16th January (Issue 430)
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.
HOSPITALITY
St Stephen’s Green, Dublin 2 Archer Hotel Capital, a European investment group, is closing in on a deal to buy the landmark five-star Shelbourne hotel in Dublin. The Sunday Times reported in December that Kennedy Wilson, the Shelbourne’s current owner, was mulling over a sale of the hotel for €260m or a disposal of a 50% share in the property. It is understood that Archer, which owns the nearby five-star Conrad hotel, has agreed to buy the Shelbourne outright. It paid in excess of €115m in 2019 for the Conrad, which is located opposite the National Concert Hall on Earlsfort Terrace in Dublin. The Sunday Times, 14th January
Booterstown, South Co Dublin The Radisson Blu St Helen’s Hotel has been put up for sale and could fetch €45m, the Business Post understands. The historic property, located in Booterstown, is ultimately owned by the Cosgrave family of property developers. The potential sale is being conducted privately and handled by real estate company JLL Ireland, according to sources. The hotel was developed by Dublin builders The Cosgrave Property Group and a €6m refurbishment was carried out in 2018. There are 125 bedrooms in the hotel, which is located approx. 10 minutes from Dublin city centre, and 18km from Dublin International Airport. It has 11 event spaces, which can hold up to 350 guests. The Business Post, 14th January
Deloitte Report Hotel room rates in Ireland have continued to rise, but the prices don’t yet appear to be deterring consumers. A report on Europe’s hotel sector from Deloitte shows that the average daily room rate in Dublin city centre for the first ten months of 2023 was €210. In the surrounding Dublin area, it was €165 and in the rest of Ireland it was €160. Occupancy levels in the period were robust, at 85% in the surrounding Dublin area, 83% in the capital’s city centre, and 77% in regional hotels. In Dublin centre, occupancy is only slightly below the pre-pandemic 2019 average, while elsewhere it has surpassed pre-Covid rates, noted Deloitte. There were approx. 66,000 hotel rooms available in Ireland as of the end of September 2023, and a further 3,500 rooms under construction according to Deloitte Real Estate Research. Deloitte noted that large international brands have been entering the hotel market. New hotels such as the NYX hotel in Dublin and the CitizenM property in the capital, as well as the Moxy Hotel in Cork have all opened or are opening. The Irish Independent, 15th January
RETAIL
Tallaght, Dublin 24 Three investors are battling it out to buy a €130m shopping centre in southern Dublin. Ardstone Capital, Hines and Eagle Street Partners are competing to secure the asset, with final bids for The Square to be submitted by the end of the week. Cushman & Wakefield and Bannon are selling the shopping centre on behalf of Oaktree, which bought the mall in 2018 for €250m. Oaktree refinanced €186m of debt secured against the asset in 2021, with incumbent lender AIB rolling over the existing facility. There have been several big additions to the mall’s tenant line-up in recent years, including retailer Penney’s and Irish cinema chain Movies. In addition to the retail component, The Square’s site has future residential development potential, and that is understood to be a key pull to those pursuing the sale. React News, 16th January
Grafton Street, Dublin 2 Shanghai-based fashion group Icicle is to open in Ireland at the end of this month in the former House of Ireland building on Grafton Street opposite Trinity College’s Provost’s house. Originally a branch of the Royal Bank designed in 1904, the landmark building is said to have been purchased and refitted at a cost of approx. €10m and represents a significant retail investment in Dublin by the Chinese company. The Irish Times, 10th January
OFFICE
Chancery Lane, Dublin 8 Sretaw PE, the investment and property development company headed up by Eamon Waters, has completed the acquisition of the Chancery Building in Dublin City Centre for approx. €14m. The price paid represents a discount of 43% on the €24.75m price that had been sought originally by Knight Frank when it brought the property to the market on behalf of its owner Credit Suisse, in September 2022. Sretaw expressed an interest in purchasing the property after its asking price was reduced to €19m last year. The €14m paid by Mr. Waters is approx. 41% lower than the €23.8m Credit Suisse paid Hibernia Reit to secure ownership of the property in 2017. Located on Chancery Lane in Dublin 8, the Chancery building comprises a six-storey over-basement office block along with four two-bedroom apartments. The office element of the scheme extends to 34,283 sq. ft with secure basement car parking for 19 cars and further parking for bicycles. The offices are fully let to three tenants and are producing total rental income of €1.397m pa. Of the current rent roll, 69% is being generated by State tenants. The ground floor is let to Wella Studio. The first to fourth floors are let to the Office of Public Works and are occupied by the Chief State’s Solicitors Office. The penthouse floor is occupied by Analytic Partners, a privately held firm specialising in analytic solutions. The four apartments are fully let to private tenants on a mix of rolling “Part 4″ and fixed-term tenancies. The rent roll of the residential units equates to €98.9k pa. The Chancery building comes with planning permission to extend the floor area of the office accommodation by 9,838 sq. ft. The Irish Times, 11th January
Cherrywood, South Dublin Spear Street Capital has completed another sale at its Cherrywood campus as over €50m of Dublin office sales closed in the run-up to Christmas. French investor La Française Group purchased Block 8, a 25,000 sq. ft recently refurbished office block, from the US investor for approx. €13m (NIY 5.5%) with the asset let on a new 25-year lease to medical firm Laya Healthcare. React News, 12th January
South Leinster Street, Dublin 2 Trinity Point, a 44,000 sq. ft office building on South Leinster Street, was sold for €39m. It was purchased by The Office of Public Works (OPW) from a private Irish investor. The property is majority let to the OPW on two FRI leases expiring in March 2032. The OPW paid rents of between €55 per sq. ft up to €59 per sq. ft. React News, 12th January
MIXED-USE
Cabra, Dublin 11 An Bord Pleanála has refused planning permission for a 16-storey high Grand Canal Square-style mixed-use scheme. In the plans, Woodberry Printing Ltd was seeking planning permission for its Royal Canal Square development on a 5.63-acre site at the Broombridge industrial estate in Dublin 11 that was to also include four blocks with the tallest reaching to 16 storeys in height. The scheme includes 304 apartments and a 100-bedroom family hotel along with 477,540 sq. ft in office space and 14 retail units. In a bid to secure planning permission, the applicants proposed that the 16-storey block be reduced to 12 storeys while a 12-storey block be reduced to 10 storeys. The applicants also offered to reduce the amount of office floorspace. The decision upholds a planning refusal issued by Dublin City Council in November 2022. The Journal, 15th January
RESIDENTIAL / DEVELOPMENT
Ballygrennan, Co Limerick Planning permission has been sought by Clúid Housing Association in partnership with Tinwat Holdings, a part of the Whitebox Group, to build a €28m mixed-use development in Ballygrennan. The project, which was designed by Fewer Harrington & Partners, will see the construction of 73 houses and 42 apartments, in a mix of two, three and four-bedroom units and a coffee shop with an external seating area. It will also include a local convenience retail unit, a four-storey neighbourhood centre including 42 two-bed elderly housing units, a communal roof garden and a pharmacy with drive-through dispensary window. The scheme also plans for a three-storey 90-bed nursing home. The Business Post, 13th January
Cashel, Co Tipperary Plans have been lodged for a €28m Large-scale Residential Development (LRD) at Wallers Lot on the outskirts of Cashel town in Co Tipperary. The development for Carrick on Suir based JSF Property Holding Ltd will consist of the demolition of an existing agricultural building and the erection of 139 dwellings in a mix of terraced, semi-detached and detached houses as well as an apartment block. It also includes plans for a crèche on the ground floor of the apartment block. The overall site spans just over 11 acres. The Business Post, 13th January
Rathgowan, Mullingar Westmeath County Council has granted planning permission to Marina Quarter Ltd and Glenveagh Homes for a €30m LRD application at Rathgowan in Mullingar. The project will see the construction of 181 residential units in a mix of apartments and houses. The Business Post, 13th January
Donabate, North Co Dublin Work is expected to begin soon on the €85m Ballymastone LRD in Donabate. The project for Glenveagh Homes will see the construction of more than 432 residential units in a mix of apartments and houses. The project will include a crèche and public open space. The Business Post, 13th January
Clonburris, West Dublin Cairn Homes has begun works on an €18.4m residential development in west Dublin, which is in the Cappagh South-West Development Area of the Clonburris Strategic Development Zone Planning Scheme 2019. The project will see the construction of approx. 160 residential units with a mix of 81 houses and 76 apartments. Cairn Homes has separate plans for approx. 1,000 houses, apartments and duplex units at Clonburris. The Business Post, 13th January
BNP Paribas Real Estate Ireland Construction Report Construction activity remained in a state of contraction for the sixth consecutive month in December, with the commercial property sector worst hit, but recovered slightly from November to round out the year in a marginally better place. The headline BNP Paribas Real Estate Ireland Construction Total Activity Index – which tracks changes in the total volume of construction activity compared with one month previously – inched closer to but still remained below the crucial no-change 50.0 mark last month. December posted a reading of 45.1, up from 44.5 in November to signal a softer pace of decline in the final month of the year. The commercial property sector saw the sharpest rate of decline, contracting at a faster pace than November levels. Construction on housing projects slowed again, but at a softer pace than in November, while the volume of commencements grew by approx. one fifth from the start of the year, suggesting “a positive outlook for the sector”. The Business Post, 14th January
Balgriffin, Dublin 17 Deutsche Bank’s investment arm is the new owner of the 46 homes in a Dublin housing estate that were bulk bought in December. New records filed on the Land Registry have shown that 85% of the homes in Belcamp Manor, acquired as part of a €24.5m deal, are now being transferred to DWS Group. DWS Group, the €800bn German asset manager majority controlled by Deutsche Bank, is the owner of the Belcamp Manor homes, which was built by developer Greg Kavanagh, on behalf of one of its funds. The higher 10% rate of stamp duty, put in place by the government to deter investors from bulk buying houses, was paid to complete the deal. Belcamp Manor is a 54-unit housing estate near Malahide Road in Dublin 17. The first eight homes in the estate were sold in 2022. Four of the units were sold to Fingal County Council for social housing and one other home was sold to a company called Worldstone Equity Growth Limited. The other homes were sold to private buyers. Based on the asking price for the homes, the total sale price of the 46 houses would have been €26m. However, a filing on the Property Price Register showed that the homes were acquired as part of a single deal worth more than €21.5m, exclusive of Vat, in December 2023. The Business Post, 12th January
Merrion Square, Dublin 2 A fresh High Court challenge has been brought in an ongoing planning row between owners of properties on Dublin’s Merrion Square. A year ago, Minoa Limited, which owns nos. 2 and 3 on Merrion Square, settled another challenge it brought over what it claimed were unauthorised works being carried out on a site originally earmarked for the construction of a five-storey office block. The plan involved the demolition of the Merrion Building – Morrisseys – which is between the Davenport Hotel and 1 Merrion Square North. It is owned by Persian Properties Unlimited Co and an associated firm, Blue and White Diamond Ltd, is to carry out the development. Permission for the five-storey block was first granted in June 2019. There followed two additional applications, in 2019 and 2022 to amend the permission, including one increasing the building height. The case comes back next month for mention. The Irish Times, 15th January
Rents in Ireland have increased at the third highest rate in Europe since 2010, new figures show, with only Estonia and Lithuania showing bigger increases over the last 13 years. New data published by Eurostat show that rents in Ireland have increased by 100% since 2010 – coinciding with a supply crunch that has sent accommodation costs soaring. Overall, the statistics showed that rents have increased in 26 EU countries in that period, with only Greece showing a decrease in rent prices. The Eurostat figures also show how house prices in Ireland increased in the third quarter of 2023 compared to the same period the year before – with costs up 1.4% in the period. The Business Post, 10th January
Glenveagh Accounts Earnings at Glenveagh, the developer, were down 13% in 2023 compared to the previous year, but margin in its suburban housebuilding business grew. The Dublin-based housebuilder reported turnover of €608m, a 6% decline on 2022, but recorded revenue from its partnerships to deliver state housing for the first time. The decline in year-on-year revenue has been attributed to the once-off disposal of a site on East Road in Dublin docklands for approx. €63m, which did not recur in 2023. The firm said when the land sale was not factored in, the firm recorded a modest increase in revenue. Last year, Glenveagh secured planning permission for approx. 4,600 units, 700 of which could still potentially be appealed. The firm also lodged planning applications for approx. 2,900 further homes during the year. In 2023, Glenveagh returned approx. €63m to shareholders. Last year, the margin in Glenveagh’s suburban business grew to 20%, up from 18%. The Business Post, 10th January
Cairn Homes, the listed Irish home builder, delivered a record performance in 2023 as strong demand for housing continues to drive sales and profitability in the group. Announcing a trading update to investors on Tuesday, Cairn Homes said it estimates full year revenue for 2023 will be approx. €665m, which will be up approx. 8% on the €617m in sales the company posted for 2022. The homebuilder said it expects to generate full year operating profits to increase in excess of €113m for 2023, while operating profit margins are forecast to widen to a healthy 17%. Overall, Cairn said it closed the sale of more than 1,700 homes last year, which was up 14% on the previous year. The building company said its forward order book has never been as strong, with sales agreed for 2,350 homes and expected revenues of more than €900m. The Business Post, 16th January
Goodbody Report Construction commenced on more than 33,000 homes in Ireland last year, according to new analysis by Goodbody. Based on the data for last year, the stockbroking firm has forecast that the country is on track to deliver more than 34,500 new homes in 2024. Despite the large rise in housing output forecast, it has been estimated the average house price will rise by 2.8% to €356k by the end of the year. Goodbody’s latest Irish Housing Chartbook has shown that more than 3,400 new residential units were commenced in December 2023, which was up 91% compared to the previous year. In the final three months of last year, housing commencements rose 51% YoY. The spike in new housing starts at the end of the year meant construction commenced on a total of 33,000 new homes in 2023, which was up 23% compared to 2022. The Business Post, 16th January
First Home Scheme More than 3,000 people have been granted approval for the First Home Scheme, which helps prospective homeowners purchase their first property, since its launch 18 months ago. New figures show that approx. 1,300 homes have been bought with the help of the shared-equity scheme, as the Department of Housing announced plans to raise the applicable price ceilings by €25k in a selection of local authorities. The First Home Scheme is a €400m fund set up to help first time buyers to bridge the gap between their mortgage, deposit and the price of a new home. It is a joint venture between the state and the three banks, AIB, BOI and PTSB, and remains open to other authorised mortgage lenders in the Irish market to join the scheme. A total of 3,196 people have been approved for the scheme and 1,255 purchases have been completed, with the average price of a house in 2023 sitting at €380k. The Business Post, 9th January
OTHER
Trinity Street, Dublin 2 EMI-MR Investments, owner of the Mercantile Group, has purchased the Trinity Street Car Park in an off-market deal believed to be worth approx. €19m. EMI purchased the shares in Bashview Limited, owner of the car park, last month, according to documents filed in the CRO. It is now set to work with BCP Capital, which are acting as development manager, on progressing plans to turn the car park into an office. In 2021, Bashview obtained planning permission to demolish the existing six storey mixed use structure known as ‘Moira House’ and ‘Trinity Street Car Park’ and replace it with a nine-storey office building. The car park, which is one of the busiest in the city, is situated on Trinity Street, Dame Lane and St Andrews Lane. It currently has 171 car parking spaces. According to planning doucments, the proposed building will accommodate office space at the first to ninth floor levels with a reception lobby at ground floor accessed from Saint Andrew’s Lane and a ground floor restaurant unit. The Business Post, 14th January
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