16th May (Issue 397)
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.
RETAIL
College Green, Dublin 2 HWBC is guiding a price of €6m (NIY5.33%) for the College Green Collection, a portfolio of prime retail investment properties in Dublin’s south city centre. The investment comprises 1-2 College Green (Starbucks cafe at the junction of College Green and Foster Place) and 4-5 College Green (Circle K convenience shop at the junction of College Green and Anglesea Street leading to Temple Bar). The properties are being offered for sale as the College Green Collection and are available in three lots – lot 1 is 1-2 College Green, lot 2 is 4-5 College Green and lot 3 is the entirety. Lot 1 comprises the ground floor and basement only and extends to 2,478 sq. ft. The passing rent from Starbucks is €185k pa, with more than seven years to lease expiry. The guide price is €3.15m (NIY 5.34%). Lot 2 comprises the ground floor and basement only and extends to 3,070 sq. ft. The passing rent from Circle K is €167k pa, with more than six years to lease expiry. The guide price is €2.85m (NIY 5.33%). The entire portfolio produces a total rent of €352k pa – with an average unexpired lease term to expiry in excess of 6.5 years. The Irish Times, 10th May
OFFICE
Westland Park, Dublin 12 French investor Iroko Zen has completed its sixth acquisition in the Irish investment market, paying €4.97m for Westland House (Block A) at Westland Park in Dublin 12. The property is fully let to Virtual Access (Ireland) Ltd on an 18-year FRI lease from January 2023 and is producing annual rental income of €421.3k. The lease contains a tenant break option in year six. Westland House comprises a three-storey office block extending to 25,478 sq. ft, with 70 car-parking spaces. The office accommodation is a mix of open-plan and cellular offices. The Irish Times, 10th May
Santry, Dublin 9 QRE Real Estate Advisers has relaunched the office investment sale of Northwood House in Santry in Dublin 9 to the market. The agent is guiding in excess of €9m (NIY 9.77%) for the investment. The property comprises a modern five-storey over basement, third generation office building providing income from 24 office suites and extending to 44,444 sq. ft gross area, along with 115 surface and basement car parking spaces. Existing occupiers such as Shell, Mazda, Amdipharm and Celtic Anglian Water have renewed their commitment to the building and have been joined by new occupiers such as UFO Drive, while it is understood that further new tenants have agreed terms. QRE’s guide price represents a significant discount to 2021 pricing when the property was last on the market. Current rent is approx. €970k pa and the property is currently 93% occupied. The new guide price reflects a capital value of €202 per sq. ft, which is significantly lower than replacement cost. The Business Post, 13th May
Donnybrook, Dublin 4 Quinn Agnew is bringing Cranford House to the market for sale. The two-storey, detached office building has the benefit of vacant possession, and the agent is seeking offers in excess of €2.5m. The building has the potential for a variety of commercial uses, subject to the relevant planning permission. The purpose-built office building extends to a gross internal area of approx. 6,835 sq. ft (€365 per sq. ft purchase price) and has the benefit of 13 car parking spaces. It was recently refurbished and provides a mix of bright, open plan and cellular offices together with staff welfare accommodation. The Business Post, 13th May
HOSPITALITY
Ballymahon, Co Longford Center Parcs, the holiday village operator, has been put up for sale, according to reports. The resorts are owned by Canadian private equity group Brookfield, who are looking for between €4.6bn-€5.75bn for Center Parcs, according to market sources. Brookfield purchased Center Parcs from Blackstone for approx. €2.75bn in 2015. Center Parcs reportedly recorded a steady revenue stream of €1.1m per week at its Co Longford base in 2022. The resort features 466 self-catering lodges and 30 apartments. Last September, the company got permission for a major expansion of its existing holiday village in Ballymahon, Co Longford, which currently sits on a 395-acre site. The new development will include 198 new lodges, a treetop sauna and pool, an expansion of its restaurants, cafés and shops, and the installation of solar panels. The expansion is expected to cost €85m. The Irish operation is owned by CP Cayman Midco 1, a company registered in the Cayman Islands. The Business Post, 15th May
Clanbrassil Street, Dublin 8 57 The Headline Bar on Clanbrassil Street in Dublin 8 has come to market. The Portobello-based pub on the corner of Clanbrassil Street and the South Circular Road is for sale by private treaty through BDM Property, which is seeking offers in excess of €1.3m. The Headline Bar comprises a three-storey-over-basement licensed premises which extends to approx. 6,813 sq. ft. It has a ground floor lounge bar with a bar counter, a back bar and a fully equipped catering kitchen. On the first floor there is a lounge/private function room and customer toilets. On the second floor there is owner occupier two bed residential accommodation. The property is now being offered to the market with vacant possession. The Business Post, 13th May
Refugee Accommodation Approx. a dozen companies were paid more than €10m to provide accommodation to Ukrainian refugees and asylum seekers from other countries last year. Figures show Tifco Ltd, the Irish hotel business owned by US private-equity group Apollo, was paid at least €37m by the department to lease rooms in its hotels. The department separately paid €25.8m to accommodate asylum seekers and Ukrainians in Travelodge hotels, which are also owned by Tifco. The second highest paid company, Tetrarch Capital, received at least €34m to accommodate asylum seekers and Ukrainians, according to department figures. The Irish Times, 15th May
Imperial Hotel, Cork Behind-the-scenes talks are at an advanced stage for the sale of Cork city’s oldest hotel, the ‘Grande Dame’ Imperial Hotel on South Mall, for as much as €25m, with its purchase linked to veteran Dublin hotel and bar owner Louis Fitzgerald. Hospitality and property market sources say discussions have been ongoing between the hotel’s owners, the Flynn family, who bought the 200-year-old Imperial in 1998 for approx. €6.4m, and significantly upgraded it, and Louis Fitzgerald.
The second-generation Fitzgerald family group, headed by Tipperary-born Louis Fitzgerald, owns up to 20 bars and hotels, primarily in Dublin. He also owns The Quays in Galway, and two Dublin hotels, the Arlington Hotel on Bachelors Quay, bought for a reported €30m in 2005, and the purpose-built Louis Fitzgerald Hotel, next to Joel’s restaurant on the Naas Road. In a central position on the South Mall, the Imperial has a 200-year hospitality history and has over 100 bedrooms, bars, restaurants, function rooms, and business suites. The Irish Examiner, 12th May
INDUSTRIAL / LOGISTICS
Fonthill Business Park, Dublin 22 Unit 20 at Fonthill Business Park in Dublin 22, which extends to 39,721 sq. ft, is held on a long-term lease by Carrolls Irish Gifts Unlimited Company for a term of 15 years from September 25th, 2022, and is generating annual rental income of €417k (€10.50 per sq. ft). The sale of the unit, guiding at a price of €6.9m (NIY 5.5%) through Savills, comes with the added benefit of CPI-linked rent reviews with a cap-and-collar of plus 3% and minus 3% annually. Unit 20 briefly comprises a detached industrial unit on a large self-contained site of approx. two acres, and benefits from a warehouse clear internal height of 9.4 metres. The unit includes ancillary offices over two storeys comprising 9,399 sq. ft. The Irish Times, 10th May
Baldonnell, Dublin 22 Industrial and logistics property development specialist Mountpark has pre-let the seventh and final unit at its Baldonnell development in Dublin 22. Unit G, a 96,930 sq. ft logistics facility, is being leased to Kellihers Electrical and will trade as Rexel Ireland from the facility. The move to take unit G for Kellihers Electrical means the development and letting of the €300m 1,386,189 sq. ft Baldonnell campus is now complete. The Irish Times, 10th May
Nexus Logistics Park, Dublin Iput Real Estate has received full planning permission for the development of Nexus Logistics Park, a 795,000 sq. ft scheme near Dublin airport. Nexus Logistics Park, at the Cherryhound Interchange of the M2 motorway and adjacent to Dublin’s M50, will comprise five separate buildings. The park represents the first phase of development from Iput’s 2.4m sq. ft pipeline. React News, 15th May
Little Island, Co Cork A quiet off-market deal is understood to have been agreed on the former 52,000 sq. ft industrial unit on seven acres vacated last year by Henkel at Cork’s Wallingstown, Little Island, near the new link road and JCD Group’s data centre site. Henkel, which manufactures household items, detergents, and adhesives, employs over 800 in the UK and Ireland and has two other Irish operations, in Tallaght and Ballyfermot. Henkel’s Little Island operation had been offered with vacant possession via agents Savills with a €6m guide and is likely to be “sale agreed” close to this sum. The Irish Examiner, 11th May
MIXED USE
College Green, Dublin 2 Hines and its joint venture partner Peterson Group have started a process to bring in fresh finance for their €200m Central Plaza development in Dublin. JLL has been mandated to replace an existing construction facility with a longer-term loan of €90m-€100m, sources confirmed. The Central Bank of Ireland headquarters site was purchased for approx. €70m, with Hines understood to have invested north of €100m in renovating the asset. Acquired by Hines in 2017, in partnership with Hong Kong’s Peterson Group, Central Plaza is a mix of offices, retail, restaurants and cafes. The 165,000 sq. ft development, made up of a cluster of five upgraded buildings, is composed of 60% office space with the other 40% retail and leisure. React News, 11th May
Cork Residential Portfolio Cushman & Wakefield is selling Russet Court, comprising seven houses, 15 apartments, and a commercial unit, in three blocks built in the 2000s on Churchyard Lane, behind the Venue Bar and near Páirc Uí Chaoimh, 100m off the main Blackrock Road. The seven houses are each four-beds, with two en suites, of 1,250 sq. ft each, and the apartments range in size from 545 sq. ft to 685 sq. ft. The commercial unit is occupied by Cope, and there are two car parking spaces per unit. Details are being privately circulated and sources say the price guide is €6.25m, with income of €390k pa. The Irish Examiner, 11th May
RESIDENTIAL / DEVELOPMENT
Social Housing, Ireland A company that leases 250 homes to local authorities for social housing booked an €8m after-tax profit in 2022. Arresico Ireland was established in 2019 and new financial filings for Rediresi Icorp Limited, a subsidiary of Arresico Ireland, show it recorded an €8.2m profit during the 12-month period that ended March 31, 2022. Details in the firm’s accounts show the large profit was booked following a revaluation of the company’s investment property portfolio. The filings show its portfolio of homes was revalued in 2022 at a €22.1m value gain. The company’s property portfolio is now valued at more than €54m, according to the filings. It spent €31.8m acquiring the homes part of its portfolio. In a bid to boost social housing supply, local authorities have been permitted to lease homes from property owners for periods of between ten and 25 years. Councils can pay up to 95% of market rent to lease the homes. Arresico has entered arrangements to lease more than 250 homes for social housing across ten local authorities. The Business Post, 13th May
Social Housing This year’s allocation for the number of homes that can be bought for social housing tenants in Dublin city from their private landlords is already close to being met, the city council’s head of housing has said. The Government wants local authorities across the State to buy 1,500 homes this year from landlords who have given notice to tenants who are in receipt of State supports such as the housing assistance payment (HAP) or are in the rental accommodation scheme (RAS). More than half the national allocation is expected to be delivered by the four Dublin local authorities. Dublin City Council has been given sanction to buy 450 homes. South Dublin County Council can buy 150; Fingal County Council 125; and Dún Laoghaire-Rathdown 60. The city council’s head of housing, Coilin O’Reilly, said the council had already “secured” 136 houses this year, of which 14 sales have been completed and 122 are in the conveyancing process. A further 93 are at the valuation and offer stage. Landlords have offered another 149, of which “114 [are] at initial inquiry and tenant check and 35 at property inspection”, Mr O’Reilly said. The Irish Times, 15th May
Santry, Dublin 9 Developer Kategale Limited has been approved planning permission for a €42.7m SHD residential development at Northwood Crescent in Santry Demesne, Dublin 9. The development will include the construction of 268 BTR apartment units in blocks ranging in height from five to 11 storeys, a gym facility, office building, crèche and public realm works. The Business Post, 13th May
Newbridge, Co Kildare Diageo Ireland has been approved planning permission for a €200m brewery development at IDA Newbridge Business & Technology Park at Little Connell, Newbridge in Co Kildare. The development will measure approx. 129,166 sq. ft and includes the construction of a purpose-built brewery, labs, control rooms and workshops. The Business Post, 13th May
Sandyford, Dublin 18 Planning permission has been submitted to Dún Laoghaire-Rathdown County Council for a €29m residential development at Ballaly Shopping Centre in Sandyford, Dublin 18. The scheme, designed by Horan Rainsford, proposes 165 apartments in buildings up to eight storeys in height. A decision is due in early summer 2023. The Business Post, 13th May
Cobh, Co Cork Planning permission is being sought by O’Mahony Developments for a €21m residential development in Carrignafoy in Cobh, Co Cork. The development, which proposes 92 residential units, will be a mix of two, three and four-bed detached, semi-detached and terraced houses. A decision is expected in early summer 2023. It is understood that construction work will be carried out over two phases. The Business Post, 13th May
Clonsilla, North Co Dublin Alanna Homes has been granted planning permission for a €241m residential development in Clonsilla, North Co Dublin. The development proposes the construction of 1,243 residential units comprising a mix of 322 houses, 117 duplex units and 804 apartments along with commercial and community facilities, crèche, medical centre and retail units. The scheme also proposes a 16-classroom primary school. The Business Post, 13th May
Church Road, Killiney Following the demolition of three dwelling houses at Rockwinds, Smallacre and Woodlawn on Church Road in Killiney, work is now under way on the construction of two residential blocks (D&E) as part of a €26.5m residential development for Marlet Property. The overall development calls for the construction of a total of 102 units comprising 34 houses and 68 apartments. The Business Post, 13th May
Cairn Homes, one of the largest housebuilders in the country, has said it expects turnover in excess of €650m from 1,750-1,800 closed new home sales amid “exceptionally strong” demand for housing. This includes the sale of over 800 social and affordable home nationwide. In a trading update ahead of its agm, the company says it expects to record a gross margin of 21% this year. The company said it has “significantly” grown its current closed and forward sales pipeline to 1,905 new homes today with a net sales value in excess of €685m. The Business Post, 11th May
Housing for Staff Ryanair has secured student accommodation to house staff over the summer months, its chief executive has said, as he outlined the effects of the housing crisis on staff recruitment. Eddie Wilson labelled housing the “number one” issue for companies attempting to hire in Dublin. The airline has secured accommodation in Dublin City University (DCU) for staff who want to come to Ireland and work for the summer months. Wilson said that while Ryanair has secured student accommodation on a short-term basis, this is not part of its strategy to attract new staff and is primarily for existing Irish staff who work abroad but want to return home for the summer. The Business Post, 9th May
An Bord Pleanála (ABP) The number of planning cases handled by ABP has fallen by half in the wake of a year of controversy that left it hobbled by staff shortages, new figures show. Draft data shows that by the end of March, ABP had disposed of 366 cases this year, a 49% reduction on the 719 cases it dealt with in the same period in 2022. The planning body has said its backlog includes 27,000 homes awaiting determination. In March the number of cases the planning body processed was 145, down from 300 in the same month last year. The figures are contained in internal performance data compiled by ABP, which has not yet been published but has been shared with the Department of Housing. The data shows that the number of cases it received in the year to the end of March was down slightly – a 14% drop from 813 to 701. The Irish Times, 15th May
Daft.ie Report In an opinion piece in the Currency, Ronan Lyons notes that there were just 959 homes to rent on the open market on May 1, only the third time in a series that extends back over 200 months where there were fewer than one thousand homes available to rent. One of those other occasions was on the same date in 2022, when there were just 851 homes to rent. So the year-on-year figure has improved. But the improvement in availability is tiny compared to the deterioration that preceded it. During the period 2015-2019, when rental supply was already tight and rents rising as a consequence, there were an average of approx. 4,000 homes on the rental market – with over 1,500 of those in Dublin. Now, the country has fewer than 1,000 homes and less than 500 are in Dublin.
In 2012, the volume of rental homes coming to the market was approx. 132,500 pa and it continued to fall as the decade progressed, to 90,000 in 2014 and below 70,000 in 2016. This seemed to be close to the natural level of supply, though, for the following five years. The annual average for 2016-2021 was 62,000 rental homes being advertised over the course of the year. Since early 2021, though, the volume of supply has collapsed. In the 12 months to April 2023, just 30,000 rental homes were put online. In Mr Lyons’ opinion, Ireland is missing at least 200,000 rental homes. And if anything that number is growing, not shrinking, with each passing month The Currency, 15th May 2023
OTHER
BNP Paribas Real Estate Construction PMI Report Housing output has continued to decline amid the sharpest fall in construction activity in Ireland in three months, new figures published show. The latest Construction Purchasing Managers’ Index from BNP Paribas Real Estate Ireland reveals a reading of 48.4 in April compared to 49.5 in March. Any figure below 50 indicates contraction and any reading over 50, expansion. The reading for housing construction activity stood at 42.8 in April. That compares to 46.5 in March, 45.2 in January and 56 in April last year. Figures from the CSO last month showed that the total number of new homes completed in the first three months of the year hit 6,717. While that was a 19.1% increase on the figure for the first quarter of 2022, apartments accounted for just over 36% of the completions. Not only did last month see a sharper contraction in overall activity – there were slower rises in new orders, employment and input buying. The latest survey also found that Irish construction firms are continuing to experience issues with further lengthening in delivery times. It said that the extent to which lead times worsened was the greatest since January. The Irish Independent, 15th May
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