17th January (Issue 79)

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.



2016 Review / 2017 Outlook: CBRE’s 2016 review of the Irish commercial property market reveals that c. €4.5bn of investment transactions were completed, with the sales of Blanchardstown Town Centre and Liffey Valley Shopping Centre being the most significant (over €1.5bn combined). Prime rents in each commercial sector rose in 2016, with office rents reaching €62.50 psf, Zone A retail rents on Grafton Street approaching €600 psf (c. 11% increase) and industrial rents nearing €8.75 psf (over 25% increase). While prime rents in each sector are projected to continue to rise in 2017, it is the industrial sector which CBRE is expecting to perform best, with growth of c. 13.9% anticipated. Prime office rents in Dublin are projected to increase by 1.9% and high street retail rents are projected to grow by nearly 8%. CBRE, Ireland Real Estate Outlook 2017



Dublin Retail Rents: According to research from Capital Economics, retail rents in Dublin have risen by c. 43% between the beginning of 2013 and Q3 2016, the strongest rate of growth in any Eurozone city covered by their research. The report states that rising rents have been supported by the growth in consumer spending, which has been underpinned by a strengthening labour market and strong wage growth. However, the rate of growth slowed significantly in 2016 (in annual terms, rents grew by almost 4% in Q3 2016, compared with growth of 38% in Q1 2015), as factors such as political instability and the Brexit result have weighed on consumer confidence. Capital Economics expect Ireland to experience some of the strongest consumption growth in the Eurozone this year, as a result of the strengthening labour market, supply shortages in key areas such as Grafton Street and the opening of Luas Cross City, improving access to and increasing footfall in Dublin’s prime shopping locations. Capital Economics, January 2017 

Park Shopping Centre: Park Shopping Centre Ltd, the owners of the 12-unit Park Shopping Centre on Prussia Street in Dublin 7, has lodged an application with Dublin City Council to demolish the existing centre and construct a new shopping centre and major student accommodation complex. The application seeks approval for the construction of a new 7-storey development featuring three levels of retail space and 540-bedspaces of student accommodation in 105 residential units. A surface / basement carpark with 117 spaces is also included in the application. Nama Wine Lake, 15th January



9 Merrion Square: Lisney is guiding over €3m for a vacant Georgian four-storey-over-basement office premises at 9 Merrion Square in Dublin 2. The mid-terrace house dates from 1960, and will offer buyers an opportunity to convert one of Dublin’s grand Georgian houses into a prestigious home. The property extends to 5,942 sq. ft. and comes with five car-parking spaces at the rear. The property is currently reported to be in exceptional condition, and retains many original period features including crystal light fittings, sliding sash windows and a fireplace. The Irish Times, 11th January

Dublin 8 Development: Como Lake Ltd, a British incorporated company, has lodged an application with Dublin City Council to demolish a 20,000 sq. ft. print works in Dublin 8 and construct an 80,000 sq. ft. four-storey office building. The 0.6-acre site is located on Donore Avenue and is adjacent to the Grand Canal. Nama Wine Lake, 15th January



Ship Street Hotel: A company backed by Eamon Waters of Panda Waste has received planning permission from Dublin City Council for a seven-storey, 124-bedroom four-star hotel located on Ship Street, near Dublin Castle. It is believed the new hotel will cost up to €30m to build, and will also include meeting rooms, a gym, a bar and a restaurant. Waters acquired the 0.2-acre site for c. €4m. Sunday Times, 15th January. 

Docklands Hotel: A company controlled by Paddy McKillen Jnr and Matt Ryan has been granted planning permission by Dublin City Council for the development of a new hotel at 82 North Wall Quay in Dublin’s docklands. The new hotel will contain 60 bedrooms, a rooftop bar and restaurant, a ground floor bar and restaurant and a coffee shop and terrace area. The project will involve the restoration of the neighbouring 19th century building at 81 North Wall Quay, returning it to its use as a former pub. The two buildings will be joined internally on the ground floor, and an additional two floors will be added to Number 82, resulting in a five-storey building. Construction is due to begin in the next three months, with the hotel scheduled to open for business at the end of 2018. The Irish Independent, 12th January



Hew Housing Completions: Figures from the Department of Housing have shown that in the first 10 months of 2016, just under 11,800 homes were completed nationally, with a full-year figure of less than 15,000 expected. This is significantly below the minimum of 25,000 housing units which are currently required p.a. Although there are currently 126 ‘active’ sites in Dublin (with 5,500 homes under construction), The Irish Independent questions why large swathes of land, particularly in Dublin, aren’t being developed for housing, particularly when planning permission is in place in many instances. It highlights that there are 331 sites in Dublin which are capable of delivering an additional 23,746 housing units. In addition, data shows that 10 developers have obtained planning permission to build 11,928 homes. However, only 1,935 of these have been completed, with a further 1,010 under construction, leaving 8,983 units with planning permission which are not currently being developed. Reasons cited for the failure to build homes include difficulty assessing development finance and high building costs. The Irish Independent, 14th January

Dundrum Development Site: CBRE is inviting offers of €4m for a residential development opportunity in Dundrum, Dublin 14. The 1.8-acre site is located on Taney Road, and includes two houses – St Anne’s and Annefield House, a two-storey over basement double fronted dwelling. According to CBRE, there is scope to develop a further 12 houses on the site, which could vary from mews buildings to large detached properties. The Irish Times, 11th January

Kilkenny Investment: CBRE is guiding c. €3.95m for 13 residential units and an additional development site close to the M9 motorway at Castlecomer Road in Kilkenny. The properties consist of three large five-bedroom houses, four four-bedroom semis, one three-bedroom duplex apartment and five two-bedroom apartments. Of the 13 homes, ten have been fully completed, while three require further fit-out. The development site extends to 1.7 acres, and has lapsed planning permission for a further seven houses. The Irish Times, 11th January

Clonskeagh Development: Gannon Homes has begun the site preparation for a new apartment development on a three-acre site in Clonskeagh, Dublin 6. The new homes will be larger than usual, and will contain 78 two-bedroom units and 18 one-bedroom units, with 14 penthouses in total. The apartment scheme is expected to be completed by 2018, with selling prices expected to be in the €600k – €700k+ range. The four-storey building will be set back at penthouse level, and will have a landscaped courtyard, river views, weir and tree-lined banks. The Irish Times, 11thJanuary 

Docklands Residential Figures: According a report by auctioneer Owen Reilly, Dublin’s docklands saw a marked rise in both purchase and rental prices in 2016. The report states that residential property prices rose by 11.7% and rents rose by 12.1%, with asking prices being significantly higher than those seen generally in Dublin city centre. 72% of properties in the area were bought for investment purposes, and 76% of purchases were made with cash. The report found that 72% of purchasers were Irish, while 85% of tenants who rented properties in the docklands were from overseas. The Irish Times, 11th January

Mortgage Interest Rates: New figures from the Central Bank show that the weighted average interest rate on new mortgage agreements was c. 3.38% in November 2016, representing a decrease of 28 bps YoY. This rate is still substantially above the Euro Area rate, which was c. 1.72%. The weighted average interest rate on new variable rate mortgage agreements was c. 3.38%. Variable rate mortgages accounted for two-thirds of all new mortgage agreements over the last year. Central Bank of Ireland, Retail Interest Rates – November 2016 

Rural Housing Restoration Grant: Home buyers could be offered renovation grants to restore properties in small towns and villages as part of the Government’s Action Plan for Rural Development which is being brought before cabinet today. The scheme is aiming to attract all house buyers, but specifically older people and first time buyers, back into rural communities which suffered as a result of unemployment during the recession. As part of the scheme, young people who purchase homes in designated rural towns would receive cash grants to renovate their homes, and would also be eligible for the tax relief available under the new first-time-buyers scheme. It is hoped the grant will also encourage older people living alone in more rural locations to move into town centres where more services and social interaction is available. The scheme is currently believed to be at an early stage of development, and could be introduced initially on a pilot basis. The Irish Independent, 17th January


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