13th December (Issue 76)

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.



Project Gem: NAMA Wine Lake (NWL) references a Bloomberg report from last week which states that Cerberus has been chosen as the preferred bidder for Project Gem, a c. €3bn par value loan portfolio. The assets securing the loans in the portfolio include commercial properties in Ireland, Germany and the UK. According to NWL, the portfolio is unlikely to sell for more than 20c in the Euro. Oaktree and Goldman Sachs are believed to have been underbidders for the portfolio. NAMA Wine Lake, 11th December

Permanent TSB (PTSB) Transaction: PTSB has withdrawn from talks to buy c. €100m of mortgages that originated from GE Capital’s former Irish portfolio of sub-prime loans. The performing home loans were part of a portfolio (containing mainly non-preforming loans) that was previously sold to the Australian firm Pepper in 2012, in a deal that was financed by Goldman Sachs. The acquisition would have been PSTB’s first purchase since the financial crisis, and the decision comes as analysts predict that mortgage lenders will receive a boost next year from both the Government’s help to buy scheme and the Central Bank’s relaxation of borrowing limits for first time buyers. The Irish Times reports that Pepper and Goldman Sachs may seek another buyer to purchase the loans following PTSBs withdrawal from the purchase. The Irish Times, 12th December



Manor Mills Shopping Centre: Avenue Capital Group has purchased Manor Mills Shopping Centre in Maynooth, Co. Kildare for c. €14m. The 116,803 sq. ft. centre contains 26 shops, four kiosks, a restaurant and 500 underground car parking spaces. The anchor tenant is Dunnes Stores (who own their unit) and other traders include Elverys, Eason and Vodafone. The rental income is c. €1.229m p.a. with a weighted average unexpired lease term of c. 8.6 years. The majority of the leases are on FRI terms, while seven traders pay a base rent and percentage of their turnover. The centre, which was prefunded before the property crash for c. €48m, is trading strongly due to its location close to both St Patrick’s College and Maynooth University. The Irish Times, 7th December

Clerys Planning Permission: Natrium has been granted planning permission by Dublin City Council for the redevelopment of the former Clerys department store into a mixed-use development of offices, retail units, leisure facilities and a boutique hotel. As part of the redevelopment, Natrium intends to create a ‘rooftop destination’ area containing restaurants, bars and entertainment spaces offering views over both Dublin city and Dublin bay. The company also intends to reinvigorate Earl Place into a new street containing both retail units and a pedestrian shopping area. Dublin City Council granted the approval despite over 40 ‘objector letters’ to the application, however it has attached 28 conditions to its approval. The Irish Independent, 10th December



Velasco Building: Irish Life has purchased Velasco, an eight-storey office building currently under construction on Clanwilliam Place in Dublin 2, for c. €58m in an off-market sale. The new 51,000 sq. ft. block is being developed by Ardstone Capital, on behalf of CBRE Global Investment Partners, with construction being managed by Hardwicke Ltd. The new building will be finished to an LEED Gold Standard with a BER A3 rating and will contain floor plates ranging from 5,100 sq. ft. to 7,800 sq. ft., along with 13 car parking spaces. Agents JLL stated that the price achieved was reflective of both the quality of the building and its prime location. Irish Life are one of the largest office landlords in Dublin, and are expecting pent-up demand for office accommodation in Dublin as a result of the recent Brexit vote. The Irish Times, 7th December

1 Windmill Lane: Hibernia REIT has paid €27.5m to acquire Starwood Capital’s 50% interest in the Windmill Lane Partnership (WLP), thereby giving Hibernia REIT 100% ownership. WLP was formed to hold and develop 1 Windmill Lane, a new development under construction on a one-acre site in Dublin’s south docklands. 1 Windmill Lane will contain 122,000 sq. ft. of offices, 7,000 sq. ft. of retail and 14 residential units when completed in late 2017. As part of the transaction Hibernia REIT will also acquire Starwood’s 50% share of the €44.2 million non-recourse debt facility with Deutsche Bank. This facility is currently €8.8m drawn down, and will be used to fund the remaining capital expenditure of c. €28m. Hibernia REIT has stated that the price equates to a capital value of €750 psf for the office space, and the company now owns five adjacent properties in the area which are either completed or under construction. When the development of all these properties has been completed, they will provide over 370,000 sq. ft. of office space in the area. The Irish Times, 13th December

Wilton Park House: The Sunday Times reports that IPUT is taking control of Wilton Park House, the Dublin HQ of IDA Ireland. It already owns a one-third share of the 140,000 sq. ft. office block, and is purchasing the remaining holding, which is held by pension funds managed by State Street Global Advisors. The building is believed to be worth c. €84.5m, however IPUT may get a discount as it is an off-market transaction involving existing shareholders. The Sunday Times reports that IPUT may be acquiring the full interest to allow them to redevelop the property.  The Sunday Times, 11th December

D’Olier Street: A German investment fund is reportedly close to purchasing the former Irish Times HQ on D’Olier Street and Fleet Street in Dublin city centre for nearly €50m. The top floor of the building is currently occupied by the Irish Aviation Authority, while three of the seven ground floor retail units are let. The combined rent roll is c. €2.5m p.a., offering a net initial yield of c. 5%. The building, which extends to 90,707 sq. ft. was purchased by Kennedy Wilson after the property crash. The Irish Times, 7th December



Hines Acquisition: Hines is reportedly finalising the purchase of the interests of Oaktree Capital Management in a Dublin student accommodation portfolio. The portfolio covers 1,460 student beds across four separate developments, for which the combined value is c. €230m. The four developments include Binary Hub, a 471-bed facility in Dublin 8, and three projects currently in planning or under development (a 447-bed development under construction at Dorset Point in Dublin 1, a 374-bed development under construction at Summerhill in Dublin 1 and a further site in Dublin 8). The sale follows on from Oaktree’s decision to exit the European student accommodation market and will see Hines become one of the largest players in the student accommodation market in Dublin. The Sunday Times, 11th December

Donnybrook Development: Purleigh Holdings Ltd has been granted planning permission by An Bord Pleanála for a c. €50m luxury apartment development on a 3.3-acre site in Donnybrook, Dublin 4. The project will involve the construction of 71 apartments in five standalone blocks. The scheme was previously approved by Dublin City Council despite 18 objections against the development, including three from local residents groups. The 30 residents in the adjoining Nutley Square development appealed the decision to An Bord Pleanála along with Greenfield Park Residents Group and others. The Irish Times, 7th December

Clontarf Development: Cushman & Wakefield is guiding €3.6m for Verville Retreat (one of the oldest buildings in Clontarf) and an adjoining 1.3 acre site, which together have combined planning permission for a mixture of 19 apartments and houses. Verville Retreat extends to 12,600 sq. ft. and has planning permission to be converted into six apartments (two one-beds, one two-bed and three three-beds). In addition, permission has been granted to convert the gate-lodge into a two bed mews and there is further planning permission for eight three-bedroom units and four detached dwellings. It is anticipated that the site will also allow for the provision of 23 surface car-parking spaces. The Irish Times, 7th December

Stillorgan Apartments: A newly constructed NAMA-funded block of 54 apartments and penthouses at the Grange in Stillorgan, south Dublin has been put on the rental market, in a move which is likely to attract interest from residential property funds who may speculate that a sale of the units will follow. The apartments, which are being marketed by Hooke & MacDonald, start at €1,475 p.m. for a one-bed, €1,775 p.m. for a two-bed and €3,000 p.m. for a three-bed penthouse. The Irish Times, 7th December

Rent Proposals: The Irish Times reports that Minister for Housing Simon Coveney is to submit a proposal to the Government Cabinet this week seeking the introduction of new legislation for the private rental sector. The new measures would limit the permitted annual increase in rent in designated rent pressure zones to 4%, or 12% over three years, with sources suggesting that Dublin and Cork would be immediately designated as rent pressure zones. Once an area has been designated as a rent pressure zone, the restrictions will remain in place in the area for three years. Under the proposal, the Residential Tenancies Board (RTB) would have the authority to recommend which areas are designated as rent pressure zones.  The Irish Times, 13th December

Stoneybatter Student Accommodation: Two new applications have been made to Dublin City Council to construct student accommodation developments in Stoneybatter, Dublin 7. Gurtmont Ltd has applied to construct a five-storey, 96-bedroom complex on the site of existing buildings at Manor Street, which will be demolished. A further application has been made by Ziggurat ROI No 1 LP to construct a seven-storey, 180,000 sq. ft. complex with 444-bedspaces at the junction of Rathdown and North Circular roads. Nama Wine Lake, 11th December

Ship Street Development: Luxor Investments Ltd, an Irish-registered company owned by Padraic Rhatigan, has applied to Dublin City Council to construct a 200,000 sq. ft. residential-led development in Ship Street Great in Dublin city centre. The proposed development will contain 86 apartments (27 one-beds, 43 two-beds and 16 three-beds) ranging in size from 550 sq. ft. to 1,300 sq. ft. There will also be museum space and conference facilities on the site. Nama Wine Lake, 11th December

Donabate Development: Roxtip, a company whose directors include Bernard McNamara, has applied to build 36 houses on a 2.47-acre site in Donabate in north County Dublin. The sale of the site (which had a guide price of €1.3m) on which the houses will be built was handled by Ganly Walters. The Irish Independent reports that Mr McNamara is planning to build ‘high quality’ three-bedroom houses on the site that will be aimed at the first time buyer market. It is estimated that construction of the houses will cost a further €6m in addition to the purchase price of the site. Irish Independent, 9th December

Mortgage Arrears: The Q3 2016 report from the Central Bank on mortgage arrears shows that the number of principal dwelling houses (PDH) in arrears fell for the thirteenth consecutive quarter in Q3 2016. The number of accounts in arrears fell by 3.1% to 79,562. However these figures show that 11% of all PDH accounts are in some form of arrears. The report shows that 421 properties were taken into possession by Lenders during the quarter. Central Bank of Ireland, Residential Mortgage Arrears and Repossessions Statistics: Q3 2016



Cork City Flooding Scheme: Approximately 2,000 properties in Cork City are to get new flood defences in the largest scheme ever undertaken in Ireland. The new €140m scheme will include the construction of new quay walls and embankments in the city, floodgates, and a flow control system in the River Lee. The flood defences will protect over 900 homes and 1,200 businesses in the city and will reduce the risk to a further 1,000 properties. Construction is due to begin next year and comes after Cork City suffered flooding four times in recent times, including one incident in 2009 which resulted in damages of c. €100m. The Sunday Business Post, 11thDecember


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