13th February (Issue 434)
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.
INDUSTRIAL / LOGISTICS
Citywest Richmond Marketing has agreed a pre-letting of a new logistics facility in Citywest, a move which will allow the brand builder to amalgamate its distribution operation in Park West, with its head office in the city centre. Construction has commenced and the new 126,000 sq. ft. building is due to be completed in the fourth quarter of this year. The pre-letting deal was signed with Con McCarthy’s Rockface Developments for the prime warehouse and office HQ at 4065 Kingswood Road in Citywest. Once the building is finished, Richmond Marketing will enter into a new 25-year lease, incorporating a 15-year break option. The property will include a three-storey grade-A office space. The Irish Times, 7th February
Balbriggan A major pharma logistics hub is being planned for Balbriggan, following a land swap between Fingal County Council and logistics firm Hannon. As part of the deal, Hannon, one of the largest logistics firms in the State, is acquiring 10 acres at the Stephenstown Industrial Estate on the southwestern edge of the town. In return, the local authority is taking 12.32 acres of land currently owned by Hannon at the Blake’s Cross junction of the main R132 road that serves a number of towns. The Stephenstown land is valued at €2.15m and the Blakes Cross land is valued at €1.15m. Under the arrangement, Hannon will pay a balancing payment of €1m to the local authority.
Fingal County Council is to acquire the Blake’s Cross land to facilitate future upgrades to the road network at this location, allowing easier access through the traffic blackspot to the towns of Skerries, Lusk and Rush. Ireland is one of the leading locations for the pharmaceutical industry in Europe with more than €70bn of exports each year. The country is now home to major operations for nine of the top 10 global companies in the sector. Sunday Independent, 11th February
STUDENT ACCOMMODATION
Dublin 12 Dublin City Council has rejected proposals for a 941-bedroom student accommodation development, to be built on a site near the Naas Road in Dublin 12. To be delivered by Malclose, the scheme was to be built on a roughly one hectare site at Gowan House, within the Carriglea Business Park. The large-scale residential project would consist of 871 standard rooms, 47 accessible studios and a further 23 studios. Malclose is a subsidiary of UK builder Michael Cox’s Hollybrook Homes. Plans detailed two blocks to be built of up to 15 storeys, and would include communal and cultural spaces, a café and retail unit and public open spaces.
The proposals, which were submitted in November, also indicated that the bed spaces could be used for short-term lets during student holiday periods. However, the council refused to grant permission as the scheme was entirely allocated for student accommodation with no residential provisions, contrary to a zoning objective of the Dublin City development plan. The authority also cited the location’s remoteness from any third-level educational campus and its “inappropriate location” within the Carriglea industrial estate. It pointed out the area being disconnected from any shops, amenities and residential services, and thus it “fails to align with the principle of a 15-minute city and promotes unsustainable travel patterns”. React News, 7th February
RETAIL
Swords, Co Dublin A high-performing neighbourhood retail scheme being brought to the market by CBRE is guiding in excess of €3.7m. The retail unit at the Millers Glen residential development in Swords, north county Dublin, currently produces a net initial yield of about 7.3%. This equates to a capital value of €212 per sq. ft. The recently built scheme comprises of four ground-floor retail units and a creche unit extending to approx. 17,448 sq. ft. Anchored by Centra convenience store (Musgraves), along with McCartan’s Pharmacy, McCartan’s Medical Centre and Just Like Home Childcare, the centre is generating a contracted rent roll of €297,150 a year, with an overall WAULT to break of about 7½ years. The Irish Times, 7th February
Tyrrelstown, Dublin 15 Cushman & Wakefield is seeking offers of more than €4m for a site with planning permission for a 50,000 sq. ft retail centre in Tyrrelstown, Dublin 15. The greenfield development site of 4.19 acres is currently owned by Glenveagh Properties. The scheme would be anchored by a substantial supermarket unit and also comprise a medical centre, cafe and an additional retail unit once completed. The development has 157 surface car-parking spaces with the site, and several existing Dublin Bus routes serve the area. The retail site is in close proximity to an ongoing residential development by Glenveagh, which has plans for the construction of more than 1,000 new homes. The Irish Times, 7th February
North Earl Street, Dublin 1 A commercial property which could benefit from the completion of Clerys Quarter on O’Connell Street has had its asking price cut from €1.85m to €1.25m. The property at 4 North Earl Street comprises a terraced four storey over basement building extending to 5,250 sq. ft. Its ground floor consists of a vacant retail unit with floor-to-ceiling glass front, glass door and electric roller shutter. It has a retail frontage of 6.25m and a depth of 25.5m on the ground floor. The upper floors comprise of a red brick façade. The property requires a full refurbishment. Its site is zoned Z5 City Centre in the Dublin City Development Plan 2022-2028 and this would facilitate a range of uses including: restaurant, cafe, publication, tourist hostel, office, education, medical and residential uses. Only three doors from the corner with O’Connell Street, it is also only 100m from the Spire, and close to Henry Street, one of Dublin’s busiest shopping streets. Irish Independent, 8th February
Dublin 6 A landmark cafe kiosk on Orwell Road, Rathgar is being offered to an operator on a five-year lease with Lisney guiding €20,000 a year. It comes to the market at a time when roadside cafes have become very popular with motorists, as well as walkers out for their strolls along the River Dodder. It will be handed over in shell and core specification, ready for a tenant’s fit-out. Water, drainage power and Eir connections will be available in the unit. Internally, the property will comprise cafe/retail area to front with disabled WC to rear. Irish Independent, 8th February
HOSPITALITY
Dublin 1 Less than three years after it was sold for €65m, Dublin’s luxury Morrison Hotel could be close to changing hands once again for more than €100m. The Irish Times understands the Morrison’s owners, Zetland Capital, have just instructed agent CBRE to quietly gauge the interest of investors in acquiring the five-star property. The London-based private-equity firm purchased the Morrison in May 2021 for some €15m less than the €80m its long-standing owner, Russian billionaire Yelena Baturina, had been seeking when she put the hotel up for sale in March 2020.
Ms Baturina had acquired the boutique hotel from Nama for just €22m in 2012. She spent a further €10m on its refurbishment between 2012 and 2013. Designed originally by Douglas Wallace Architects, the property comprises 145 guest rooms and suites, seven meeting and events facilities capable of accommodating up to 240 guests, as well as a state-of-the-art fitness centre. The Morrison’s accommodation is complemented by a range of bar and restaurant facilities, including Halo Restaurant, Quay 14 Bar and the Morrison Grill. It trades under the Hilton Worldwide group’s bespoke Curio Collection brand. The Irish Times, 6th February
Dublin 2 Planners have refused developer Esprit Investments permission for a 300-bedroom hotel on Mount Street in Dublin. Esprit last year sought permission from Dublin City Council (“DCC”) to build the hotel and apartments on a site bounded by Mount Street Upper, James’s Place East and Herbert Street in central Dublin. DCC said the hotel “would not contribute positively to the local area character and distinctiveness”. It added that it would have a significantly adverse impact on the area’s special architectural character and protected structures and on the “amenity and outlook” of Scoil Chaitríona, opposite the site, as well as contravening several planning policies. DCC argued the hotel’s “height, scale, massing and site boundaries” would likely have “noticeable and detrimental overbearing and overshadowing impacts on neighbouring property” and their privacy.
The plans involved converting offices that house law firm LK Shields in a Georgian terrace on Mount Street to accommodate the hotel entrance and 20 suites, and then demolishing buildings on nearby James’s Street and replacing them with a seven-storey structure that would form the rest of the hotel. A glazed bridge over a sunken garden would link the hotel’s two sections. Esprit said this would act as a buffer between the Georgian architecture and the newly-built element. The Irish Times, 9th February
Leitrim County Council has issued High Court enforcement proceedings over a proposal to house 150 international protection applicants at a former hotel in Dromahair village. The local authority alleges Dromaprop Limited intends to change the use of its Abbey Manor Hotel from a “specific form of tourist accommodation” to temporary use for asylum seekers and has carried out unauthorised works in preparation for this change. Planning permission granted for the premises was based on commercial tourism use, where specific tourism-related policies were cited, the council alleges.
The firm’s case seeks to quash the council’s decision to declare as invalid its certificate of compliance with building regulations. Dromaprop also wants the court to direct Leitrim County Council to enter the certificate of compliance on to its official register. It says it was entitled to avail of an exemption for the change of use to temporary accommodation for displaced people or those seeking international protection. Ms Justice Niamh Hyland granted permission for Dromaprop to pursue its claim and transferred the case to the High Court’s Planning and Environment list. Mr Justice Richard Humphreys, who deals with planning matters, scheduled for both cases to be heard in April. The Irish Times, 12th February
OFFICE
Dublin Vacancy The oversupply of office space in Dublin could continue until the end of 2026 or start of 2027, new research suggests. The study by BNP Paribas Real Estate Ireland finds a delay in completing buildings last year has now spilled into this year. This has led to excess supply in the market which is unlikely to peak until next year, when it hits 16.6% or 2,690,978 sq. ft. The analysis claims the overhang will not be rapidly re-absorbed, because remote working means there is less demand for space.” Before Covid, every new desk job generated around 108 sq. ft. of office demand. However this figure has plunged by two thirds since Covid,” said John McCartney, Research Director at BNPPRE. “With only 34 sq. ft. now being consumed for each additional job, it is going to take longer than before for the market to digest the vacancy overhang.”
The research also finds that Dublin office take-up last year was half of the 2022 figure at 1,323,434 sq. ft. That represents the lowest take-up in space since 2010 and was driven by both fewer deals and smaller average deal sizes. The analysis also finds that the vacancy rate reached 13.1%. It also outlines how rent-free periods are increasing and average rents are softening due to the weaker demand and overhang in supply. ICT accounted for over 50% of take-up between 2019-2021, but this slipped to 21.4% in 2023, the report says. In absolute terms, only 279,862 sq. ft. was leased to technology firms in 2023, a 54% decline on 2022. RTE.ie, 12th February
HEALTHCARE / NURSING HOMES
Sandyford The Beacon Hospital, one of the country’s largest private hospitals which is majority owned by businessman Denis O’Brien, has been acquired by Macquarie, the Australian asset management firm, in one of the largest deals so far this year. Macquarie’s European Infrastructure Fund 7, which has raised €8 billion from investors, has agreed a deal to buy the Beacon Hospital in Dublin for a sum understood to be in the region of €400m to €500m.
Located in Sandyford, Co Dublin, the Beacon Hospital has 181 inpatient beds, 70 day-case beds, eight operating theatres, three Cath labs and four endoscopy suites. The private hospital has grown significantly over the past ten years since Denis O’Brien bought a controlling stake in the group in 2014, with patient numbers trebling and staff numbers doubling.
The hospital treated more than 200,000 patients last year, and currently employs over 1,600 healthcare professionals and over 300 consultants. Last year An Bord Pleanála gave the green light to a €75m eight-storey expansion of the hospital which would deliver 70 new beds as well as other facilities and would involve the substantive demolition of the adjoining hotel which the hospital bought in 2020. Business Post, 13th February
RESIDENTIAL / DEVELOPMENT
Dublin 4 Plans for a 14-storey apartment block have been submitted for the site of 40 Herbert Park. Derryroe Ltd, a company owned by the McSharry and Kennedy families, had in May 2020 applied to An Bord Pleanála for an apartment development on the site at 40 Herbert Park and a number of neighbouring properties. On September 8th, 2020, the board granted permission for the development, including the demolitions, subject to conditions. The complex of 103 apartments and 10 aparthotel bedrooms in blocks up to 12 storeys was granted under the Strategic Housing Development (SHD) process where large-scale residential applications were made directly to the board, bypassing the local authority planning process. The SHD system has since been replaced by the large-scale residential development (LRD) process, a return to the system where applications are made to the local authority, and can be appealed to the board. The 2020 complex remains unbuilt and Derryroe has submitted an LRD to the council seeking to add two more storeys to allow it to develop a 14-storey tower on the site, but the number of apartments will not increase. Irish Times, 12th February
Rathnew Wicklow County Council has given the green light for plans to construct a 352-unit residential scheme for Rathnew despite local opposition. The council has granted permission to Keldrum Ltd for the scheme at Tinakilly, Rathnew after concluding that the proposals would not seriously injure the residential amenities of the adjoining properties or the visual amenities of the area, and would be acceptable in terms of traffic safety and convenience.
The scheme is made up of 220 houses and 132 apartments. Underlining the scale of the residential development, Keldrum Ltd must pay €3.16m in planning contributions towards the provision of public infrastructure as part of the conditions attached to the permission. In one of the conditions attached to the permission, the council has ordered that the first occupation of the dwellings be by individual purchasers only, or those eligible for social housing, and not by a corporate entity. The Irish Times, 12th February
Dublin 12 A firm is proposing a reduction in size of more than one-third to the company’s rejected 113-unit apartment scheme in Dublin 12. The alternative 72-apartment six-storey proposal put forward by Conor McGregor’s Emrajare Ltd to An Bord Pleanála is a 36% decrease on the original eight-storey scheme that was last month subject to a comprehensive rejection by Dublin City Council (DCC). The new proposal is contained in an appeal to An Bord Pleanála against the council’s refusal of the 113-unit scheme.
The appeal, lodged by consultants Tom Phillips + Associates, argues that the grounds for refusal of the scheme are “entirely unfounded” because it constitutes “a wholly appropriate scale and form of development” for the site. The alternative scheme by C+W O’Brien Architects rises from two to six storeys and has 41 fewer apartments. The mixed-use scheme involves the demolition of the Marble Arch pub that McGregor bought for a reported €1.5m to €2m, three years ago. Irish Independent, 12th February
OTHER
BNP Paribas PMI Index Construction activity contracted for the seventh consecutive month in January, but by the smallest amount since October. Housing activity, while reducing further, slowed by the least extent since September, the BNP Paribas Real Estate Ireland Construction Purchasing Managers Index found. “The relative outperformance of residential reflects the strength of the new homes market where consumers benefit from substantial State subsidies and where average prices are rising by more than 10% per annum,” said John McCartney, Director & Head of Research at BNP Paribas Real Estate Ireland.”With the temporary waiver of development contributions due to expire in April, it will be interesting to see whether the strong momentum in residential commencements during 2023 will continue over the coming months, leading to resumed expansion in the housing PMI.”
The weakening of activity in commercial construction also continued but was also much softer than before. “The commercial slowdown is as expected, and understandable in the context of oversupply in office markets particularly,” Mr McCartney said. RTE.ie, 12th February
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