18th April (Issue 393)

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.



Garryglass Business Park, Limerick Joint selling agents Lisney and Property Partners De Courcy O’Dwyer are guiding €2.7m for Units 1-7 Garryglass Business Park, Limerick (NIY 6.06% or €57.71 per sq. ft). The five commercial units totalling 46,787 sq. ft and a 90 space car parking area to the front, are located on a 2.59-acre site zoned for retail warehousing with 120 metres of frontage onto the Old Ballysimon Road. Ancillary parking, loading areas and yard space are located to the side and rear.
Tenants include The Panelling Centre, owned by Grafton Group; Luminaire Lighting; Slide Deco; and Blue Box Antiques. Annual rent is €179,800 with one 2,566 sq. ft unit vacant. The Panelling Centre accounts for 72% of the passing rent and has a secure lease term of six years. The Irish Independent, 13th April

Baldonnell, Dublin 22 Industrial and logistics property development specialist Mountpark has pre-let the sixth unit; Unit F, a 72,646 sq. ft logistics facility, at its Baldonnell development in Dublin 22. The unit which is due for completion in April, is being leased to the Danish-owned logistics giant DSV. Mountpark has already attracted a range of high-profile international and domestic occupiers including DB Schenker, United Drug and Home Store + More. The final facility at Baldonnell, Unit G, which will extend to 96,930 sq. ft, is under offer and it is expected that the prospective occupier will take possession in May. The development of units F and G alone represents a €47m investment by Mountpark and brings its total investment across the seven facilities at Baldonnell to more than €300m. The overall scheme extends to 1,386,189 sq. ft with all buildings pre-let before their practical completion. CBRE and Cushman & Wakefield are joint agents. The Irish Times, 12th April

Dublin Industrial and Logistics Market Dublin’s industrial and logistics market continues to experience strong demand and limited suitable supply, according to agents Savills. New figures reveal that over 1m sq. ft of take-up was recorded in the first three months of the year – the strongest Q1 on record. Pre-lets remains prevalent and accounted for 49% of take-up. 70% of space due to be delivered this year is either reserved or signed. The largest letting in the Q1 was Building 2 Greenogue Logistics Park in west Dublin and it was also the third largest on record, with over 286,000 sq. ft signed by Wincanton, a distribution contractor of Ikea. Jarlath Lynn of Savills commented: “Given the preference for modern units, lack of availability, and increased construction costs for continually enhanced specification, this has supported the increase in prime rents from €12 to €12.50. Secondary rents have also experienced an increase from €9 to €9.25 per sq. ft,” About 2.1m sq. ft is expected to be delivered this year, another record. The Irish Independent, 13th April

Cork Airport, A mixed office/logistics building just shy of 8,000 sq. ft has become available at Cork Airport after Fedex took 50,000 sq. ft at Blarney Business Park. This airport-adjacent building has 5,020 sq. ft of warehousing and 2,870 sq. ft of offices, in a two-story block with a mix of open plan and private offices. Loading access is via three sectional loading doors to the front, one with dock level loading, while the one to the rear which can provide direct airside access. Tenants can have direct airside access if required and neighbouring occupiers include Swissport, Weston Aviation and Worldwide Flight Services. Rent sought is €100,000 p.a. and agents Lisney say the property “will appeal to a range of warehouse, distribution and light industrial uses. There is a shortage of available warehouse / industrial accommodation particularly on the southside of the city and the strategic location of this property in Cork Airport will appeal to a range of potential occupiers.” The Irish Examiner, 13th April



Powerscourt Hotel Resort and Spa, Wicklow In a submission rebutting a planning appeal against the approval granted for the 56-bed staff block at the luxury hotel located near Enniskerry, McGill Planning, consultants for the five-star Hotel, commented that staff accommodation on the grounds of the hotel is a reasonable solution to the housing and rental crisis and staff shortages facing the hospitality industry. Scalaheen, a company controlled by the Slazenger family who own the Powerscourt Estate, lodged an appeal last August against the decision by Wicklow County Council to grant permission to the Wicklow Hotel Partnership for the staff accommodation that would be sited on an existing car park. The hotel sought permission for the staff quarters last June, as it was having to house staff in 25 hotel suites at the resort due to the lack of accommodation locally. The Irish Times, 12th April



Dawson Street, Dublin 2 Bannon is guiding €5.8m for 22, 23 and 23C Dawson Street. Based on the €311k annual rent, a sale at this level would represent a 5% yield. The ground floor and basement level of number 22 Dawson Street is let to the Italian restaurant Nannetti’s, at €80k p.a. on a 10-year lease which commenced in June 2020. CPI rent review is due in 2025. The ground floor and basement level of number 23 is let to Robert Lamb, trading as Sunglasses.ie, at €35k p.a. on a 10-year lease dating from April 2018, with an open market rent review due now. 23C Dawson Street is let to Rateridge Ltd, trading as the café Tang, on a 20-year lease from June 2010. The current rent is €40k p.a. with five yearly open market rent reviews. A further €156k is generated p.a. from the four apartments overhead. The Irish Times, 12th April



35 Cathedral Court, Dublin 8 Agent QRE Real Estate Advisers completed the sale of the second and third floors at 35 Cathedral Court after letting them to two new tenants on 10-year leases with term-certain income of about five years. They were sold to a private Irish investor for €2.25m. Currie and Brown have taken occupation of the second floor while Cuckoo Events is now operating from the third-floor space. The property was previously occupied by DMOD Architects who have relocated to the Capel Building. The price paid for the investment equates to a net initial yield of approximately 7.5% and represents a capital value of around €422 per sq. ft. The Irish Times, 12th April

CBRE Dublin Office Market Overview Q1 2023 Despite a slowdown in the technology sector, the outlook for the Dublin employment market remains positive. The national unemployment rate was just 4.3% at the end of Q1. Dublin office take-up totalled 284,565 sq. ft in Q1, down 42% versus Q1 2022, and 54% below the 10-year Q1 average of 613,543 sq. ft. The largest deal of the quarter was signed by data analytics SaaS provider ‘Datadog’, who agreed an 8-year sub-lease for 43,777 sq. ft at One & Two Dockland Central. Assignment and sub-lease deals accounted for over 40% of all take-up in Q1, the largest quarterly proportion on record. The vacancy rate across all stock in the Dublin market is now 13%, while the vacancy rate for grade A stock is marginally lower, at approximately 11%. CBRE Ireland has conducted an extensive study on the supply of ‘Grade A+’ offices in Dublin. The findings of which show the lack of sustainable offices in the city at present. Office investment volumes were lower in Q1, totalling €93m, while prime yields continued to soften, now standing at 4.50%. CBRE Report, 12th April



42 – 43 Henry Street, Dublin 1 German property investment company, Institutional Investments Partners GmbH, wants to convert unused floors above a shop on the corner of Henry Street and Moore Street into eight apartments. Under the plans the first, second and third floors would be converted into two studios, five one-bedroom apartments and one two-bedroom apartment, with a communal roof garden and a shop space retained at the ground floor. The property was until recently occupied by Suits Direct on the ground floor but is currently vacant. The Irish Times, 17th April

235 acre Celbridge, Co. Kildare Cushman & Wakefield has sold 235 acres known as “Castletown lands” to Killross Properties and Springwood, for more than €5m. Situated immediately adjacent to the landmark Castletown House and its demesne, which is owned by the State and open to the public, the “Castletown lands” are predominantly zoned Objective F – Open Space and Amenity under the Celbridge Local Area Plan 2017-2023. The remaining portion of the site is zoned GB – Green Belt. The lands are designated within a Historical Landscape Area and have mostly been in agricultural use for several years. The buyers of the landbank are family-owned property firms based in Straffan, Co Kildare. Both companies have a long history of developing residential and commercial schemes in north Kildare. The Irish Times, 12th April

Land Tax Dublin City University (DCU) faces a large bill over undeveloped land it owns on Griffith Avenue under the new land hoarding tax rules, after its efforts to secure an exemption were rejected. The Residential Zoned Land Tax (RZLT) will come into force next year. Approximately 10,000 hectares of serviced residential development land across the country has been identified within the scope of the tax, which could yield more than €300m a year. Some of the state’s biggest developers, including Glenveagh, Cairn, Ardstone, Michael O’Flynn and Park Developments, have applied for exemptions from the tax for their unused land zoned for residential use. Several state bodies have also sought exemptions, including IDA Ireland, the Central Bank and the Land Development Agency. Dunnes Stores could also face millions of euro in land-hoarding levies over three sites it owns in Dublin and Cork. Business Post, 12th April

Land Development Agency (LDA) which was set up in September 2018, and has a budget of €2.5bn to accelerated the construction of 150,000 homes on state lands over 20 years, could have the new RZLT imposed on it. This could equate to tens of millions of euro a year. The LDA has warned this could increase the price and rents of affordable homes. Last month, a report by the LDA said 24 sites, worth hundreds of millions of euro, had been identified for housing, including one 57.6 acre site currently owned by Horse Racing Ireland near Leopardstown Racecourse which is due to be transferred to the LDA, and could hold between 1,500 and 2,000 homes. Similar sized sites have been advertised for €50m. Dun Laoghaire-Rathdown County Council has told the LDA that the site will face the new RZLT from next year, which is a 3% levy on a site’s market value. The Department of Finance has said the RZLT rules did not provide an exemption from the tax based on different types of ownership. The LDA said the agency was engaging with the council about the site to ensure timely delivery of the homes. Business Post, 16th April

BNP Construction Activity Index Ireland’s construction activity continued to fall slightly during March. Posting at 49.5, down from 49.8 in February, the latest reading signalled a sixth successive reduction in total activity. On a more positive note, growth in new orders, employment and input buying were all sustained and there were some tentative signs of cooling in terms of inflationary pressures. Activity was down in two of the three broad categories of construction covered by the survey. The sharpest fall was seen in civil engineering with the latest reading signalling a marked fall in activity. The downturn in housing was similarly solid and the sixth in as many months. Meanwhile, commercial continued to buck the wider trend and saw activity expand for the second month in a row.
Commenting on the latest survey results, John McCartney, Director & Head of Research at BNP Paribas Real Estate Ireland, said: “Three trends are evident. Firstly, overall construction activity contracted, but marginally, and at a diminishing rate through the quarter. Secondly input cost inflation slowed markedly. Thirdly, every forward-looking indicator on the PMI dashboard switched from negative to unambiguously positive. Order books strengthened progressively through the quarter.” BNP Paribas Report, 17th April

Ulster Bank Non-Performing Home Loans Up to €1.5bn of non-performing home loans are due to be sold by Ulster Bank, affecting thousands of homeowners. PwC are running the process for Ulster Bank. Cerberus, CarVal, Apollo and Lone Star are among the leading contenders for the portfolio, which mostly contains mortgages attached to family homes and buy-to-let properties. Some potential buyers have already signed non-disclosure deals with Ulster Bank ahead of the opening of a data room for the assets. The bulk of the Ulster Banks’s assets were transferred to Permanent TSB, including a €6.2bn performing, non-tracker residential mortgage book, while the bank’s €5.7bn tracker mortgage portfolio was sold to AIB. The Sunday Times, 16th April


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