18th August (Issue 8)
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.
PORTFOLIO / LOAN SALES
Project Arrow:
NAMA’s largest loan portfolio, the €7.2bn Project Arrow, is believed to have drawn the interest of at least five multi-billion euro funds. Cerberus, Lone Star, Deutsche Bank, CarVal and Apollo are among the primary candidates to purchase the portfolio, for which indicative bids were submitted last Friday. Per the information memorandum sent to prospective bidders, the portfolio consists of 367 borrower connections secured by 2,402 properties. The Sunday Business Post, 16th August
OFFICE
Block R Building:
The Central Bank has been selected as the preferred bidder for the Block R building at Spencer Dock, Dublin 1. The building had been on the market with a guide price of €90m through joint agents CBRE and Savills. The 128,000 sq. ft. Grade A office building is currently owned by Goldman Sachs, NAMA and Hines. Existing tenants include the Central Bank themselves and the OPW, with a current annual rent roll of c. €4.9m. The property is located near the Central Bank’s proposed new €140m headquarters in North Wall Quay. The Sunday Business Post, 16th August
Harcourt Terrace:
Lisney are guiding €3m for a 75% stake in 6 – 7 Harcourt Terrace in Dublin 2, a four storey over basement Palladian-styled property. The property measures 7,975 sq. ft. and has 8 car spaces. The whole of the property has been let to Burke-Kennedy, Doyle & Partners, who are occupying the property on a 35 year lease from December 1989. The contracted rent of €325,000 p.a. has been abated to €185,125 for the past four years. The Irish Times, 12th August
HOTELS
Hilton Hotel:
The four star, 120 bed Hilton Hotel on Kilmainham Square in Dublin is to be purchased by Tifco for an undisclosed amount. The current owner of the hotel is the Lalco Hotel Group, which is run by developer John Lally. Tifco is an Irish hotel operator backed by Goldman Sachs and currently operates hotels in Ireland and Germany under the Crowne Plaza and Holiday Inn Express brands. Goldman purchased Tifco’s loans from IBRC and then converted their interest into an equity stake in the company. The Sunday Business Post, 16th August
Ten Square Hotel:
Paddy Kearney’s Kilmona Group is believed to be close to completing the purchase of the Ten Square Hotel in Belfast. The boutique four star, 22 bed hotel was placed into receivership by Cerberus earlier this year. The debt attached to the hotel was sold to Cerberus as part of NAMA’s Project Eagle, with John Miskelly being the hotel’s former owner. The hotel was valued at c. GBP£4.2m per the latest accounts of Miskelly’s Yorkshire House Limited. NAMA Wine Lake, 16th August
Castle Oliver:
An Australian family have paid c. €3m for Castle Oliver in Ardpatrick, Co Limerick. The 14 bed, 23,000 sq. ft. castle is situated on 15 acres and had been on the market with a guide price of €2.95m. The new owners are planning to turn the property into their European residence, therefore it shall cease trading as a hotel. The previous owners were Emma and Declan Cormack from Northern Ireland. The Irish Independent, 14th August
RETAIL
Lidl Development:
Lidl is believed to have paid in excess of €2m for a site in Bishopstown, Co Cork. The site had been on the market with agents Coughlan Downing with a guide price of €1.3m. Lidl is now expected to seek planning permission to develop a new supermarket on the premises. The site is directly opposite a site where there is to be a new Aldi store, with Aldi’s unit close to completion. Aldi is believed to have paid c. €3m for their site. The Irish Examiner, 13th August
Elverys:
The sports retailer Elverys, which was bought out by management last year, has purchased a number of properties from the firm’s previous owners John and James Staunton for €2.75m. The properties acquired are spread across the country in Mayo, Donegal, Cork and Tipperary. The purchase was part-funded by Capita Trust Company, who provided debt facilities of €1.8m. Capnua sourced investor funding of €16.75m for the management buyout in 2014, which was led by Patrick Rowland. The Sunday Times, 16th August
RESIDENTIAL
Mortgage Drawdowns:
The Banking and Payments Federation report that there were 6,250 mortgage drawdowns in Q2 2015, amounting to €1.08bn. In value terms this was a 32.3% increase on Q2 2014. However percentage wise, the 64% jump in Q1 2015 compared to Q1 2014 was much greater, reflecting the introduction of the Central Bank’s new mortgage lending criteria. Owner occupier mortgages accounted for 90% of the €1.08bn drawn down in Q2 2015. The Irish Times, 14th August
Sorrento Terrace:
An unnamed US buyer has paid c. €10.5m for No. 1 Sorrento Terrace in Dalkey, Dublin’s most expensive residential property. The property had been on the market since 2013 for €12m. Sherry Fitzgerald and Lisney acted as joint agents on the sale, which was brokered through Christies International. Terry Coleman, the previous owner, purchased the property in 1998 for c. €7.5m and spent over €13m on a comprehensive refurbishment of the property before putting it on the market in 2006 for c. €30m. The Irish Times, 13th August
OTHER
IPUT Portfolio:
The Irish commercial property fund IPUT has seen the value of its portfolio grow by c. 30% in a year. In IPUT’s latest report to their investors, the fund said their assets are now worth nearly €1.5bn. Growth of 6.1% was recorded in Q2 2015 from a combination of rental income and capital gains. Total rental income for the quarter was c. €21m. IPUT continued to add to its portfolio during the quarter, paying €80.5m for a 70.8% stake in Riverside One, Sir John Rogerson’s Quay. The fund plans to spend up to €500m this year, having spent €382m in 2014. The Sunday Business Post, 16th August
Trinity College:
Dublin City Council have granted planning permission to Trinity College for a €70m business school on the Pearse Street side of the campus. The six storey building will be almost 129,000 sq. ft. in size and will consist of two auditoriums and multiple lecture theatres. Trinity are hoping to commence construction shortly with the goal of having the building completed by September 2018. The development will be part funded by the European Investment Bank, who recently approved a €70m loan facility to Trinity. The Irish Times, 15th August
Dublin Port:
The European Investment Bank has approved a €100m loan facility to part fund the expansion of Dublin Port. The Alexandra Basin Redevelopment Project is a €230m project designed to increase the port’s ability to handle large ships. The project will deepen and lengthen 3km of the 7km of berths and also deepen the entrance channel. It is expected to take five years to complete the project. The Irish Independent, 16th August
Industrial Market:
The latest report from Savills on the Dublin industrial market focuses on the recovery of the market. According to Savills the take up for H1 2015 was c. 2.37 million sq. ft., more than double the H1 2014 figure. Sales continue to outpace lettings in the sector, with 61% of transactions coming from sales of units. In terms of transacted space, southwest Dublin is at the forefront, representing over two-thirds of transactions. Average prime industrial yields tightened to 8.1% in June 2015, with prime rents at c. €6 – €7 psf. Savills Industrial Market in Minutes, August 2015
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