The application proposes a 100,000 sq. ft. extension to the Red Mall, and will include a key 40,000 sq. ft. retail unit, in addition to 18 standard units. This application is in addition to a previous application lodged by the same company in May to provide an additional 60,000 sq. ft. of large retail units on the lower and upper central malls, at a cost of c. €15m. If this latest application is approved, 300 permanent jobs will be created in the centre, which already employs c. 5,500 people. Multi Corporation is owned by Blackstone, which acquired Blanchardstown Shopping Centre for c. €945m. The Irish Times, 6th September
HOTEL
Irish Hotel Market: The latest research from Cushman & Wakefield has shown that after a record year in 2016, transaction levels in the hotel market in H1 2017 have returned to a more normalised level. A total of €76.8m was transacted in H1 2017 across 19 hotels, a substantial decline on the corresponding figure of €140m in H1 2016. Of the 19 hotels sold in H1, seven were sold off-market, compared with just two in the same period in 2016. Cushman & Wakefield Irish Industrial Market Review, Q2 2017
RESIDENTIAL / LAND
Housing Supply: New figures from Sherry Fitzgerald show that the number of homes for sale in the State fell to just 25,100 in July, a decrease of 9% YoY. The number of homes for sale nationwide is therefore just 1.3% of total stock. In Dublin there were just 3,900 units for sale, which represents just 0.8% of Dublin’s total private stock. In a normal market, the number of units for sale should equate to c. 5% of total stock. The Irish Times, 12th September
CSO Property Prices: The latest figures from the CSO on property prices show that the national rate of inflation for the year ending July 2017 was 12.3%. Dublin recorded an even higher rate of inflation, at 12.7%. In the year to July, the average price paid for a home nationally was c. €276k, with the average Dublin price at c. €413k. The Irish Times, 12th September
CSO Private Rental Figures: New figures from the CSO show that private residential rents (which are based on the actual prices paid for new tenancies only) increased by 0.4% in August, representing the 63rd consecutive month of positive or flat inflation. Annual inflation is now 7.3%, and the rate of inflation for the past 24 months is 16.7%. NAMA Wine Lake, 10th September
Household Debt: New figures from the Central Bank should that household debt, as a proportion of disposable income, is now 145.2%, its lowest level since the three month period ending September 2004. The figures also show that the ratio fell by 10.2% over the past twelve months, the strongest decrease in the European Union. The Irish Independent, 12th September
Howth Development Sites: Grant Thornton, acting as receiver on behalf of NAMA, is due to bring a valuable development site in Howth, Co. Dublin, to the market in the next three weeks, with a guide price in excess of €30m. The Techrete and Teeling Motors sites extend to 6.58-acres and have planning permission for 200 residential units, six commercial buildings and 487 car parking spaces. The residential element will contain 145 apartments, 51 three- and four-bedroom homes and an additional four houses which will be provided for Traveller accommodation. The site was previously purchased by Ray Grehan for €62m in 2007. The Sunday Times, 10th September
Boland’s Mills Site: The Sunday Business Post reports that several parties have expressed an interest in acquiring the historic mills buildings which form part of the Boland’s Mills site in Dublin’s south docklands. The buildings are expected to cost c. €11m, but it is expected that the purchaser of the buildings will need to spend another c. €10m refurbishing the properties, as they are currently in a shell condition. The rejuvenation of the mills buildings forms part of NAMA’s Boland’s Mills project, which is expected to cost c. €170m. The Sunday Business Post, 10th September
91-94 North Wall Quay: Targeted Investment Opportunities (TIO), a joint venture between Oaktree and Bennett Construction, is seeking to develop a 241-bedroom aparthotel and a nine-storey office block at 91 – 94 North Wall Quay in Dublin’s north docklands. TIO already has planning permission for c. 409,000 sq. ft. of office space on the site, however their new proposal would see the office space reduced to c. 205,000 sq. ft. The Sunday Times, 10th September
Horgan’s Quay Cork: HQ Developments, a joint venture between Clarendon Properties and BAM Ireland, has sought planning permission from Cork City Council for a substantial mixed-use development on Horgan’s Quay in Cork city centre worth c. €160m. The application proposes the development of three six-to-eight storey office blocks which will contain over 400,000 sq. ft. of office space, a 136-bedroom hotel and 237 apartments. The site is owned by CIÉ, who will enter into a c. 300-year lease which will see them receive a certain percentage of the income from the development, estimated at 10% p.a. The Irish Times, 7th September
Dublin Docklands: The NAMA-appointed receiver David Carson of Deloitte, acting on behalf of Crossman Properties Ltd, has applied to Dublin City Council for permission to construct four office buildings on a two-acre site between North Wall Quay and Mayor Street Upper in Dublin’s north docklands. The new buildings, which will be located adjacent to the new Central Bank building, will provide 400,000 sq. ft. of office space. NAMA Wine Lake, 10th September
Local Authority Housing Rejections: Figures from the Housing Agency show that local authorities have recently been offered 1,860 residential units, however only 241 of these have been accepted, indicating that nearly 90% of vacant homes offered are being rejected. Of the 1,860 units offered, 977 were properties repossessed by banks. The Sunday Business Post, 10th September
Saggart Residential Scheme: Greenacre, a joint venture between NAMA and Harcourt Developments, has sought planning permission from An Bord Pleanála for 459 houses and 67 apartments on a site in Saggart in south-west Dublin. The application was filed on the 30th of August under the new fast-track planning system, which aims to reduce the overall application timeframe to 25 weeks. The Irish Independent, 10th September
Dublin Commuter Belt: A new report from MyHome.ie has shown that a lack of affordable homes in Dublin has led to a substantial increase in the number of residential properties being purchased in the Dublin commuter belt. The total value of the homes acquired in Meath in H1 2017 was c. €230m, a c. €74m (47%) increase when compared to H1 2016. The cumulative value of homes acquired in Westmeath rose by 29% to €64.5m, with Louth recording a c. 27% increase to €105m. Dublin saw over €3bn worth of residential properties acquired in H1 2017, a c. 11% increase YoY. The Sunday Times, 10th September
Permanent TSB (PTSB) Debt Forgiveness: The Irish Times reports that AIB, Bank of Ireland, and KBC have ruled out implementing a similar initiative to the one announced by PTSB, which has seen the bank write to hundreds of buy-to-let investors, offering to write-off any arrears or shortfalls on their loans if they agree to a voluntary surrender of the property. PTSB have advised that any write-off will only occur if the borrower has no means of making up the shortfall once they have disposed of the property. The Irish Times, 6th September
Rocketts Castle: Savills is guiding c. €6m for the Rocketts Castle estate near Portlaw in Co. Waterford. The estate, which extends to 250 acres, includes a fortified tower which dates from the 13th century, a six-bed house which dates from the 19th century and a five-bed lodge which lies next to the main residence. Although the main house dates from the 19th century, it has been extensively refurbished in recent years, with c. €700k spent on Waterford Glass chandeliers. The current owners are Thomas and Rosemary Driver. The Irish Times, 7th September
OFFICE
21 Charlemont: Rohan Holdings has sold 21 Charlemont, a recently completed office development near the Charlemont Luas Stop in Dublin 2, to the La Française Group for c. €45m. The 37,000 sq. ft. building has been pre-let to the communications company Viasat for c. €55 psf, which is about 10% above the rent anticipated by market sources when construction began in 2015. The rent roll will be c. €2.04m p.a., suggesting a yield of nearly 4.5%. The Irish Independent, 7th September
Rockfield Central: The construction firm Mac Group and the Canadian asset manager Timbercreek have acquired two office buildings and two levels of shops in a third building at the Rockfield Central complex in Dundrum, Dublin 14 for €16.6m, c. €1.6m above the guide price. The properties are over 90% occupied, and generate rental income of c. €1.2m p.a., although there is potential to increase this in the short term, as there are six rent reviews outstanding at a time when surburban rents are back up to the mid €20s psf. The purchased office blocks are the eight-storey north block (38,750 sq. ft.), and the six-storey south block (25,402 sq. ft.), while the two levels of shops are contained within the east block. The retail tenants include Mace, Brickyard Bar and Rockfield Pharmacy, while office tenants include Mott McDonald, Locomotion, Medserv and Affidea Diagnostics. The Irish Times, 6th September
INDUSTRIAL
Industrial Market Review: Cushman & Wakefield’s Q2 2017 report on the Irish industrial market shows that the total take-up in Dublin, Limerick, Cork and Galway equated to 1.543m sq. ft. Dublin accounted for the majority of this figure, with c. 1.4m of take-up, with Limerick recording the second-highest level of take-up with nearly 110,000 sq. ft. There was a subdued level of take-up in Galway, with just below 6,000 sq. ft. of space transacted in H1 2017, although there were a number of units reserved in H1 2017, therefore take-up for H2 2017 should be stronger in the county. Cushman & Wakefield Irish Industrial Market Review, Q2 2017
OTHER
BidX1 Auction: BidX1, the new brand name for Allsop Ireland, are hosting the largest ever auction of Irish properties in the next few weeks, with the auction consisting of more than 310 lots with a combined value of over €60m. On 27th September more than 200 residential lots with a combined value of over €30m will be auctioned, while on 28th September over 110 lots, including commercial investments and development land, will be offered with combined reserves of over €30m. The Irish Independent, 7th September
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