18th July (Issue 105)

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.




McDonalds Jervis Street: State Street Global Advisers have paid c. €17m to acquire a three-storey McDonalds fast-food outlet at the junction of Jervis Street and Mary Street in Dublin city centre. This figure is below the guide price of €18.5m quoted by CBRE for the high-profile investment. McDonalds has a 35-year lease on the premises which runs from 1998, leaving c. 16 years remaining on the lease, for which there are no break options. McDonalds is paying a rent of c. €733k p.a. for 5,553 sq. ft. of retail space at basement and ground floor levels, and two floors of high quality offices overhead, which extend to 5,694 sq. ft. The Irish Times, 12th July

Sandymount Premises: Coldwell Banker Commercial has secured a sale price of over €3m for a business premises in Sandymount, Dublin 4. The premises, located at 23/24 Sandymount Green, extends to 5,177 sq. ft. and produces rental income of c. €234k p.a. The rental income is receivable from Spar, Indie Spice and a mobile phone mast owned by Vodafone. The Irish Times, 12th July

Cork Retail / Industrial Units: Four retail and industrial units near Cork city centre, located at the junction of the Kinsale Road and a five-arm junction with the N40 flyover have gone on the market with a guide price of €2.2m through Cohalan Downing Associates. The current rental income from the properties is c. €221k p.a., offering a net initial yield of c. 9.6%. HSS Hire Service Group PLC rent two of the units for a combined rent of €141k p.a., with Egan Electrical Equipment (Ireland) Ltd (€50k p.a.) and Leeside Interiors Ltd t/a Cork Tile & Wood Flooring (€30k p.a.) occupying the other two units. Three of the units are terraces, and one is detached, and they have a combined floor area of 15,600 sq. ft. (with additional mezzanine space), situated on a site of 1.19 acres. The Irish Examiner, 13th July



One Grand Parade: After an extensive bidding process, German fund Quadoro Doric Real Estate has purchased One Grand Parade from Credit Suisse for €26m, paying c. €3m over the property’s guide price. The building contains a floor area of c. 31,500 sq. ft. and 15 car parking spaces. Current rents range from €26 psf to €52.50 psf, therefore the new owners will have the potential to increase the rental income of the property through active management. The weighted average unexpired lease term is approximately three years. Based on the current rental income of just over €1m p.a. and the €26m sales price, the net yield of the property is c. 3.8%. The Irish Times, 12th July 

Fonthill Business Park: State Street Global Advisers has paid €11.05m for an office and warehouse block in Fonthill Business Park in Dublin 22. The building, which is adjacent to Liffey Valley Shopping Centre, is let to United Drug PLC on a 10-year lease from June 2015 at €500k p.a., however this can be stepped up to a maximum of €700k p.a. The building contains c. 60,000 sq. ft. of warehouse space, and c. 27,000 sq. ft. of office space. The Irish Times, 12th July

Central Park Leopardstown: Green REIT has begun development of another substantial office building at Central Park in Leopardstown, Dublin 18, having just completed the letting of the newly built Block H to AIB. Their next project, Building 1, is expected to have c. 100,000 sq. ft. of lettable space and contain 156 basement car spaces by the time it is completed, with the fund targeting a completion date of Q4 2018. The building will be available to let either in its entirety or on a floor by floor basis. Central Park has established itself as Dublin’s leading office park, with all 850,000 sq. ft. of the completed space fully let, producing contracted rental income of c. €23.7m p.a. In addition to Building 1, planning permission is also in place for the development of an additional 300.000 sq. ft. of space. The Irish Times, 11th July

Baggot Street Development: Planning permission has been granted for a c. €10m office development by Irish Life Assurance plc in Dublin 2. The new development will be located on 74 – 75 Baggot Street Lower, will extend to over 75,000 sq. ft. and will be six storeys in height. The Sunday Business Post, 16th July



Carton House Resort: Joint selling agents Savills and CBRE are inviting offers of €60m for Carton House Hotel, Spa & Golf Resort, near Maynooth, Co. Kildare. The asset, which is situated on a c. 668-acre site, includes a newly restored 18th century Palladian mansion (Carton House), a separate five-star hotel and extensive sports facilities. The sale has come about after the owners, the Mallaghan family and the Carton Development Partnership, reached a consensual agreement with NAMA to put the asset on the market. The hotel has 165 bedrooms, a strong food and beverage offering, extensive meetings rooms, conference and banqueting facilities and two 18-hole golf courses. Sports facilities include high specification soccer, rugby and GAA training pitches, which have been used by teams such as Real Madrid, AC Milan and the Irish rugby team. The Irish Times, 12th July

Irish Hotels Federation (IHF) Report: A new report from the IHF has found that seven out of ten hoteliers believe that trade has improved dramatically when compared with the same period in 2016, with the outlook for the rest of the year also looking positive. Despite a decrease in the number of visitors from Britain, the number of overseas visits in 2017 is expected to be above the 2016 figure of 8.8 million, due to an increase in the number of visitors from other markets such as Germany, France and the US. Confidence amongst hoteliers is also growing, with the vast majority of hotels and guesthouses reporting that they intend to invest in refurbishment and increased capital expenditure over the next year, while 61% of hoteliers have recruited new staff over the last year. While the report is predominantly positive, it does show that rising insurance costs are an increasing concern for hoteliers. The Irish Times, 17th July

Tara Towers: Dalata has sought planning permission to redevelop the Tara Towers Hotel in Dublin 4, which it acquired last year for c. €13.2m. The application proposes the demolition of the existing hotel, which is situated on a 1.46-acre site. Dalata propose to replace the existing structure with a mixed-use development, which will include a four-star Maldron hotel with 140 bedrooms, and 70 residential units. The Irish Times, 18th July



RTE Montrose Site: After being chosen as the preferred bidder last month, Cairn Homes has announced that it has completed the purchase of RTE’s Montrose Site in Dublin for c. €107.5m. The company is now expected to seek planning permission to build 500 apartments and 10 houses on the site, and is now focused on the design and pre-planning stage of the development. The Irish Times, 17th July 

Edward Square Galway: Cushman & Wakefield is inviting offers of €7.5m for all 38 apartments in the Edward Square apartment complex in Galway city centre. The complex is fully occupied and producing rental income of c. €554k p.a. The complex was developed in 2002 and consists of one one-bedroom apartment, three two-beds, 33 three-beds and one four-bed. The guide price reflects a break-up price of less than €200k per apartment. The Irish Times, 12th July

Gorse Hill: Gorse Hill in Killiney, south Dublin, which was formerly owned by solicitor Brian O’Donnell and his wife Mary Pat, has been sold to an undisclosed buyer for c. €9.5m. The sale price for the six-bedroom property, which is situated on a two-acre site, was c. €1m above the €8.5m guide price set by joint agents Sherry FitzGerald and Knight Frank. The instruction to sell the 10,220 sq. ft. property came from Deloitte, who was the receiver for Bank of Ireland. The buyer is reported to be a low-profile businessman who was represented by an investment vehicle. The Irish Times, 13th July

Castletown Cox: Offers in excess of €17.5m are being sought by Knight Frank for Castletown Cox, a restored Palladian mansion in Co. Kilkenny. The Georgian estate is situated on a 513-acre site and has a floor area of 36,630 sq. ft. There are 10 bedrooms in the main building, with all of them being en-suite. The Irish Times, 12th July

House Prices: The Irish Independent reports on the May 2017 residential property price figures released by the CSO, which show that the increase in property prices has picked up pace, with price inflation nationwide of c. 12% in the year to May 2017, compared with an increase of c. 10% in the year to April. Prices rose by 2% in April alone, the highest rate of increase since April 2015. With regards to Dublin, prices rose by 11.2% YoY. Prices outside of Dublin rose by nearly 13% in the year to May, with the biggest increase being recorded in the south-east region, where prices rose by nearly 19% YoY. The Irish Independent, 12th July

Beacon South Quarter: IRES REIT has completed the construction of a new 68-unit apartment complex in Beacon South Quarter, Dublin 18. The cost of the development, known as the Maple at Block B2B, was c. €19.6m. The Irish Times also reports that tenants have been found for all 68 of the apartments, with c. 60% of the leases expected to begin by the end of July and the remainder expected to begin by the end of August. The complex consists of four one-beds, 55 two-beds and nine-three beds, with the rental income projected at €1.64m p.a. The Irish Times, 17th July

Mortgage Rates / Mortgage Exemptions: The Irish Independent reports that Ulster Bank is set to offer a new four-year fixed mortgage rate of 2.6%. The rate is only expected to be on offer for three months, and will be available to new, existing and switcher customers with a loan-to-value of up to 80%. The Irish Independent also reports that Ulster Bank has stated that for the moment, it is not accepting applications for exemptions to the Central Bank’s mortgage lending rules. EBS and Haven have already ceased taking applications looking for exemptions to the mortgage lending rules. The Irish Independent, 15th July

Daft.ie Wealth Report: A new report by Daft.ie has identified Sandycove in south Dublin as the most expensive micro-market in Ireland, with an average property value of c. €787k, with the nearby Foxrock second with an average property value of c. €759k. The report also highlights that there has been over 800 transactions of properties worth €1m or more since the start of 2016, which results in an average of 12 transactions per week. The Daft.ie Wealth Report 2017 

Cork Street Student Accommodation: Hines is intending to seek planning permission for a new student accommodation block on Cork Street, which will contain more than 200 bedrooms. The fund has just opened its fourth student accommodation block in Dublin, and intends to spend a total of €600m on student apartment blocks in Ireland and Britain where it owns 14 sites, five of which are in Dublin. The Cork Street project will be the first that Hines will have begun from scratch, as it acquired the other blocks in Dublin either completed or under construction. The Irish Times, 12th July

Department of Housing Figures: The Department of Housing has published its commencement and completion figures for April and May combined. In the two months, 3,099 units were completed nationally, of which 961 were completed in the four local authority areas that comprise Dublin city and county. During the same period, 3,673 units were commenced nationally, with 1,435 being in Dublin. Over the year to May, there were commencement notices for 15,579 units (5,856 in Dublin), compared with 10,986 during the same period last year (5,263 in Dublin). There is some variation in the estimated annual need for new housing units, with figures ranging from 25,000 to 50,000 per annum being quoted by various sources. NAMA Wine Lake, 16th July



Q2 2017 Review: CBRE’s latest report on the Dublin industrial market shows that take-up in Q2 2017 was nearly 753,000 sq. ft., bringing total take-up in H1 2017 to nearly 1,300,000 sq. ft. There were 45 industrial transactions in Q2 2017, with 29 being lettings and 16 being sales transactions. At the end of Q2 2017, prime yields remained at c. 5.5% with prime rents at c. €9.25 psf. CBRE note that prime rents are now close to levels which would justify new developments, and therefore they expect to see an increase in the number of speculative developments in the second half of the year. CBRE Dublin Industrial & Logistics MarketView, Q2 2017

Swords Business Park: A private investor has paid €2.85m for Unit 2 in Swords Business Park, c. €100k over the guide price. The property contains c. 18,000 sq. ft. of warehouse space and c. 6,900 sq. ft. of office space, with the property let to DVS Roads Ltd on a 25-year lease from 1997. The current rent is €280k p.a. The Irish times, 12th July


If you have an article which you would like to have considered for inclusion in our next weekly report, please contact us at info@origincapital.ie

Origin Capital funds senior debt transactions in the CRE investment sector, typically in the €3m – €15m range. If you would like to discuss how Origin Capital can help with your funding requirements, please contact us on 01 662 9264.

Origin Capital is a wholly owned subsidiary of LeBruin, a leading provider of corporate finance and debt advisory solutions.