17th November (Issue 21)

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.



Elm Park: Starwood have been chosen as the preferred bidder for NAMA’s Elm Park development on Merrion Road in Dublin 4, which was guiding €185m. The US fund bid close to €200m for the development, which was built at a cost of c. €550m in 2007. A joint bid from Joe O’Reilly’s Chartered Land and Ares Investment Fund was the second highest bid submitted, while Lone Star also bid for the development. Elm Park is a c. 17.3 acre complex featuring over 350,000 sq. ft. of office space and 226 residential units. The Irish Times, 11th November



Ballsbridge Development: D4P Holdings, who are registered in Gibraltar, have sought planning permission for their 0.5 acre site at 10 Pembroke Road in Ballsbridge, Dublin 4. The planning application seeks approval for the development of 30,000 sq. ft. of office space and 43 serviced apartments spread over 22,000 sq. ft. D4P Holdings already have planning permission for a smaller 40,000 sq. ft. office / residential scheme on the site, which was obtained earlier this year on appeal. There is an existing 20,000 sq. ft. office building on the site, which would be demolished should any development proceed. NAMA Wine Lake, 15th November

Windmill Lane: Hibernia REIT is anticipating rental income of €55 psf for a 120,000 sq. ft. office property it is developing in a joint venture with Starwood on Windmill Lane in Dublin 2. The property, which will be known as IWML, is expected to be completed in H2 2017. Hibernia originally purchased the one acre site from Starwood in June 2014, however Starwood retained and have since exercised an option to buy back a 50% stake in the property. JLL and DTZ Sherry Fitzgerald have been appointed as joint letting agents for IWML. The Irish Times, 11th November

Docklands Site: CBRE are guiding €1m for a 0.128 acre site which fronts onto Gloucester Street in Dublin’s south docklands. The site comes with planning permission for an eight storey, 45,456 sq. ft. development for office, residential and retail facilities, which was approved in 2008. As the site is alongside a derelict warehouse owned by Dublin City Council, the site could pave the way for a larger development should an investor acquire the two sites. The Irish Times, 11thNovember



Hotel Supply: Aiden Murphy of Crowe Horwath believes the government needs to look at streamlining the planning process for new hotels as Dublin faces a chronic shortage of hotel beds. Crowe Horwath identify planning and funding as the key issues surrounding hotel development. Currently it takes over three years to develop a hotel, and developers are having difficulties obtaining the funding. With NAMA recently announcing a mandate to deliver 20,000 new homes over the next five years, Crowe Horwath suggest a similar measure should be assessed to enable the development of hotels in the capital. The Irish Times, 11th November



McDonalds Cork: An overseas investor is hoping to make a quick profit from the sale of No 4 and 5 Winthrop Street in Cork, which he bought in 2014 for over €4m. Agents Cohalan Downing are now guiding €5.2m for the 10,000 sq. ft. property, which is occupied by McDonalds on a 35 year lease from 1985. With McDonalds currently paying an annual rent of €372k, the property offers a gross yield of c. 7.15%. The property drew significant interest when it went on the market last year for €3.5m, with 15 tenders submitted. The Irish Times, 14th November



Wellington Place: Two weeks ago a detached Georgian Townhouse owned by Seamus Ross at Number 31, Wellington Place, Dublin 4 went on the open market for sale at €4.65m. It has now been sold for nearly €5m to a Dublin buyer, making it one of the fastest open market sales in the Dublin market in the past few years. The four bed, 5,414 sq. ft. property features a pool, sauna and gym at basement level. It was previously put up for sale under auction in 2008 with a guide price of €12.5m, however it failed to sell. The property was sold by agents Hunters under the instructions of receiver Grant Thornton. The Irish Times, 13th November

D4 Apartment: Knight Frank are guiding €2.5m for a luxury three-bed apartment in Ballsbridge, Dublin 4. 65 Shrewsbury Square was completed in 2008 as part of a 60 apartment scheme and was originally two apartments. The walls between the two apartments have since been knocked, bringing the total floor space to 1,927 sq. ft. The property previously sold for €1.375m in September 2011 and has since undergone an extensive refurbishment. The property has two balconies and two car spaces. The Irish Times, 12th November

Development Land: The price of development land is expected to rise further in the short term as demand for sites increases. John Swarbigg of Savills believes that land values have risen by c. 20% in the Greater Dublin Area this year. Land with planning permission for between 20 and 40 residential units is viewed by Evan Lonergan of Knight Frank as the market segment which is the most sought after, as builders look to either return to development or expand their existing business. The Irish Independent, 12th November

Mortgage Figures: The latest figures released from the Payments and Banking Federation suggest that the introduction of the Central Bank’s mortgage lending criteria is affecting the mortgage lending market. While the volume of new mortgage drawdowns rose 15.6% YoY in Q3 2015, this is distinctly lower than the YoY increases in Q2 2015 (30%) and Q1 2015 (64%). The number of new homes built in 2015 is also expected to fall well short of the required level. According to Davy economist Conall Mac Coille, there will be less than 13,000 new homes built in 2015, with c. 25,000 homes needed to satisfy demand. The Irish Times, 15th November



Hibernia Facility: Hibernia REIT has obtained a €400m credit facility from Bank of Ireland, Ulster Bank and Barclays, which it is expected to use to expand its existing property portfolio. With 83% of Hibernia’s portfolio located in Dublin’s Central Business District, chief executive Kevin Nowlan confirmed that they will continue to focus on assets in this location. Hibernia have also refused to rule out any future loan portfolio purchases. The six month period ending in September 2015 has been very lucrative for Hibernia, with pre-tax profits of €73.7m more than double the €32m achieved in the same period in 2014. The Irish Times, 13th November

Orion Business Campus: An unnamed investor has paid the guide price of €8.5m for a corporate HQ at Orion Business Campus at Ballycoolin, Dublin 17. The 76,454 sq. ft. property had been on the market through joint agents William Harvey and Lisney. WR International, an Irish registered company, occupy the property on a 25 year lease from 2006 at an annual rent of €675k. Upward only rent reviews occur every five years and there is also a tenant only break option in 2027. The rent is guaranteed by the US firm VWR International, who have turnover in excess of USD$4.1bn. The Irish Times, 11th November

JD Wetherspoon: A former church on Lower Abbey Street in Dublin’s city centre recently sold at auction for almost four times its €400k guide price. JD Wetherspoon emerged as the successful bidder at €1.475m, after no less than 77 bids were recorded. JD Wetherspoon also own the former TSB bank alongside the 4,240 sq. ft. property and are reportedly interested in converting the properties into a gastropub. The Irish Times, 11th November 

Industrial Market: New figures from Savills highlight the strong recovery in the industrial market in 2015. Market take up for the first nine months of 2015 was over 3,875,000 sq. ft., almost double the level of take up in 2014. Southwest Dublin remains the most sought after area for industrial space, responsible for over 53% of transacted space in Q3 2015. While capital values have risen by c. 17% since the bottom of the market in Q3 2013, demand for units remains strong as the cost of constructing new units remains much more expensive than purchasing completed units. The recovery in the sector has also resulted in a compression of yields from 10% to 7.7% in the 12 months to September 2015. The Irish Times, 11th November


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