16th May (Issue 96)

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.




AIB Grafton Street Branch: GLL Real Estate, a German fund manager, is seeking c. €48m for AIB’s branch office on Grafton Street, €20m more than the c. €28m they paid for the building in July 2010. The branch, which has dual frontage on to Grafton Street and Wicklow Street in Dublin city centre, extends to 18,060 sq. ft. and is let to AIB on a 20-year lease from July 2010 at a rent of €1.2m p.a. CBRE estimates that the asking price will give the new owner a net initial yield of 3.58%. GLL’s plan to flip the investment had been expected since the beginning of the year given the sharp recovery in values at the top end of the market and continuing demand for strongly performing high street properties. The Irish Times, 10th May 

Galway Stores Sale: AIB is to sell several stores connected with Galway city retailers the Nestor Group. The portfolio, comprising three SuperValu supermarkets and a Centra convenience store, has been put on the market by receiver Grant Thornton, who was appointed after reportedly lengthy negotiations between AIB and two of the group’s directors were unsuccessful in avoiding a receivership process. The stores, which have a combined turnover of c. €30m and employ 190 people between them, will continue to trade as normal during the sale process. Sunday Business Post, 14th May

The Green, Malahide: Kelly Walsh is guiding €3.8m for 1-3 The Green, a fully tenanted mixed-use investment in Malahide, Co. Dublin. The development is a four-storey over-basement building with underground parking, overlooking the Marina Green in the village centre. The ground floor trades as Asian restaurant Siam Thai, while the upper floors provide modern office space. The property extends to over 10,000 sq. ft. and produces a rental income of c. €288k p.a., offering a net initial yield of 7.25%. The weighted average unexpired lease term is 9.3 years. The Irish Times, 10th May



200 Capital Dock: JP Morgan is to acquire 200 Capital Dock, one of a series of new buildings in the 600,000 sq. ft. Capital Dock development currently under construction on Sir John Rogerson’s Quay in Dublin’s docklands. It is understood the company will pay c. €125m for the 130,000 sq. ft. building (c. €961 psf), which is capable of accommodating more than 1,000 staff, indicating the bank could double its Irish work force as it seeks to relocate some of its business activities from the UK following the Brexit vote. It is expected that the new building will be completed by Q3 2018. The Irish Times, 15th May 

Coca-Cola Ballycoolin: An Irish company has paid €10.5m to purchase a logistics and office building at Huntstown Business Park in Ballycoolin, Dublin 15. The purchase price was c. €400k over the guide price for the building, which is rented to Coca-Cola HBC under two separate 25-year leases from 2010. The office is used as the Irish HQ for Coca-Cola, who plan to sublet the warehouse. The detached office block extends to 33,637 sq. ft. and contains 114 car parking spaces, while the logistics facility has a floor area of 78,555 sq. ft. The combined rent is €633k p.a. and there are no break options over the remaining 18 years on the leases, with upwards only rent reviews every five years. The Irish Times, 9th May 

Cork Business and Technology Park: Lisney is guiding €7.25m for two buildings in the Cork Business and Technology Park, which are let to Apple and Trend Micro. The buildings extend to more than 61,095 sq. ft. and produce a combined rental income of c. €808k p.a., with a weighted average unexpired lease term of over 3.9 years. Based on the guide price, the investments will offer a net initial yield of 10.65% and have a capital value of c. €119 psf. The detached building rented by Apple has a floor area of c. 25,000 sq. ft. and was recently fitted out to the highest standard. The current rent of €341k p.a. is due to rise to €359k from July 2018, €377k in 2019 and €396k from 2021. Apple’s lease runs until 2023, with tenant break options in 2019 and 2021. The building occupied by Trend Micro for €466k p.a. extends to c. 36,000 sq. ft. and the company’s two leases run until 2026 with a break option in 2022. Cork Business and Technology Park is located about 2.5km west of Cork city centre. The Irish Times, 10th May

Smithfield Development Site: Cushman & Wakefield is guiding €2.25m for a 0.2-acre site on Blackhall Street in Dublin 7, which is occupied by a two-storey commercial building with dual frontage on to Blackhall Street and Oxmantown Lane. The site is owned by the McDonnell family, who have been in business in the area for c. 40 years, and in February secured planning permission for a five-storey office development. The new development will have a floor area of 29,331 sq. ft. and is located close to the Law Society of Ireland, Smithfield and Grangegorman. The Irish Times, 9th May

Curraheen Office Development: An Bord Pleanála has upheld Cork County Council’s decision to grant planning permission for a c. €21m office development in Curraheen, Co. Cork. The project, at the former FAI grounds, will involve the construction of 215,000 sq. ft. of office space over five storeys with café and restaurant elements. The project has a 10-year planning permission and is expected to be completed on a phased basis. The Sunday Business Post, 14th May

Blackrock Office Development: An Bord Pleanála has confirmed Dún Laoghaire-Rathdown County Council’s decision to grant planning permission for the redevelopment of Enterprise House in Blackrock, Co. Dublin, which will involve the construction of over 86,000 sq. ft. of new office space over five storeys. The Sunday Business Post, 14th May



The Regency Hotel: The McGettigan family has successfully regained control of Dublin’s Regency Hotel after refinancing the hotels debts of c. €25m at par, allowing the hotel to successfully exit examinership. It is believed the family are now working on an investment plan to improve the hotel’s facilities and maximise the site’s potential. It is likely that the hotel will also be rebranded, to allow it to move on from the negative publicity surrounding a gangland shooting at the venue last year. The McGettigan Group owns nine hotels in Ireland in Dublin, Cork, Donegal, Limerick and Waterford. The Sunday Business Post, 14th May 

Loreto Hall: Plans have been approved for a nine-storey, 95-bedroom, four-star hotel at Loreto Hall which is located at 77 St Stephen’s Green in Dublin 2. The new hotel will also contain a function room, restaurant and spa centre. Loreto Hall is a protected building and was owned by the Loreto Order until October 2015. The Sunday Business Post, 14th May

JD Wetherspoons Development: An Bord Pleanála has re-affirmed Dublin City Council’s decision to grant JD Wetherspoons plc planning permission for a c. €4m hotel development on Camden Street in Dublin 2. The Sunday Business Post, 14th May



Dublin Apartments: A planned development of up to 1,800 apartments located on as many as six prime sites across Dublin is to be sold off the plans to global investors, in the first transaction of its type in Ireland. The Irish Independent reports that Marlet Property Group has instructed Savills to offer up to 1,800 apartments to global investors in a campaign to be launched this month. Depending on the final decision of how many apartments to include in the sale, it is believed that the deal may have a value in excess of €500m. While the new homes will not be available for owner-occupiers, the move may still be welcomed by the Government, which wants to see large scale development of properties for the rental market. While the forward-funding of properties is common in mature markets such as Germany, the move marks a new departure for the Irish market, and provides evidence of a new institutional market here for long-term residential investment. The Irish Independent, 11th May 

Heuston South Quarter: The Sunday Times reports that Marathon Asset Management is lining up the sale of over 340 apartments at the Heuston South Quarter development in Dublin. Marathon, a New York investment group, acquired the properties through a distressed loan sale in 2014, and it is believed that the scheme, which is located close to Heuston train station, is likely to sell for over €100m. The Sunday Times speculates that likely bidders for the scheme could include IRES REIT, Kennedy Wilson and SW3 Capital. The Sunday Times, 14th May

Cairn Homes Site Sales: Cairn Homes is selling several small non-core residential development sites in an off-market transaction. Together, the sites are expected to sell for more than €30m. The sites are mainly smaller development opportunities that the company acquired in 2015 when they purchased the Project Clear loan portfolio from Ulster Bank. The sale is believed to be attracting interest from mid-sized homebuilders who have had difficulty in securing suitable sites for development. The Sunday Times, 15th May

Shrewsbury Road Site: The Irish Independent reports that a prime site on Shrewsbury Road, Dublin 4’s most exclusive thoroughfare, is expected to be brought to market shortly with a guide price of c. €10m. Number 20 Shrewsbury Road was the former home of the Chester Beatty Library, and is expected to attract significant interest due to its development potential. In 2009 O’Malley Homes and Development, the property’s current owners, received planning permission for the development of seven houses on the site, and although that permission has expired, The Irish Independent reports that prospective purchasers could reasonably expect to secure a similar approval in the future. The Irish Independent, 14th May

Hawkes Road Site, Cork: Savills is guiding €3.8m for a 2.2-acre site at the junction of Bishopstown Road and Hawkes Road in Cork, along with four well-built 1,500 sq. ft. houses on the Curraheen Road, capable of earning €80k p.a. in rental income. In 2006, planning permission was granted for 73 units on the site, in a mix of apartments and terraced houses. The Irish Examiner reports that the site was part of the c. €800m Project Arrow loan portfolio, which Cerberus acquired over a year ago. The Irish Examiner, 11th May

Chapelizod Apartments Application: Midgard Construction Ltd has lodged a planning application with Dublin City Council to demolish the existing factory complex on the site of the Faulkner Industries complex in Chapelizod in west Dublin and construct 171 new apartments. The new apartments will consist of 53 one-bedroom units, 92 two-bedroom units and 26 three-bedroom units in two five-storey apartment blocks over a single level basement. NAMA Wine Lake, 14th May

Dollymount Avenue Housing Application: Dollymount Avenue Partnership has applied to Dublin City Council for permission to build 13 houses on Dollymount Avenue in north-east Dublin city. The application proposes the construction of 12 four-bedroom houses and one detached house, all of which will be three-storeys tall. NAMA Wine Lake, 14th May 

Harold’s Cross: CreKav Trading GP has sought planning permission from Dublin City Council to construct 180 apartments on the site of the Mount Argus church in Harold’s Cross in Dublin. NAMA Wine Lake, 14th May 

Residential Property Prices: According to the latest property price index from the Central Statistics Office (CSO), residential property prices increased by 9.6% in the year ending March 2017. For the month of March 2017, national prices rose by 0.1%. The biggest annual increases were recorded in the South-East (excluding South Tipperary), where prices increased by 15.5% YoY, while prices in the West increased by 15.3%. In Dublin, prices increased by 8.2% overall, with house prices increasing by 8% and apartment prices rising by 9.6%. The highest house price growth in the Dublin region was in Dublin City (10.7%), while the lowest growth was in Fingal (2.2%). When Dublin is excluded from the figures, residential property prices rose by 11.8% nationwide. Overall, the national index of prices remains 31.5% lower than at the height of the boom in 2017, however prices have increased by 50.4% from the low point recorded in early 2013, with Dublin residential property prices having increased by 67.6% in that period. The Irish Times, 12th May

Household Net Worth: New figures from the Central Bank show that the net worth (the value of assets minus liabilities) of households in Ireland increased by c. €7.2bn in Q4 2016 to stand at c. €654bn, or c. €137k per household. In addition to rising property prices, the strong paydown of debts by consumers is also among the key factors behind the improvement in the net debt position. The net worth of households has increased by 51% since the bottom of the market, which occurred after the global financial crisis. However, the figure remains 9% lower than the peak level obtained during Q2 2007. Household debt is also falling fast – having declined by c. 30% in cash terms from the peak to c. €144bn. The Central Bank noted that household debt as a proportion of disposable income has fallen faster in Ireland than any other EU country, and now stands at 140%, down from a peak of 194% in 2012. Despite this, Ireland still has the fourth highest levels of indebtedness in the EU. The Irish Independent, 11th May


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