17th August (Issue 310)
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.
MIXED USE
Dame St, Dublin 2 A landmark pub in Dublin city centre has been sold for close to €6 million, in one of the biggest deals in the pubs market this year. The Oak occupies a prominent position on the corner of Dame Street and Parliament Street. Olympia Capital, the investment company behind Bru Brewery and Bru Hospitality, is believed to be the buyer of the property, which includes ten self-contained apartments on the upper floors. Owned by the brothers James and Edward Dunne, and Frank Byrne, a chartered accountant, the company has been building a sizeable pub and craft brewing group. In 2019 it purchased Meath-based Bru Brewery and merged it with Leitrim-based Carrig Brewing, which Olympia already owned. It has since been extending its product range and launched an online shop during lockdown. The company already has five venues across Dublin, which are run by its hospitality arm: Bar Rua on Clarendon Street, Catch-22 restaurant and Clarendon suites above it, Bru House in Fairview, The Bridge in Chapelizod and Bru House in Kilmainham. John Ryan of Bagnall Doyle MacMahon was acting on behalf of the sellers, a group of investors. The Sunday Times, 15th August
RETAIL
HOTEL
OFFICE
Albert Quay, Cork The developers behind a proposal to build a 16-storey office block on the site of the former Sextant pub at Albert Quay in Cork have been asked to address its demolition as part of a request for further information from Cork City Council. The bar was demolished a year ago after Progressive Commercial Construction Ltd, part of the John Cleary Developments (JCD) group, was granted planning permission for a 25-storey build-to-rent scheme at the city centre site. However, earlier this year, it has emerged that the residential plan had been scrapped, following an appraisal process by consultants Deloitte. Jude Sherry and Frank O’Connor, directors of global design agency Anois argue that under the new plan, the developer does not have permission to demolish the Sextant because the current office block application “fails to include a request to demolish the 145-year-old NIAH building” and that the application is therefore “invalid”. A spokesperson for the JCD Group said a detailed response is currently being prepared by the project design team in response to the Council’s request for further information. The Irish Examiner, 12th August
RESIDENTIAL
Housing, Ireland A report compiled by property economist Ronan Lyons and industry body Irish Institutional Property (IIP) claims that the State will need to build almost 50,000 homes a year for the next 30 years to satisfy the country’s demand for housing units. This would require an annual capital investment of €16 billion, most of which would have to come from foreign investors. This report comes in the aftermath of the CSO figures released on Thursday that show house prices rose at an annual rate of 6.9% in June, the fastest level of growth seen in 2½ years. The 50,000 figure is significantly higher than the Government’s 35,000 housing output targets, and more than double the current level of supply, which was 21,000 last year. The challenge is worsened by very high construction costs, relative to ordinary incomes and to costs in other countries. The report further suggests the need for housing and the capital to fund it will be split across the three main tenure categories: owner-occupied, market rental, and social housing. The Irish Times, 12th August
RTB Report Large landlords controlling thousands of homes in Ireland have the financial clout to leave them empty rather than reduce rents, and believe it is “prudent” to do so “to see how the market responds”, a new report by the Residential Tenancies Board (RTB) has said. The finding was contained in an RTB report that was produced following a survey of large landlords with more than 100 properties under their control in Ireland. The report said there were fewer than 70 landlords with more than 100 tenancies registered with the RTB in February 2021. The nine large landlords surveyed by the RTB owned and managed between hundreds and, in some cases, thousands of rental homes. The new report by the rental sector watchdog surveyed a selection of large operators, that control thousands of units, as part of a detailed review of the sector. The RTB said that despite the pandemic, large landlords and funds operating in Ireland have not experienced a significant financial hit. It added that this has made it easier for them to leave homes vacant. The Business Post also previously reported how large landlords and estate agents have sought to potentially circumvent pricing control rules by offering prospective tenants incentivised rates on leases, which can mask a decline in rents. No large landlord interviewed by the RTB said they intended to exit the market, but this is in stark contrast to the number of smaller landlords leaving the sector. New data from the RTB showed there were 498 notices of termination issued by landlords, who intend to sell their properties, between April and June this year. The Business Post, 15th August
Rental Market Following the report by Daft.ie on rent prices in Ireland, Marian Finnegan, the managing director of residential and advisory at Sherry Fitzgerald cited an exodus of private landlords from the sector as a probable reason for the sky-high rent prices. According to Finnegan, the many regulations in place and an onerous taxation burden are the reasons why so many landlords are exiting the rental sector. She further stated that big institutional investors focus more on big cities rather than rural areas of the countries. Finnegan called for the Government to adopt a 25–30-year plan to tackle the housing crisis in a specific and refined approach, such as targeting new stock to the areas of the country where it is most needed and where employment opportunities are located. The Irish Times, 12th August
Local Property Tax The inclusion of build-to-rent apartments in the property tax net could result in a larger than expected tax windfall for the Revenue Commissioners. When the property tax was introduced in 2013, there was an exemption for all newly built homes to encourage housing construction and sales. This exemption has remained in place ever since, meaning that it also applied to all new build-to-rent apartments and houses. According to Revenue, approximately 79,000 homes built between 2013 and 2020 are now likely to be brought into the scope of local property tax, but this figure is well below the 101,042 new homes that are recorded as having been built by the CSO in the same period. The government is expecting to bring in €560 million next year, but the addition of up to 21,000 additional new homes could boost this figure further. The Business Post, 15th August
Baldoyle, Co. Dublin Avestus plans to charge a local authority an average of €554,000 for 3-bedroom apartments as part of a planned 1,221 home development in Baldoyle, Co Dublin. Documents submitted with the application show the developers have arrived at an overall figure of €46.4 million for the sale of 122 apartments to Fingal County Council to meet an obligation of providing 10% of units in new residential developments to the state for social housing. Avestus hopes to charge the council more than €427,000 on average for 58 2-bedroom apartments and around €282,000 for the 1-bedroom units. The proposal would reach 10 storeys at its highest points, higher than the 4.5 storey limit set down by the council and would result in a significant quantum of residential development on a strategically located site in Dublin. The Business Post, 12th August
Richmond Gardens, Dublin 3 Ires Reit, the biggest landlord in the state, has paid €506,000 to buy one 13-year-old apartment in Dublin 3, nearly double the median price for a two-bedroom apartment in the capital. The purchase completes its acquisition of all homes in Richmond Gardens, a 99-unit residential development in Drumcondra. In 2019, Ires Reit bought the other 98 apartments in the development for a total price of €34.5 million, which is an average of €352,000 per unit. The latest purchase now means it has outright ownership of Richmond Gardens. The deal for the final apartment, while completed in particular circumstances, illustrates the company’s spending power in the market. The €506,000 price it paid was nearly double the median price for a two-bedroom apartment in Dublin, which was recorded at €258,000 in the first quarter of 2021, according to MyHome.ie, the property listings website. Two-bed apartments in Richmond Gardens are currently being advertised for rent on Daft, the property website, at between €1,959 and €2,040 a month. The average rent for an apartment in the area is €1,887. Ires Reit’s portfolio of 3,836 homes is now valued at more than €1.4 billion, up 5.6 per cent compared to this time last year. Average rents in its portfolio also increased by 2 per cent from €1,599 to €1,641, as a result of acquisitions during the period. The Business Post, 15th August
Sandyford, South Dublin An Bord Pleanála has refused permission to Patrick Crean’s Marlet Group for a 428-unit build-to-rent scheme on Carmanhall Road due to sub-standard parking for bicycles. The scheme includes a ”landmark” 17-storey tall apartment block at the former Avid Technology International site on Carmanhall Road at the Sandyford Industrial Estate. The facilities at the €144 million scheme were to include a gymnasium, a cinema, yoga studio, cafe and lounge. In its refusal to Atlas GP Ltd’s Strategic Housing Development (SHD), it found that the scheme would result in a sub-standard level of residential amenity for future occupants of the apartments. Dún Laoghaire Rathdown County Council had recommended to the board that planning permission be refused on three separate grounds including the density and height of the scheme. The Irish Times, 16th August
Enniskerry, Wicklow An Bord Pleanála has given the green light to plans for a €60 million “fast-track” residential development for Enniskerry, Co Wicklow, in spite of a representative body for the Church of Ireland expressing concern over the plan. The appeals board has granted planning permission to Cairn Homes for 165 residential units, made up of 105 apartments and 60 houses, on lands 1km south east of the Co Wicklow village in spite of strong local opposition. Wicklow County Council had also recommended to the board that planning permission be refused while 68 submissions were made by third parties. The council stated the scheme would be a material contravention of the local development plan and also represent a traffic hazard. However, the board stated that the site was located 20km from Dublin city centre, was served by public transport and could assist in the delivery of housing. The Irish Times, 17th August
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