12th September (Issue 414)

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

East Wall, Dublin 3 Landesbank Hessen-Thüringen Girozentrale, the German lender that financed the most recent acquisition of the Beckett Building by South Korean based Kookman Bank, has appointed a receiver over the building, seizing control of the property from the South Korean fund. In recent days, Grant Thornton were installed as receivers over a company called Beckett Acquisition Limited, which is owned by LB Investment, a South Korean asset manager that worked with Kookman Bank on the deal. LB had privately agreed a deal with the German lender to put the property on the market. It was even reported that CBRE had been retained to sell the property and that the owner was looking to bring the Beckett Building to the market at a guide price of €80m. This was less than the €101m it paid for the property in 2018. However, it had pulled in significant rent over the period of its ownership. According to its most recent accounts, for the year to the end of 2021, Beckett Acquisition received rental income from leasing the property on a quarterly basis and income for the period ended on November 30, 2021 was €4.3m. It owed its lender €60m, while it owed related companies a further €41m, accounts show. It has been reported that Meta planned to vacate the building early. The Currency, 11^th September

Merrion Road, Dublin 4 With US-headquartered engineering company Jacobs Engineering due to vacate the long-standing base of its Irish operations at Merrion House on Merrion Road in January 2024, joint agents Savills and Hooke & MacDonald have been engaged by Castlethorn to put the office building and its 2.92-acre site up for sale. Merrion House is being offered to the market at a guide price of €19.75m, or €30m less than the €50m Castlethorn paid Bank of Ireland Asset Management when it acquired the property in an off-market deal in 2005. Although Merrion House’s current guide price represents a 61% discount on its Celtic Tiger high, the property had been generating €2m in annual rental income at the time of Castlethorn’s purchase from its then tenant base of Jacobs Engineering, Swiftcall and Combined Insurance. The subject property comprises the Merrion House office building which extends to 86,493 sq. ft over three floors along with 201 surface car-parking spaces on an overall site area of 2.92 acres. The Irish Times, 6^th September

Adelaide Road, Dublin 2 Lisney has brought an office building at 19-20 Adelaide Road in Dublin 2 to the market for sale with a guide price of €4.5m. The property is located at the junction of Adelaide Road and Earlsfort Terrace and will be sold with vacant possession. The four-storey over garden level building extends to 8,503 sq. ft (NIA) and is currently laid out as office accommodation which was previously occupied by a trade union. The Business Post, 8^th September

College Green, Dublin 2 With 34 properties from its former branch network now on the market, Ulster Bank has instructed agent Cushman & Wakefield to find a buyer for its landmark premises at no. 33 College Green in Dublin City Centre. The property is being offered for sale at a guide price of €13.5m. The property comprises a six-storey over-basement office building, the majority of which was built in 1975. The building occupies a site of approx. 0.30 acres and slopes slightly downwards from Suffolk Street to College Green. The entire building has a gross floor area of 62,861 sq. ft. The Irish Times, 6^th September

Lower Baggot Street, Dublin 2 A private Irish investor has paid €3.5m to secure ownership of 73 Lower Baggot Street, a prime Georgian property with development potential. The price paid represents a 17% premium on the €3m Colliers had been guiding when it offered the property to the market on behalf of the Health Research Board in February of this year. The subject property comprises a four-storey over-basement, end-of-terrace Georgian building extending to a net internal area of 3,978 sq. ft. The property, which is currently in office use, sits on an extensive site with original coach house to the rear. The Irish Times, 6^th September

HOSPITALITY

Dame Lane, Dublin 2 Located in the Hely Building on Dame Lane and within a short walk of Grafton Street, the REZz, a 51-bedroom property, is being offered to the market as an investment sale on behalf of the building’s owner, Eir, by JLL at a guide price of €10m (NIY 6%). The 90-year lease entered into by the REZz brand and the property’s €650k annual rent roll is expected to see significant interest from both Irish and international investors. The REZz Dublin briefly comprises 51 guest bedrooms, with 30% of these laid out as triple bedrooms furnished with a double and a single bed. The Irish Times, 6^th September

Portumna, Co Galway Businesses and residents of Portumna in Co Galway have appealed to the Comer brothers to sell the derelict Shannon Oaks Hotel site. The hotel has been boarded up for more than a decade ever since a fire ravaged large sections of the building. The business behind the hotel went into liquidation soon after the fire, with the property acquired by Galway brothers and property developers Luke and Brian Comer in 2016. In 2020, Dalakhani Unlimited Company, owned by the Comer brothers, secured planning permission from Galway County Council to commence renovation for a 60-bed hotel. The Business Post, 10^th September

Press Up Accounts A number of companies in Press Up Hospitality group showed substantial increases in turnover and profits in 2022, freshly filed accounts show. The group doesn’t publish consolidated accounts, but one of the larger companies, Willow Impact Limited, showed a rise in turnover from €16.9m to €45.7m in 2022, as food and beverage sales leapt from €10.6m to €21.7m and revenue from room sales went from €5.8m to €24m. Its pre-tax losses were €8m, down from €11.9m the year before. Another company, Holtend, had a rise in turnover from €1.7m to €7.4m. Its pre-tax profit was €2.3m, from a loss of €1m the year before. According to its company filings, Holtend is the company behind the Dean Hotel on Harcourt Street, the Workman’s Club, and Sophie’s, a restaurant. Brushfield Limited, the company behind the Clarence Hotel in Dublin, had turnover of €2.8m in 2022, up from €434k the previous year. Its costs also rose in that period, from €644.5k to €2.4m, meaning it had a pre-tax profit of €457k, which was an increase on its pre-tax loss of €1.1m the year before. Premier Dale Limited, meanwhile, had a rise in turnover from €1.4m to €5.5m. The Business Post, 8^th September

South Mall, Cork One of Cork City Centre’s best-known bars and restaurants, Electric, has been put up for sale with a guide price of €2.5m. Totalling over 6,000 sq. ft over three floors and overlooking the river Lee, it was developed at an overall cost of €3.3m, including an auction purchase price at €1.65m in 2009 after it was sold off by ACC Bank. It has capacity for 330 patrons at ground and first floor and has seating for 150 more on a west-facing outdoor area/beer garden. The Irish Examiner, 6^th September

MIXED-USE

Donnybrook, Dublin 4 Jones Investments is seeking tenants through Agar Commercial Property for the landmark former AIB bank branch building at the junction of Morehampton Road and Marlborough Road in Donnybrook, Dublin 4. Having recently secured ownership of the property, 69-71 Morehampton Road for a figure which is understood to have been below the €2.5m guided by agent Browne Corrigan Chartered Surveyors, Jones’s team have sought planning permission from Dublin City Council for a change of use to retail and food and beverage at ground-floor level, and to office and medical use on the first floor. Under this revised layout, the ground floor will comprise 2,476 sq. ft of open-plan space. The building is being offered to let under the terms of a long-term lease and is guiding a rent of €215k pa for the entire. The Irish Times, 6^th September

Ronan Group Real Estate (RGRE), Dublin Developer Johnny Ronan is in talks to sell up to €300m worth of prized property assets including the historic Bewley’s Café building to an international buyer. The RGRE properties include a number of well-known buildings including Connaught House and Percy Place in Dublin 4, Kingram House in Dublin 2 and Kilmore House in Dublin 1. The building housing Permanent TSB on Grafton Street, a number of apartments near the Grafton Street area and the Bewleys building are also included in the proposed sale. The market value of the 12 properties, some of which are co-owned with Davy Stockbrokers, is believed to be between €280 and €300m. The Business Post, 7^th September

Ballysimon Road, Limerick Colliers has been instructed to sell a headquarter office and industrial facility on approx. 6.3 acres on the Ballysimon Road in Limerick city on behalf of Roadbridge Ltd (in receivership) care of Grant Thornton. The agent is guiding €2.8m for the property, the former headquarters of Limerick-based construction giant, Roadbridge. The office building measures 14,595 sq. ft and was recently refurbished to a high standard. There are three industrial buildings included: a mechanics workshop, garage and plant stores with a combined floor area of 14,300 sq. ft. The Business Post, 9^th September

RETAIL

Planning Permission Delays Aldi has taken aim at An Bord Pleanála over delays processing planning appeals, with a new report published by the German supermarket chain claiming it has been left waiting 91 weeks for one decision over whether it can open a new supermarket. Aldi says that between 2018 and 2022, it faced appeals or objections on 16 of its planning permission applications. An Bord Pleanála did not process 13 of these appeals within its 18-week statutory objective period, resulting in significant delays for the supermarket. In one instance, Aldi had to wait for 91 weeks – one year and nine months – before An Bord Pleanála decided to reject an appeal that had been lodged against its plans to develop a new shopping centre in Castlecomer, Co Kilkenny. In another case in Cootehill, Co Cavan, Aldi has been waiting 60 weeks for An Bord Pleanála to decide whether to accept or reject an appeal against a planning application it has made for a new supermarket in the area. The Business Post, 7^th September

St Stephen’s Green, Dublin 2 The owners of St Stephen’s Green shopping centre in Dublin have revised their €100m rejuvenation plan for the centre in response to council concerns. In revised plans lodged with Dublin City Council, Davy Real Estate has added extra retail and food and beverage uses along with a two-screen cinema to the development. A decision is due on the application later this year. The Irish Examiner, 8^th September

INDUSTRIAL / LOGISTICS

Little Island, Cork The commercial team at Lisney Cork is offering a detached warehouse/industrial unit to let on a one-acre site in Little Island, Cork for €140k pa. The property at No. 7 Waterfront Business Park extends to 14,000 sq. ft and incorporates a two-storey office/service block. The Business Post, 9^th September

RESIDENTIAL / DEVELOPMENT

Lower Baggot Street, Dublin 2 The 0.149-acre site at James Place East is guiding at a price of €1.7m through agent JLL. The property, currently in use as a surface car park for 24 vehicles, is being sold with the benefit of full vacant possession. It is zoned Z10, the aim of which is “to consolidate and facilitate the development of inner city and inner-suburban sites for mixed uses” under the Dublin City Development Plan 2022-2028. The Irish Times, 6^th September

Residential Supply, Dublin Kennedy Wilson has recently completed three major residential developments in Dublin totalling 800 units. The schemes at Coopers Cross, The Grange, and Sandford Lodge add to the US multi-national real estate investment company’s Irish multi-family portfolio, which now stands at more than 3,300 units with another 232 units under development. The Business Post, 10^th September

Midleton, Co Cork Glenveagh Homes has submitted a Large-Scale Residential Development planning application to Cork County Council to build 270 residential units, 43 garden sheds, a crèche, three ESB substations, a temporary waste-water treatment plant and pumping station and all associated development works at Castleredmond in Midleton, Co Cork. The Business Post, 9^th September

Rathgowan, Mullingar A €30m planning application was submitted to Westmeath County Council by Marina Quarter Ltd to build 181 residential units at Rathgowan, Mullingar. The development will form two phases of a larger (three-phase) residential development. The Business Post, 9^th September

Centre Park Road and Monahan Road, Cork Cork City Council has granted planning to Leeside Quays Ltd for a 10-year planning permission for a large-scale residential development at the Goulding’s site on Centre Park Road and Monahan Road. Permission was granted for 1,325 residential units, including apartments and duplexes in 10 buildings, and a two-storey, 7,158 sq. ft crèche. The development ranges in height from two to 14 storeys over a single basement and will include four cafés/restaurants, retail units, a convenience store and offices. The scheme will provide 658 one-bed units, 465 two-bed units and 202 three-bed units. The Business Post, 9^th September

Ardee, Co Louth An Bord Pleanála granted planning permission with conditions to The Ardee Partnership to build a further 272 residential units comprising 206 two, three and four-bedroom houses and 66 one, two and three-bedroom duplex units at Bridgegate Avenue in Ardee, Co Louth. The new homes will be built on a site of 32 acres adjoining phases 1-3 at Bridgegate (which is already under construction) on lands to the west. Plans include a two-storey crèche and playground, a central community hub, a landscaped public park and open public spaces and cycle lanes. The Business Post, 9^th September

Cairn Homes expects to close 1,800 home sales in 2023, 18% higher than last year, as the country’s biggest housebuilder upgraded its revenue guidance for the year after reporting its best-ever period for sales. Announcing half-year results for the six months to June 2023, the company said it had closed 535 new home sales in the period. In the second half of the year, Cairn said it was forecasting more than 1,265 home sale completions, bringing the overall projected figure for the year to 1,800. Overall, between its closed and forward sales pipeline, Cairn has an order book of 2,730 units, with a net sales value of more than €1bn. The Business Post, 7^th September

Housing Supply The number of new homes completed in the State could exceed 30,000 this year despite a slowdown in the second quarter and capacity constraints within the construction sector, the Banking and Payments Federation of Ireland (BPFI) has said. In its latest Housing Market Monitor report, the banking sector lobby group said approx. 7,353 units were delivered between April and June, a decline of 3.5% from the same period last year. However, on a rolling 12-month basis, the BPFI said a total of 30,546 new dwellings were completed in the year to the end of June, compared with 24,841 in 2022. Meanwhile, work on 8,212 new units commenced over the period, a 14.8% increase on the second quarter of last year. The Irish Times, 12^th September

Housing Approvals There was an annual drop of more than 23% in the number of homes approved for planning permission in the second quarter, according to new data from the CSO. The number of “dwelling units” approved in the three-month period stands at 8,723 compared with 11,374 in the same quarter of last year. The annual fall came in marked contrast to the first quarter when an increase of 38% was recorded. For the six-month period from January to June, there was an overall increase of 3% in the total number of dwelling units approved when compared with the same period in 2022. Apartments accounted for 58% of all dwelling units approved, while housing units made up the remaining 42%. This was the first time since the second quarter of 2022 when more apartments than houses were granted planning permission. The number of houses granted planning permission fell by 18% on an annual basis to 3,702 housing units, while apartment approvals were down by 27% to 5,021 units. There was an annual decrease of more than 36% in the number of one-off houses receiving planning permission in the second quarter, compared with an annual decline of 32% in the first quarter. An annual fall of 6% in multi-development houses receiving planning permission in the second quarter compared with an annual increase of 81% in the first. The Irish Times, 8^th September

The Society of Chartered Surveyors Ireland (SCSI) has called for “long-term planning” in Government budgets to drive down the cost of new housing, warning that increased construction costs are leading to many projects being paused or cancelled as they are “no longer financially viable”. Launching its pre-budget submission, the SCSI said that the viability gap that exists between the construction cost and the market price for new home buyers is at “unsustainable levels in many parts of the country”. The society has called on the Government to adopt longer-term plans across several budgets to drive down construction costs. The society also recommended the introduction of a rebate that lowers the capital gains tax rate to 8%, specifically for development land utilised for construction of new housing. The SCSI is also advocating for the establishment of a land price register, similar to the existing property price register, to promote transparency and fairness in land transactions and policy development. The Irish Times, 8^th September

OTHER

Vacant Commercial Real Estate, Ireland The number of vacant commercial properties increased in 20 counties in the 12 months to June 2023, according to the latest Geodirectory survey. It showed 29,798 vacant commercial units recorded in the 26 counties during the second quarter of this year, a rise of 557 when compared with the previous year. The 0.2% rise to 14.1% vacancy in the 12 months was the highest level on record since 2013. Dublin recorded an increase of 0.5% during the year, with the commercial vacancy rate in the capital rising to 13.1%. This trend continued in the Greater Dublin Area where vacancy rates increased from 12.6% to 13% over the 12 months. As many as 180,809 occupied commercial address points were recorded in Q2 2023, representing a net decline of 874 on the Q2 2022 figure. The services sector was hit the hardest, suffering a decline of 876 units, followed by the retail and wholesale sector which suffered a decline of 603 units. The Irish Independent, 7^th September

Tallaght, Dublin 24 TU Dublin has opened a €14.7m teaching, research and recreation facility at the university’s Tallaght campus. Opening in time for the academic year, the new building provides an extra 35,327 sq. ft of space and includes classrooms, laboratories and one of the largest multi-purpose sports halls in Dublin 24. The facility is just one of several new developments planned for the university’s Tallaght campus, with a 55,972 sq. ft multi-disciplinary building currently under construction, adding a total of 91,299 sq. ft of additional student space since the establishment of TU Dublin in 2019. The Business Post, 10^th September

Cork Event Centre The cost of building the proposed €85m Cork event centre is set to soar again, casting doubt on assurances that construction would finally start this year — more than seven years after the official sod-turning. City councillors were told that the completion of the detailed designs for the proposed 6,000-capacity venue, which is in line for approx. €57m in State investment, has resulted in a cost increase. Talks about the increased costs are ongoing, and a revised timeline for delivery cannot be provided until those talks are completed, they were told. The Irish Examiner, 12^th September

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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.