15th November (Issue 72)

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.




Skerries Point Shopping Centre: Offers of €3m are being sought by Savills for Skerries Point Shopping Centre in north Dublin. The centre extends to 68,682 sq. ft. and has parking at basement level for 200 cars. The current rental income of the centre is c. €335k p.a. and the current tenants include EUROSPAR, Boylesports and Well Fit Health and Fitness. The weighted average unexpired lease term is c. 6.5 years. Almost 60% of the floor space in the centre is currently vacant, offering the buyer the opportunity to increase the rent roll significantly. In addition, a new housing development adjacent to the centre is due to be developed in 2017 and will include 100 homes. The Irish Times, 9th November

Drury Street: A former wholesale fashion outlet at 46 Drury Street in Dublin 2 has been put on the market for €2.5m through estate agent Eoin Conway. The three story red-brick building is likely to be of interest to both property investors and restaurateurs. The building has been owned for the past 17 years by a family in the fashion business, who acquired the building for c. €1.143m. The Irish Times, 9th November

Castle Market: Two interconnecting restaurant properties on Castle Market in Dublin city centre have been sold for more than €2m to an unidentified purchaser. Numbers 4 and 5 Castle Market had been guiding €1.75m, however strong competition amongst bidders meant that the property eventually sold for well above the guide price. The current tenant Jo’Burger pays rent of c. €120k p.a., offering the new owner a net yield of c. 5.97%. Jo’Burger occupy the three-storey, 2,000 sq. ft. properties under a 20-year lease. The Irish Times, 9th November



Dublin Office Developments: According to a new report by Savills Ireland, 136 office buildings with a combined floor area in excess of 12m sq. ft. are being planned for Dublin over the next five years. If completed, the new buildings will have capacity to accommodate more than 100,000 workers. Savills acknowledge that not all buildings being planned will come to fruition, however it states that if 50% of the planned projects are delivered, there would be sufficient capacity to cope with the potential demand from UK companies seeking to relocate operations as a result of Brexit. The report notes that 39 new developments are currently under construction, 13 of which have pre-commitments from tenants to take space. A further 62 developments have planning permission but work has yet to commence, while the remaining 35 are in the planning stages. The Irish Independent, 10th November

Hibernia REIT: Last week Hibernia REIT published its half-yearly results for September 2016. Most notably the value of its portfolio, which consists primarily of central Dublin office space, has risen above €1bn for the first time. The group also recorded a pre-tax profit of c. €32.4m for the period, although this was well below the c. €73.7m profit recorded for the same period in 2015. Hibernia had debt outstanding of c. €110.5m at the end of December, representing a loan-to-value of c. 10.7%. According to the chief executive Kevin Nowlan, the company still has c. €300m available to fund future acquisitions. The Irish Times, 10th November

Pottery Business Centre: Pottery Business Centre in Dún Laoghaire , south Dublin has been brought to market through agent CBRE, who is guiding €2m for the property. The four-storey, 45,576 sq. ft. office complex is split between 19 fitted office suites (20,980 sq. ft.) and unfitted office space (24,596 sq. ft.). The complex also includes 100 car spaces. Only three of the suites are let at present, generating rental income of c. €56k p.a. The Irish Times, 9th November



Dublin Development: Chesway Ltd, which is linked to hotelier Frankie Whelan, has sought planning permission from Dublin City Council for a 40-bedroom hotel at 22 Harcourt Terrace. The property is a former nursing home located at the junction of Adelaide Road and Harcourt Terrace. Mr Whelan advised the Irish Times that he intends to market the property as a premium four-star hotel, targeting corporate clients midweek and the leisure market at the weekend. The proposed development involves a single-storey extension to the front and side of the property, an extension on the first floor and internal modifications. Chesway purchased the property for c. €4.6m. The Irish Times, 14th November

Camden Complex: Joint agents CBRE and Morrissey’s are inviting offers of over €8m for the Camden Deluxe Hotel and Entertainment Complex on Lower Camden Street in Dublin. The 42,000 sq. ft. hospitality complex contains a variety of attractions including a 35-bedroom hotel, Planet Murphy’s bar and snooker hall and the Palace nightclub. The property occupies a site of 0.42 acres in a conservation area, and is zoned Z4 under Dublin City Council’s Development plan “to improve mixed service facilities”. The Irish Times, 9th November

Cork Hotel: Carra Shore Ltd is proposing to develop a new 146-bedroom hotel on South Terrace in Cork city centre. If planning permission is granted by Cork City Council, the hotel would be spread across three Georgian houses at 31, 32 and 33 South Terrace. Carra Shore Ltd is affiliated with the Seraphine Hotel Group, the London-based hotel operator. The Evening Echo, 14th November



Roslyn Park: The Department of Education (DoE) has completed the purchase of the Rehab Group’s Roslyn Park complex in Sandymount, Dublin 4. The DoE is believed to have paid over €20m for the complex, more than €8m above the guide price. Roslyn Park extends to 5.16 acres and the main property on the site is a period house which was designed in 1790. The DoE is expected to place two schools on the property, subject to planning permission. It is reported that Shellybanks Educate Together primary school will seek to move to Roslyn Park as one of the schools. The Irish Times, 9th November

Mortgage Interest Rates: New figures from the Central Bank show that the weighted average interest rate on new mortgage agreements was c. 3.43% in September 2016, representing a decrease of 24 bps YoY. This rate is still substantially above the Euro Area rate, which was c. 1.78%. The weighted average interest rate on new variable rate mortgage agreements was c. 3.41%. Variable rate mortgages account for just under two-thirds of all new mortgage agreements. Central Bank of Ireland, Retail Interest Rates – September 2016

Daft Q3 2016 Rent Report: The Q3 2016 report on the Irish rental market by Daft.ie shows that on a national basis, annual rental inflation is now c. 11.7%, the highest reading recorded since Daft.ie began compiling data in 2002. National rents rose by c. 3.9% in Q3 2016, with rents in Dublin rising by a similar percentage. The number of properties available to rent also continues to fall, with less than 3,700 homes available to rent on October 1st 2016. This represents a decrease of c. 12% when compared to the same date in 2015. The Daft.ie Rental Report, Q3 2016

Build-To-Rent Sector: According to market sources, pension funds such as AIG, Allianz and at least three German funds are seeking to invest over €2bn in build-to-rent developments in Dublin. It is expected that these funds will be interested in funding the development of c. 1,500 apartments in Cherrywood, south Dublin. The Sunday Times, 13th November

Neville Group: The Neville Group will commence building c. 500 homes in Cherrywood, south Dublin, in 2017. The group has capacity to build c. 3,000 homes in Cherrywood, where it is in a JV with Hines, who owns the development land. The group has also spent c. €10m on hotels in recent years and will look to add more hotels to their portfolio, should suitable investments arise. The Sunday Business Post, 13th November

Celbridge Site: REA Coonan is guiding €2.7m for a four-acre site on Ardclough Road in Celbridge, Co Kildare. The site is zoned for “new residential” and can either be purchased in one lot or alternatively at €675k per acre. The Irish Times, 9th November



Ballymount Industrial Estate: An unnamed investor has paid c. €6.75m (c. €500k over guide) for two industrial units on a 3.4-acre site on the Lower Ballymount Road in Dublin. The first unit is let to Smurfit Paper Snacks Ltd, however the lease is guaranteed by Smurfit Packaging Corporation Ltd. Smurfit occupy the 59,500 sq. ft. unit under a 25-year lease from August 2005. Smurfit is paying a rent of c. €619k p.a. The second unit on the site extends to 27,000 sq. ft. While this unit is currently vacant, it should achieve rental income of c. €94.5k p.a. The units were developed in the 1970’s. The Irish Times, 9th November


Dún Laoghaire Ferry Terminal: Lisney is seeking rents of €10 psf for a disused ferry terminal in Dún Laoghaire, south Dublin. The terminal extends to 75,000 sq. ft. and includes 4,951 sq. ft. of offices and a first floor restaurant. The ferry terminal was built to facilitate Stena Line’s HSS service to Holyhead, which ran from 1995 to 2015. The decision to lease the terminal follows the recent granting of planning permission by An Bord Pleanála for a c. €18m cruise ship berth in Dún Laoghaire Harbour. The Irish Times, 9th November


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