14th February (Issue 83)
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.
RETAIL
Charleville Town Centre: The eight-year old Charleville Town Centre in Co. Cork is on the market through Lisney (under the instruction of receiver Ken Fennell of Deloitte) for €1.9m, significantly less than the c. €20m spent developing it. The centre was completed just before the economic downturn, and has a very high vacancy rate, with 15 of 17 units never having traded. Dunnes Stores and Elverys Sports own their stores, therefore their units will not be included in the sale. The only other trading business, Lloyds Pharmacy, is paying rent of €180k p.a. with another 16 years left on its lease. The remaining units, which are all vacant, extend to 34,767 sq. ft. in total and include a bar / restaurant, a crèche, a medical centre and nine office units. The complex also includes a duplex apartment and a car park with 450 spaces. Lisney will also consider separate offers for the shopping centre and Lloyds pharmacy. The Irish Times, 8th February
19 Wicklow Street: A private Dublin investor has purchased a retail investment at 19 Wicklow Street in Dublin for over €2m, more than €100k above the guide price. The investment attracted 27 enquiries, due to the demand for lower priced retail properties in the south inner city, and its close proximity to Grafton Street. The new owners will collect an initial rent of €103k p.a., before the rent rises to €120k / €130k p.a. from this month, stretching the net yield to c. 5.5%. The building is occupied by Cornucopia, a vegetarian restaurant that has operated out of the property for 30 years, and Louis Copeland. The property has an overall floor area of 3,111 sq. ft. over five levels, including the basement. The Irish Times, 8th February
Stamullen Village Development: A shopping and residential development in Stamullen Village (on the Dublin-Meath border) has been sold for €2.35m, c. 23% more than the €1.9m guide price. The two-storey development was completed in 2006, and is producing a rental income of €242k p.a. from a Centra store, a pharmacy, a beautician and seven overhead apartments, offering the new owner a net initial yield of 9.86%. The retail element of the development produces c. €156k of the overall rent and has a weighted average unexpired lease term of c. 19 years. The Irish Times, 8th February
OFFICE
Credit Suisse Expansion: The Irish Independent reports that Credit Suisse has taken significant steps to increase its presence in Ireland ahead of the March deadline for the UK to begin the formal Brexit process. The company opened a trading floor in Dublin in January 2016, creating 100 jobs. It is understood a further expansion could see the bank more than double its workforce here. The Irish Independent also reports that Ronan Group Real Estate (RGRE) is pursuing Credit Suisse to expand its Dublin presence. The bank’s trading floor is currently located in the RGRE-owned Kilmore House in Spencer Dock, and it is believed that RGRE may offer Credit Suisse a new premises in Spencer Dock which would be capable of accommodating both existing and new employees. The Irish Independent, 12th February
Dublin Office Space: A new report from Savills reveals that pre-lets accounted for 44% of all Dublin office space leased in Q4 2016, with the figure rising to 61% for the in-demand areas of Dublin 2 and Dublin 4. According to Savills, there is sufficient availability of Grade A office space for firms seeking to accommodate around 2,200 workers, however there is increasingly limited choice for occupiers requiring either very large space or very specific locations. The Irish Independent, 13th February
RESIDENTIAL / LAND
Rent Report: The Q4 2016 report by Daft.ie on residential rents reveals that, on a national basis, rents rose by 13.5% in 2016. In Dublin, the annual rate of inflation was nearly 15%, following growth of nearly 4% in Q4 2016. Rents in Dublin are now, on average, c. 14% (over €200) higher than their previous peak in 2008. Nationally, rents have risen by 50% since the bottom of the market in 2011 and are now 7.9% above their 2008 levels. Irish Rental Report Q4 2016, Daft.ie
Property Prices: The December 2016 figures from the CSO on residential property prices show that on average, residential property prices declined by 0.4% nationally and 0.9% in Dublin. While prices decreased in December, the figures highlight that in 2016, prices rose by 8.1% nationally and 5.7% in Dublin. National house prices are still 32.1% below their 2007 peak while Dublin prices are 32.8% below their February 2008 peak. Central Statistics Office, 10th February
St Mary’s Carmelite Seminary: Bidding for the former St Mary’s Carmelite seminary, located on Bloomfield Avenue in Donnybrook, Dublin 4, has reportedly exceeded €16m, €6m above the guide price. The Irish Times reports that an Irish hotelier has emerged as the leading contender to complete the purchase of the well located property, which has also attracted bids from Ballymore Properties, Cairn Homes and Rohan Holdings. If the complex, which extends to 35,000 sq. ft. on a 3.09-acre site, is acquired by the hotelier, it is expected that it will accommodate a 200+ bedroom hotel. If the purchaser is a housebuilder, it is expected that permission would be sought for at least 100-120 homes. The Irish Times, 8th February
Mortgage-To-Rent Scheme: A proposed extension of the mortgage-to-rent scheme, which has so far seen poor take up, will allow private finance houses to buy mortgages of struggling families and lease the properties back to the state. Under the new scheme, the families in the properties will then become the State’s tenants with a guaranteed 20-year lease, and the families will have an option for a further 20 years. It is understood that families will also be able to buy back their homes at the market rate at any time. It is hoped that thousands of households will avail of the scheme, despite only 217 households having gone through the process since it was launched. Under the exisiting scheme, cases are assessed on an individual basis, meaning it was not attractive for finance houses to become involved. It is believed that private funds may examine bank’s loan books to see who would possibly qualify for the scheme before deciding to purchase loans. It will however ultimately be the homeowner’s decision to enter the scheme, which has a number of qualifying criteria. The new scheme will also see the value of the threshold for qualifying houses increased, depending on the location and type of house. The Irish Times, 8th February
Mounteagle House: A four-bedroom house, situated on a one-acre site in Sandyford with strong redevelopment potential has been put on the market with a €2m guide price by Lisney. Mounteagle House in Dublin 18 extends to 1,991 sq. ft. and is located minutes from Sandyford village, Beacon Hospital and Leopardstown Racecourse. The site has the potential to accommodate a higher density residential scheme, subject to relevant planning permission being obtained. The Irish Times, 8th February
Deposits-to-value ratio: New analysis from the Central Bank shows that home buyers in Ireland typically need a 20% deposit to acquire a property, which is lower than the corresponding figure in many other European countries. The figures show that first time buyers (FTBs) in Ireland last year typically needed a c. 15% deposit to purchase a home. The median down-payment for a FTB outside of Dublin in 2016 was €25k, well below previous peaks. However, for FTBs in Dublin the figure was €50k in 2016. The Irish Times, 8th February
Templeogue site: A 1.13 acre ready-to-go site near Templeogue village in Dublin 6W has been offered by agents CBRE with a guide price in excess of €3.45m. The site comes with permission to demolish the existing buildings and replace them with 16 family homes. These include four four-bed end-of-terrace homes, four three / four-bed mid-terrace homes, and eight four-bed semi-detached homes. The site is located about 1.5km from Terenure village and 6km from the city centre, with good amenities in the local area. The Irish Times, 8th February
Landlord Insurance: A new product offering from RentAssured will offer Irish landlords the ability to insure themselves against the loss of rent from defaulting tenants. RentAssured will insure the lesser of (i) €48k or (ii) 11 months of annual rental income. The average premium will be c. 2% of rental income. The Irish Times, 13th February
OTHER
South Dublin Investments: Agents HWBC has brought two investment opportunities in Dublin’s southside to the market. The first consists of three adjoining cut-stone period buildings at Eglinton Terrace in Dublin 14 which have a combined guide price of €2.6m. The properties, known as the Taney Buildings, were formerly a church, school and schoolmaster’s house, extend to 6,740 sq. ft. in total and include seven car-parking spaces. The second opportunity is a listed period office at Ventour House, 1 Corrig Avenue, just off Dún Laoghaire’s main street which has a €1.5m asking price. Ventour House extends to 3,500 sq. ft. and comes with eight parking spaces. In addition to its existing use, the property could also be converted back to residential use, subject to planning permission. The Irish Times, 8th February
Lough Derg Marina: CBRE is guiding in excess of €2.5m for the 50-berth Cloondavaun Bay Marina, located near Portumna, Co. Galway. The marina is located on a 20-acre site with 885m of lake frontage, and contains a range of other services including a storage warehouse for large boats, a facilities building, a work shop, fuel depot, ancillary offices, store rooms and a large detached four-bedroom house. The Irish Times, 8th February
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