14th June (Issue 50)
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
Projects Emerald and Ruby: The Irish Times reports that Oaktree has been chosen as the preferred bidder for NAMA’s Projects Emerald and Ruby. The loan portfolios have a combined par value of €4.7bn and consist of 31 borrower connections. The amount which Oaktree bid for the portfolios has not been revealed, however it is understood to be substantially below the par value. Cerberus and Lone Star had also bid for the portfolios. The Irish Times, 10th June
RETAIL
McGowans Churchtown: A site which was previously home to McGowans pub in Churchtown, Co. Dublin is to be redeveloped into five retail units. The first two units have already been let. Rents of €100k p.a., €55k p.a. and €20k p.a. are being sought for the remaining three units, which have floor areas of 2,895 sq. ft., 1,356 sq. ft. and 312 sq. ft. respectively. Work has already commenced on the site (owned by MM Capital) and the completion date targeted is May 2017. McGowans sold for €16m in 2007. The Irish Times, 8th June
Bridgewater Shopping Centre: The Irish Times has reported that Goldman Sachs has acquired Bridgewater Shopping Centre in Arklow, Co. Wicklow from Cerberus in an off-market deal for €33.25m subject to the approval of the Competition Authority. The centre is anchored by Dunnes Stores and Omniplex Cinema (who each own their stores), and has a rental income of €2.9m equating to a net initial yield of 8.35%. The Irish Times, 11th June
SV4 Collection: The Sunday Independent reports that German Investment fund Patrizia is believed to have agreed a sale with the consortium of Starwood Capital, Key Capital Real Estate and Catalyst Capital for Lucan Shopping Centre (anchored by SuperValu) for in excess of the €40m asking price marketed by Savills. The Shopping Centre is one of the four assets in the SV4 Collection. Two other SuperValu stores at Ranelagh and Rathgar which are part of the SV4 Collection are also understood to be sale agreed to Patrizia for more than €12m each. The Sunday Independent notes that Industry sources believe that the three properties sale agreed are likely to sell at a yield of less than 5% indicating a sales price of close to €70m. The remaining Shopping Centre asset in the SV4 Collection in Waterford is yet to sell. The consortium of investment firms originally acquired the four assets from NAMA as part of the Project Aspen portfolio. The Sunday Independent, 12thJune
OFFICE
Portview House: Lisney is inviting offers of €2m for a portion of the first floor and three underground car spaces in Portview House, which is located on Thorncastle Street in Ringsend, Dublin 4. The floor space extends to 3,875 sq. ft. and is let to Stratgem and Cybercom, who occupy the unit under a 21 year lease from 2004. There are no break clauses in the lease and the next rent review is in 2022. With the current rental income for the investment at €150k p.a., the purchaser will achieve a net initial yield of 7.2%. The Irish Times, 8th June
Dublin City Centre Office: Tetrarch Capital has completed the sale of its Harp portfolio comprising of four Dublin City Centre offices in Dublin 1 and 7. The Sunday Business Post reports that a private Irish investor is believed to have paid c. €27m for the office buildings originally acquired by Tetrarch Capital in Q4 2013 as part of the Bank of Scotland (Ireland) Ulysses portfolio. The guide price set by joint agents JLL and CBRE was in excess of €28.5m. The Harp portfolio has a WAULT of c. 8 years and produces annual income of €2.37m (98% of rental income is from government tenants) equating to a net initial yield of 8.4%, and a capital value of c. €310 psf. The Sunday Business Post, 12th June
HOTEL
Farnham Golf and Spa Resort: Savills is guiding over €26m for the Radisson Farnham Golf & Spa Resort in Co. Cavan. The sale price represents a significant discount on the c. €80m spent purchasing and developing the hotel over the last 15 years. The 158-bed hotel sits on a 1,200 acre estate and is generating a profit of c. €2m p.a. The hotel is being sold under the instruction of the receiver Crowe Horwath, who was appointed by NAMA. While the Radisson Group currently operate the hotel, it is possible to acquire the hotel with no management company in situ.The Irish Times, 8th June
Q1 2016 Review: DTZ Sherry Fitzgerald’s review of the hotel market in Q1 2016 shows that €65.9m was spent across 17 hotel transactions in the quarter. Interestingly, only two of the transactions were completed in Dublin. The most expensive hotels purchased were the Tara Towers Hotel (€13.1m) and the Clarion Hotel Sligo (€13.1m). Dalata was the acquirer of both of these hotels. The outlook for the remainder of 2016 is strong with the sale agreed for €61m worth of hotel assets. The development pipeline also boasts a favourable outlook, with c. 7,600 rooms speculated for development within the next three years. 6,100 of these rooms are in Dublin. DTZ Irish Hotel Market, Q1 2016
RESIDENTIAL / LAND
Canon Hall: Joint agents Lisney and Hooke & MacDonald have set an asking price of €9.5m for Canon Hall, an apartment block in the north Dublin docklands. The complex was developed in 2008 and consists of 36 apartments, one retail unit and 34 car spaces. The 36 apartments are made up of 9 one-beds, 25 two-beds and 2 two-bed penthouses. While the current rental income of the complex is c. €523k p.a., the selling agents project the market rent at c. €655k p.a. The Irish Times, 8thJune
Alexander Court: Savills is guiding in excess of €8m for Alexander Court, which is located at 25 Upper Pembroke Street in Dublin 2. The five-storey over basement property is currently being used as student accommodation with 23 apartments, however planning permission was granted in 2015 to convert the property into an aparthotel or serviced apartments. The property has a floor area of 20,850 sq. ft., however this can be extended to 23,280 sq. ft. (46 units) under the approved application. Rear access to the property is available from Stable Lane. The Irish Times, 8th June
Dublin Rents: The Q1 2016 Residential Tenancies Board (RTB) report on residential rents shows that renting a house in Dublin is now more expensive than it was at the peak of the market. In Q1 2016 the average monthly rent for a house was €1,454, which was 0.2% higher than the cost of renting a house in Q4 2007. Rents for houses and apartments in Dublin increased by 0.6% and 0.4% in Q1 2016, and are now 8.4% and 8.1% higher than they were in Q1 2015. On a national basis, residential rents rose by 8.6% in the past 12 months. The Irish Times, 9th June
First Time Buyers (FTBs): A new survey from the Real Estate Alliance (REA) shows that the average age of FTBs has increased by 5 years in the past decade. The average age of FTBs is now 34, up from 29 in 2006. The increase comes despite the fact that property prices are now c. 33% cheaper than they were in 2006. REA cited the introduction of the Central Bank’s mortgage lending rules and higher rents as factors preventing people from getting on the property ladder. The Irish Independent, 7th June
Arrears & Repossessions Figures: The Central Bank has released its Q1 2016 report on mortgage arrears and repossessions. The total number of mortgage accounts in arrears for principal dwelling houses (PDH) at the end of Q1 2016 was 85,989, a c. 2.6% decrease on the Q4 2015 figure. The number of buy-to-let (BTL) accounts in arrears was 27,891, a c. 3% decrease on Q4 2015. At the end of Q1 2016, there was a total of 743,700 PDH loans outstanding (€100.9bn debt value). The total number of BTL mortgages outstanding was 136,295 (c. €25.6bn). A total of 421 PDH and 302 BTL properties were taken into possession by lenders during Q1 2016. Central Bank Residential Mortgage Arrears and Repossessions Statistics: Q1 2016
Government Housing Strategy: The Irish Independent has issued details of some of the proposals which Housing Minister Simon Coveney is considering including in his housing strategy, which is to be published next month. To reduce the time involved in the planning application process for large scale projects, Minister Coveney is considering bypassing local councils and allowing these applications to go straight to An Bord Pleanála. Minister Coveney may also set up a Special Delivery Unit, where project managers will oversee projects from start to finish. Minister Coveney has pledged to deliver 25,000 homes each year while in government. The Irish Independent, 10th June
INDUSTRIAL
Naas Road: CBRE is guiding over €4m for the former HQ of Electrolux on the Naas Road in Dublin 12. The 92,130 sq. ft. property sits on a c. 4.7-acre site and consists of a warehouse and two-storey offices. The Irish Times, 8th June
OTHER
Cork Data Centres: JCD Group has unveiled its plans to develop a number of data centres in Little Island, outside Cork City. Over €200m is to be spent developing more than 275,000 sq. ft. of space on a 32-acre site. Planning permission is expected to be granted within a few weeks. Cork is viewed as an attractive site after Hibernia Network placed a transatlantic cable there in 2015. With this cable now in place, Cork now offers the lowest latency in the EU to the east coast of the US. The Irish Times, 10th June
Grianán Estate: The Donegal Investment Group plc (formerly Donegal Creameries) has retained Savills to secure a buyer for Grianán Estate in Co. Donegal. The 2,400-acre property is one of the most substantial organic farms in Europe and has been generating an income of between €400k and €500k p.a. in recent years. Approximately 400 acres are let to a milk producer on a 25 year lease from 2008. The milk producer also has exclusivity over another 400 acres of the property on a rotation basis. The Irish Times, 8th June
Dublin Mountains Land Bank: 4,900 acres (1,983 hectares) of mostly moorland and mountain land in the Dublin Mountains is being offered for sale by CBRE on behalf of NAMA with a guide price of €2.5m. The land bank is mainly on the Dublin-Wicklow border within 15km of Dublin City Centre and 3km south of Tallaght. The Irish Times states that CBRE acknowledges that the development potential of the land bank is “very limited” and confined to 39.5 acres in the low lying lands. It also suggests that 178 acres in the upper lands have some development potential but are of limited use and subject to strict planning guidelines. The Irish Times, 8th June
Construction Output: Economic consultants DKM expects Irish construction output to increase by 14.4% to over €14bn in 2016, and by 16% in 2017 and 7.4% in 2018. DKM noted that an estimated 10,133 homes were built in 2015 with about 11,000 expected to be made available in 2016 and 20,000 by 2018. The Sunday Independent, 12th June
NAMA Annual Report 2015: NAMA released its 2015 Annual Report on 8th June. It reported a net profit after tax of €1.8bn with €1.6bn profit derived from disposals of loans and property assets. €85m of the profit came from writebacks of loan impairment provisioning. NAMA Annual Report and Financial Statements 2015
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