16th March (Issue 288)
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.
OFFICE
Sandymount, Dublin 4 Located on Gilford Road, the Tram Shed is being offered for sale by agent Harvey at a guide price of €3.4 million, or to let on a medium- to long-term lease at an annual rent of €250,000. Dating from 1901, the former tram depot building has been extensively restored and converted for office use. In terms of its exterior, the Tram Shed is a distinctive building with a cut-stone facade and exposed original roof trusses on the inside. The office accommodation extends to 8,434sq ft and is arranged over two floors comprising a mix of open-plan and glazed cellular offices together with other ancillary accommodation. The property benefits from on-site car parking as well as on-street parking on Gilford Road. The Irish Times, 10th March
Google, Dublin 4 Dublin City Council has raised “serious concerns” about Google’s plans to build a new ten-storey office development in the heart of Silicon Docks. Last year, Google acquired the Treasury Building, the former head office for the National Treasury Management Agency and Nama, on Grand Canal Street Lower for a price in the region of €120 million. Since acquiring the building, plans have been lodged with Dublin City Council that would involve significantly expanding the office space on the site. The proposal would involve the demolition of a three-storey building connected to the main Treasury Building office block and the construction of a new 10-story development on the site. In its assessment of the plan, Dublin City Council said the 10-storey building at this location “may be excessive and could potentially have an adverse visual impact”. The Business Post, 12th March
RESIDENTIAL / LAND
LRC Group It was reported in the Irish Times that the LRC group has instructed Eastdil Secured to handle the disposal of its entire Irish residential rental portfolio. While the process is still at an early stage, it is understood LRC is hoping to secure over €1 billion from the sale which consist of 1,700 apartments located in Dublin, Cork and Galway. The LRC Group’s portfolio consists entirely of standing stock, the vast majority of which is let and producing rental income. Established in 1995 by Israeli investor Yehuda Barashi, the wider LRC Group has grown its presence across Europe to the point where it now has more than €6 billion of residential and commercial assets under management. The Irish Times, 10th March
Marlet Group It was also reported in the Irish Times that Marlet has put their Castle portfolio up for sale with the intention of forward selling the portfolio. The Castle portfolio comprises some 2,000 apartments and duplexes distributed across six sites and due for delivery between July 2021 and March 2024. The scale of the offering is significant, representing as it does just under 24% of Marlet’s 8,500-unit residential pipeline and an estimated 15% of Dublin’s institutional PRS market. The forward sale, which is being handled by sole adviser Cantor Fitzgerald, is expected to attract offers in excess of €1 billion. The Irish Times, 10th March
Dunsink, Dublin 15 A public land bank which is currently home to around 200 members of the Travelling community is being examined as a potential site for thousands of homes by a local authority. Fingal County Council is to carry out a study of the housing potential of up to 1,000 acres of publicly-owned land in Dunsink in Dublin 15, near Finglas and Castleknock. Around 100 acres beside the M50 are occupied by the publicly-owned Elmgreen golf course, while another 187 acres are taken up by the former landfill. The Business Post, 14th March
House Prices House prices rose again in Ireland in January, according to official CSO data just published. Prices rose by 0.5% mom, taking the annual rate of growth to 2.6%, its fastest since May 2019. Price momentum is building, with the annualised pace of growth in the three months to January standing at 8%. Price growth is strongest outside Dublin (+4% yoy versus +1% yoy in Dublin), but price momentum is building nationwide. In many areas, the annualised rate of growth in the past three months is in double-digit territory, possibly reflecting the growing demand for locations outside the traditional urban centres. Low stock levels are also contributing to the upward squeeze. Separately, the CSO published data showing that planning permissions granted for residential units grew by 11% yoy in 2020, thanks to a surge in permissions for apartments (+27% yoy). Permissions for multi-unit developments of houses fell by 7% yoy in 2020 while permissions for one-offs fell 6% yoy. The gap between completions and permissions has widened significantly in recent years. This is due to the apartment sector, where permissions have overtaken those for houses. Given the costs of construction, most of these apartments are only viable through the Build-to-Rent sector. Goodbody’s Irish Housing Chart Book
House Delivery Covid-19 restrictions will have a considerable impact on housing supply this year with up to 5,000 fewer homes being built, a new report has warned. The study, conducted by EY DKM on behalf of the Construction Industry Federation (CIF), suggests that housing completions will fall to 16,000 in 2021 compared with the outturn for 2020 of just under 21,000. The report noted that there were 59,867 construction workers in receipt of the Government’s pandemic unemployment payment (PUP) at the beginning of March, almost one in two workers (43.9 %) in construction. It also highlighted that the value of construction output was €24.7 billion in 2020, which is a reduction of 7.3% or almost €2 billion in construction investment compared with 2019. It estimated that the contraction in 2021 will be approximately €3 billion. The Irish Times, 15th March
Phibsborough Dublin 7 A challenge to a proposed development of 18 social housing apartments in Phibsborough, Dublin, is to be dealt with by the fast-track Commercial Court. Lilacstone Ltd was last December given permission by An Bord Pleanála for the redevelopment of the “Stone Villa” building on the North Circular Road as three apartments, along with a further 15 on the site itself. Stone Villa is a protected but derelict structure. Local residents, through a company, Shadowmill Ltd, were granted leave last month by the High Court to seek to quash the permission. Their grounds of challenge include claims the development will result in the loss of significant tree cover and will disturb the habitat of three species of bat. The Irish Times, 15th March
HOTELS
Dublin Hotels Dublin City Council needs to restrict the development of further hotels to prevent “over-concentration” in the city, according to Dublin’s Lord Mayor Hazel Chu. The sitting Lord Mayor has said Dublin City Council should introduce “clear thresholds” that measure hotel and aparthotel “over-concentration“ in given geographical areas. “Maximum limits on the number of hotel or aparthotel rooms which can be granted permission per annum must be explored and considered,” Chu said in a submission as part of the public consultation phase of the new city development plan. Since 2015, Dublin City Council has approved plans for more than 10,000 hotel or aparthotel rooms to be built in Dublin. Nearly half of these are in central Dublin. The Business Post, 14th March
RETAIL
Retail Valuations Hammerson, which co-owns Dundrum Town Centre, has cut c€2.3bn from the value of its shops and shopping centres, as the Covid-19 pandemic had a severe impact on the retail sector. The company said its portfolio is now valued at £6.3bn, down from £8.3bn in 2019. Hammerson operates in seven different countries, with a number of flagship retail centres including the Bullring in Birmingham, UK. It co-owns Dundrum Town Centre, along with German insurer Allianz. The group also owns half of the Pavilions shopping centre in Swords, the Ilac Centre in Dublin city centre and 40% of the Kildare Village premium outlet mall. Net rental income of £158m last year was down 49% as a result of Covid-19 closures, tenant restructuring and higher provisions for bad debt and tenant incentives, according to annual results from the group. In Ireland, its rental income fell by 30% year-on-year. Irish Independent, 12th March
OTHER
Stags Head, Dublin 2 Louis Fitzgerald, the publican behind Dublin’s Stag’s Head and Kehoes, is planning to launch a new bar and seafood restaurant. The pub owner is expecting to launch the Stag’s Tail when pandemic-related restrictions are lifted later this year. The Fitzgerald Group said food would be integral to the future of the pub business post-pandemic in Ireland, putting the Stag’s Head at a disadvantage compared to other venues. It said the heritage status of the famous Dublin city centre pub “limits its ability to adapt the business in this direction” and provide a food offering. The Fitzgerald Group has acquired the leasehold of the ground floor and basement of nos 33 and 34 Dame Street, which was previously occupied by Snap Printing. It said the new restaurant set-up would be a “major contribution” to the wider Dame Street area, which is undergoing a large redevelopment due to the plans to overhaul the old Central Bank headquarters, and would fit in well with the proposed pedestrianisation of Dame Street. The Business Post, 14th March
O’Connell Street, Dublin 1 Colliers International Ireland has sold 33 Bachelors Walk in Dublin 1 for €1.2 million. The five-storey-over basement building is just 20 metres from the city centre‘s main thoroughfare, O’Connell Street. The mid-terrace period building extends to 288 square metres, including a retail space on the ground floor, storage at basement level and a number of office suites across the first, second, third and fourth floors. The property, which was sold with vacant possession, lends itself to numerous asset management opportunities. The new owner has the option to either let the building in its current use or alternatively convert the upper floors to self contained apartments, subject to planning permission. The Business Post, 14th March
Naas, Kildare A mixed-use investment property, The Atrium, in Naas Town Centre, Co Kildare, has come to the market and agents JP & M Doyle are guiding a price of €3.8m. Fully let, it generates €250,529 in annual rental income excluding Vat, rates and service charge, equating to a gross yield of 6.59pc. Its tenants include a number of healthcare providers which pay a combined €130,749, or more than half the annual rent. The four-storey building extends to 33,980 sq ft of which 7,704 sq ft are let to Nua Healthcare Services Limited who pay an overall rent of €85,749. The Atrium comes with 17 surface car parking spaces and it also adjoins a public car park. The top floor accommodates a board room and three apartments with the latter ranging in size from 732 to 1,098 sq ft and each of them are let. The Irish Independent, 11th March
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