15th September (Issue 12)
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
National Portfolio: Bank of Ireland’s National Portfolio is expected to trade for above €162m as four second round bids were received on September 9th. The portfolio consists of five retail parks with the prized asset being Nutgrove Retail Park in Rathfarnham, South Dublin, which has an asking price of over €62m. The bidders are a JV between Tristan Capital Partners and Pradera, Oaktree Capital Management, Benson Elliott and Davidson Kempner alongside minority partner Alanis Capital. The portfolio generates gross income of c. €12.2m and has a weighted average unexpired lease term of c. 10 years. A sales price in excess of €162m would offer a net initial yield below 7.2%. CoStar Finance, 10th September
Project Arrow: Goldman Sachs and CarVal are believed to have withdrawn their interest in NAMA’s €7.2bn par value Project Arrow, leaving Cerberus and Apollo as the remaining bidders. The reason for their withdrawal is unclear. NAMA chose the three finalists for the portfolio a little over two weeks ago. Lone Star may request to re-enter the bidding process. CoStar Finance, 10th September
Hazel Portfolio: DTZ and Bannon have been retained by NAMA to manage the sale of the Hazel portfolio, with offers in excess of €115m being sought. The portfolio consists of Wilton Shopping Centre in Cork, Drogheda Retail Park in Meath and the Gateway Retail Park in Galway. Wilton is valued at c. €70m, Drogheda at c. €30m and Gateway is worth in excess of €15m. Based on a net operating income of c. €8.97m, a sale at €115m offers a net initial yield of 8.97%. The portfolio also boasts a low vacancy rate of 2.1% and a weighted average unexpired lease term of 9.11 years. First round bids are reportedly due in the third week of October. CoStar Finance, 9th September
OFFICE
Millennium Park: The Irish Times has learned that Tetrarch Capital is to seek planning permission for a substantial residential and commercial development at Millennium Park in Co Kildare. Tetrarch purchased 336 acres of the park from NAMA earlier this year for c. €36m. It is believed that Tetrarch will initially seek permission to construct c. 50,000 sq. ft. of office space, followed by an application early next year to construct over 400 houses. Tetrarch are currently receiving income of c. €1.62m p.a. from the site, which has a vacancy rate of c. 6%. The Irish Times, 14th September
IPUT Office Space: Investment fund IPUT intends to supply Dublin with c. 400,000 sq. ft. of office space over the next three years. The news comes at a time when some analysts predict that prime rents could rise up to €70 psf over the next twelve months. The office space is to come from the newly refurbished 7 Hanover Quay in Dublin 2, which contains 68,000 sq. ft. of office space, as well as five other properties which IPUT are currently developing or refurbishing. These properties are located at St Stephens Green, Dawson Street, 10 Molesworth Street and Citywest. 7 Hanover Quay was previously the European headquarters of Facebook. The Irish Independent, 11th September
Lower Baggot Street: Knight Frank are set to launch an international marketing campaign later this month seeking tenants for Bank of Ireland’s former headquarters on Lower Baggot Street, Dublin 2. The property has undergone a significant redevelopment in recent years at a cost of c. €100m since it was purchased by Larry Goodman’s Parma Developments for c. €40m in 2013. Once the project has been completed there will be c. 219,000 sq. ft. of lettable space along with 125 underground car spaces. Market sources estimate that the rent for property will be c. €60 psf given the €100m redevelopment spend. The Irish Times, 9th September
HOTEL
Dalata Gresham Hotel: The chief executive of Dalata, Pat McCann, advised that his firm would be interested in purchasing the Gresham hotel should it fit their investment criteria. McCann believes the hotel, which was built in 1817 and has in excess of 300 rooms, will be on the market for a price “somewhere north of €60m”. Dalata are also expected to bid for the Pillo Hotel in Meath and the Clarion in Sligo should they be for sale this year, as they currently manage the hotels on behalf of receivers. Dalata spent nearly €524m on hotel acquisitions in H1 2015. Irish Independent, 10th September
Hotel Sales: With 50 hotels sold for a combined value of €795m in the first eight months of 2015, it is believed that hotel sales may exceed €1bn in 2015. The most expensive sale was the combined purchase of the Ballsbridge and Clyde Court hotels for c. €175m by Chartered Land / ADAI. While this transaction would be categorised as a development deal, the fact that average room rates in Dublin are €174 a night this month (per Trivago) could make the existing 600 bedrooms more remunerative in the short to medium term. Although rates have risen in the past few months, it is believed that they are only now starting to reach levels which would justify the construction of a new hotel. The Sunday Business Post, 13th September
RETAIL
Wexford Portfolio: Offers in excess of €6.75m are being sought by DTZ Sherry Fitzgerald and Sherry Fitzgerald Haythornwaite for a substantial mixed use portfolio in Wexford town. The property includes a six storey building which contains 73 apartments and three retail units. The main retail tenant is TK Maxx, who are paying 5% of turnover as rent for 28,148 sq. ft. of retail space, believed to be worth c. €250k per annum. Other assets of note in the portfolio include a 314 space multi storey car park and a 28,000 sq. ft. former grain store which has undergone significant refurbishment in recent years. The Irish Times, 9th September
RESIDENTIAL
Capital Dock Project: Kennedy Wilson have sought planning permission for a 23 storey apartment tower on Sir John Rogerson’s Quay in Dublin 2, which would make it the tallest building in Ireland. The tower is part of their €200m Capital Dock project, which is a joint venture with NAMA. Kennedy Wilson previously sought planning permission for a 19 storey tower on the site however this was rejected by Dublin City Council. The revised planning application comprises seven blocks, 204 apartments, 313,000 sq. ft. of office space and retail units. The Sunday Times, 13th September
Dublin Student Accommodation: Global Student Accommodation and The Creedon Group have been granted planning permission for a €41m student housing complex on a 2.5 acre site in Mill Street, Dublin 8. The complex is to consist of five blocks containing study bedrooms and student community spaces. GSA is to both finance and develop the complex, which is expected to open in September 2017. Although this will be GSA’s first development in Dublin, the firm intends to invest up to €250m here over the next five years given the acute shortage of student accommodation in the capital. The Irish Times, 11th September
Malahide Apartments: Knight Frank are guiding c. €7.5m for 27 apartments at the Robswall development in Malahide, Co. Dublin. The property consists of one, two and three bed penthouse units which range from 603 sq. ft. to 1,313 sq. ft. in size. There is scope to increase the current rental income of c. €400k p.a. to c. €460k p.a. once all the units have been fully rented and rents are increased to market rent. The €7.5m guide price equates to a cost per sq. ft. of €325. The Irish Independent, 10th September
Mount Merrion Site: DTZ Sherry Fitzgerald are guiding €23m for an 18.4 acre site known as Knockrabo in Mount Merrion in Dublin 14, which should accommodate up to 170 houses and apartments. Over 5 acres of the site have been reserved for a future extension of the Eastern Bypass, leaving c. 13.3 acres of residentially zoned land. There is already planning permission for 47 houses and 41 apartments on the site. DTZ anticipate significant demand given the size and location of the site. The Irish Times, 9th September
OTHER
Events Centre: Work is expected to commence shortly on a new €50m events centre at the site of the old Beamish and Crawford Brewery in Cork City. A consortium consisting of Heineken and BAM were awarded the contract to undertake the project in 2014. The 6,000 seater events centre is to be the crown jewel of the €150m Brewery Quarter project. The state is to provide funding of €20m towards the project, which will support 900 direct jobs upon completion. The Irish Times, 14th September
Shannon Free Zone: The first phase of a major redevelopment project has commenced at Shannon Free Zone in Co. Clare. The phase is valued at €21m and will take approximately two years to complete. A planning application is expected to be lodged shortly to develop a 40,000 sq. ft. Grade A office block and a 30,000 sq. ft. advanced technology manufacturing unit on a 12 acre site. There is another 67,000 sq. ft. advanced technology manufacturing unit included in the first phase at Shannon Free Zone East. The project is being run by the Shannon Group, an entity formed last year with the objective of growing traffic through Shannon Airport. The Irish Times, 9th September
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