15th December (Issue 25)

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 Clear: Following the announcement last week that a JV between Cairn Homes and Lone Star was chosen as the preferred bidder for Ulster Bank’s Project Clear, a number of failed bidders are reportedly unhappy with the conclusion of the bidding process. Their argument centres on the fact that the JV between Cairn Homes and Lone Star wasn’t formed until late in the bidding process. The JV was formed after Cairn Homes made it to the final round with their initial offer and Lone Star were unsuccessful. The JV was chosen as the preferred bidder following their bid of €503m. Underbidders included Michael O’Flynn, Bartra Capital and Cerberus. The Sunday Independent, 13th December



Harcourt Street: An unnamed group of investors have paid over €18m for a block of Georgian houses at 72 – 74 Harcourt Street in Dublin 2. The purchase price is c. €3m above JLL’s €15m guide price. The four storey over-basement block has an overall floor area of 35,000 sq. ft. with floor plates ranging from c. 6,000 sq. ft. to 8,000 sq. ft. There are also 50 car spaces available. While the property may suit as a hotel or office block, further capital investment will be required before it is fit for either purpose. A complete refurbishment of the property for office use would cost c. €120 – €150 psf, but should generate rents of c. €45 psf upon completion. The Irish Times, 9th December



Ashford Castle: Following the completion of a €45m refurbishment, the five star Ashford Castle is projecting a return to profitability in 2016 following a loss of c. €4m in 2014. The refurbishment was undertaken by the owners, Red Carnation Hotels, who acquired the 350 acre estate in 2013. Work completed on the hotel included the replacement of each of the 820 windows and the installation of a new roof, spa and cinema. Despite being closed for a number of months in 2014, the hotel reported revenue of c. €9m. The Irish Independent, 12th December
Castleknock Hotel: FBD Property and Leisure Ltd has sought planning permission for a €5.5m expansion and refurbishment of the Castleknock Hotel and Country Club in Castleknock, Dublin 15. The proposal seeks to add 43 bedrooms and three suites to the four star hotel, which would bring its capacity up to 190 rooms. The expansion will also see the development of a new leisure centre which will have its own entrance. FBD owns two other hotels in Ireland; Faithlegg House Hotel and the Tower Hotel, both of which are in Waterford. The Irish Times, 9th December



Nassau Street: Investment fund Meyer Bergman, fund manager BCP and developer Eamonn Duignan are to join forces to develop a number of large retail stores in Dublin city centre designed for international fashion retailers. The stores will be located in Nassau House and the adjoining buildings in Dublin city centre. Nassau House was purchased by Meyer Bergman earlier this year for €90m and currently produces annual rental income of €3.5m. There is also 80,000 sq. ft. of office space which may be redeveloped or extended. While BCP may hold up to 33% of the new venture, Meyer Bergman will hold the majority stake. Eamonn Duignan will be responsible for managing the development of the project. The Irish Times, 9th December



Dublin Development: Crekav Landbank Investments Ltd, which is led by developer Greg Kavanagh, is expected to lodge a planning application for 340 apartments in west Dublin later this week. The application will propose that the apartments are built over eight blocks in Carriglea Industrial Estate between Drimnagh and Bluebell. Each of the one, two and three bed apartments is designed to be larger than the current minimum size requirements necessary under the Dublin City Development plan. The Irish Times, 14th December

O’Flynn Construction: Developer Michael O’Flynn is set to focus on purchasing Dublin land banks after missing out on Ulster Bank’s Project Clear. O’Flynn recently secured €400m of funding from Avenue Capital and AIB, with the funding to be used to part finance the development of 10,000 homes over the next decade. O’Flynn already has enough land to develop 5,000 houses, the majority of which are located in Cork. The Sunday Independent, 13th December

Student Accommodation: A JV between US fund Harrison Street Real Estate Capital and London-based GSA Investment Management is set to invest as much as €250m in Dublin over the next five years developing student accommodation. Work has already commenced on their first project, a 400-bed development on a 2.5 acre site on Mill Street in Dublin 8. Harrison has already invested c. USD$4.4bn in the US, developing c. 60,000 beds. The Irish Independent, 11th December

Mortgage Arrears: The latest figures from the Central Bank on mortgage arrears show that the number of accounts in arrears for more than 720 days has fallen for the first time, with a 2% decrease to 37,269 recorded at the end of Q3 2015. The total number of accounts in arrears also fell to 92,291, the ninth successive quarterly decline. Accounts in arrears represent 12.3% of the total mortgage market, which has an estimated value of €102.5bn. The Irish Times, 11th December

Rental Market: The Private Residential Tenancies Board’s latest report shows that renting a property in Dublin now costs just €30 less than it did at the peak of the market in 2007. At the end of September 2015, the average cost of renting a house in Dublin was €1,408 (9.3% increase over the previous 12 months), while the cost of renting an apartment was €1,265 (8.2% increase). On a nationwide basis, the average cost of renting a home was €901 (8.6% increase). The Irish Times, 10th December

Cork Development: Cork City Council has granted an extension of planning permission for a scheme of over 250 units in Bishopstown, Cork. The application proposes the development of 119 apartments over three blocks and 133 houses on a 20 acre site. The extension of the original approval was sought by receivers Jim Luby and Tom Rogers, who have been appointed over the assets of John and Elaine Barry. The Irish Examiner, 10th December



Allsop’s Auction: The final Allsops auction of 2015 saw the sale of 178 properties for nearly €34m. One of the most expensive assets sold was Meakstown Shopping Centre in Finglas, Dublin 11, which sold for over €3m. There was also a number of multi-unit properties sold at the auction, with the most costly being a nine-unit residential building on Upper Rathmines Road, Dublin 6, which sold for €1.069m, €240k over reserve. The Sunday Business Post, 13th December

Bartra Capital: Former Treasury Holdings co-founder Richard Barrett has established a new €2bn investment fund, Bartra Capital. The fund is expected to target investment opportunities in the Irish property, healthcare and renewable energy sectors. Financing has been secured from a number of sovereign wealth, family wealth, insurance and pension funds, with Barrett also providing a substantial investment. The fund will operate under the new Irish Collective Asset-management Vehicle structure, which offers a favourable tax structure to certain overseas investors. The Sunday Business Post, 13th December



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