18th October (Issue 68)
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.
BUDGET 2017
Budget 2017 Review: At the unveiling of the 2017 Budget, the Minister for Finance Michael Noonan announced a number of incentives designed to boost the residential market. The most significant incentive was the introduction of a help-to-buy scheme for first-time buyers (FTBs). Under the terms of the measure, FTBs can reclaim up to 5% of the value of the property via an income tax rebate. The scheme applies to homes valued at a maximum of €600k and the maximum rebate is €20k. The scheme only applies to new builds (both off-plan and self-built homes). Other measures announced by Minister Noonan were (i) the extension of The Home Renovation Incentive Scheme until 2018 (ii) interest relief for landlords was increased from 75% to 80% and (iii) homeowners who rent out rooms in their family home can now earn €14k p.a. tax free, an increase of €2k. The Irish Times, 12th October
RETAIL
Dublin Retail Parks: Research by BNP Paribas Real Estate shows that Dublin’s retail parks, many of which were badly affected by the crash, are now operating at close to capacity due to the recovery in consumer spending. According to the research, less than 4% of the floor space in Dublin’s 14 retail parks is available to let, while eight of the parks are fully occupied. With no new retail parks being built, and the population of Dublin having risen by 5% since 2011, rents are expected to rise, making it more difficult for overseas stores to enter the market. The Irish Times, 12th October
OFFICE
Magellan Portfolio: BNP Paribas has set an asking price of over €49.5m for the Magellan Portfolio, which consists of four commercial properties in Dublin. The prized asset in the portfolio is 1 Upper Hatch Street in Dublin 2, an eight-storey, 29,622 sq. ft. office block where Deloitte is the primary tenant. The rent roll from this property is c. €1.4m p.a. The other properties are a logistics facility at Unit 21 in Fonthill Business Park (84,129 sq. ft.), a mixed-use retail and office investment known as Maple House in Stillorgan (11,960 sq. ft.) and a logistics building at Unit 2 in Swords Business Park (24,875 sq. ft.). The total rent roll of the portfolio is c. €2.4m p.a., offering a net initial yield of 4.7%. According to BNP, there is potential to increase the rental income to c. €2.9m p.a. through active management. The Irish Times, 12th October
Blackrock Business Park: Lisney is guiding €11.2m for a substantial office investment and development opportunity at Blackrock Business Park in Mahon, Cork. The sale includes 97,572 sq. ft. of office space which is situated on a 10.5-acre site, where there is planning permission for two further office properties. The single storey, 97,572 sq. ft. building (laid out in three divisions) is producing rental income of c. €858k p.a. Tenants include Abtran Business to Business (65,800 sq. ft.) and RCI Call Centre (Ireland) (20,500 sq. ft.). The remaining 11,200 sq. ft. of office space is vacant at present. According to Lisney, the net initial yield of 7% will rise to 8.7% when the building is fully let. The Irish Times, 12th October
Q3 2016 Take-Up: New figures from JLL show that take-up in the Dublin office market strengthened in Q3 2016, with lettings agreed on almost 730,000 sq. ft. of space across 44 deals. With over 600,000 sq. ft. reserved for Q4 already, JLL expect 2016 to be another strong year, with the potential to reach similar levels to 2015 of c. 3,000,000 sq. ft. Demand remains firmly focussed on the city centre (accounting for 72% of take-up) with Dublin 2 the most sought after location. 61% of demand was for lettings less than 10,000 sq. ft., but there were also three deals for over 50,000 sq. ft. including the pre-let of 13-18 City Quay to Grant Thornton. Technology, media and telecommunications continue to be the key drivers of demand, accounting for 32% of Q3 deals. The Irish Times, 12th October
Sandyford Redevelopment Site: Offers in excess of €6.5m are being sought by Knight Frank for a 1.66-acre ready-to-go redevelopment site in Sandyford, south Dublin. There is currently 26,802 sq. ft. of office and industrial space on site. This existing property is likely to be demolished however, as planning permission was recently secured for an office development which will have a gross floor area of 218,120 sq. ft. The Irish Times, 12th October
Harcourt Centre: The Spanish fashion giant Inditex will pay a rent of €58.50 psf to lease 3,608 sq. ft. of office space on the penthouse floor of Block 5 of the Harcourt Centre in Dublin city centre. Inditex, which handles brands such as Zara and Massimo Dutti, has signed a ten-year lease for the space. Knight Frank is also marketing the fourth floor of the property, seeking a rent of €60 psf for the 3,795 sq. ft. of floor space. The Irish Times, 12th October
Spruce House: The Office of Public Works has submitted a new application to Dublin City Council for the refurbishment and extension of Spruce House on Leeson Lane, beside St. Stephen’s Green. Spruce House is a derelict, part demolished building which has a listed status. The plans cover the refurbishment of the existing building and the construction of a new 75,000 sq. ft. seven storey over-basement building to the rear, providing 85,000 sq. ft. of office space in a prime Dublin 2 location. NAMA Wine Lake, 16th October
HOTEL
Tifco Travelodge: The Irish Times reports that Tifco, the Irish hotel group backed by Goldman Sachs, looks set to take over the company behind the Travelodge franchise in Ireland, adding 12 hotels to its portfolio. The sale price is unknown, but is believed to reflect the fact that a number of the properties are leased rather than owned outright. The deal, which will have to be approved by the Competition and Consumer Protection Commission, will consolidate Tifco’s position as Ireland’s second largest hotel operator after Dalata. Tifco currently owns seven hotels (including three Crown Plazas) and manages a further seven. The Irish Times, 14th October
Ballykisteen Hotel: The 4-star Ballykisteen Hotel and Gold Resort in Co. Tipperary has been acquired by Great National Hotels and Resorts, and will be managed by sister company GN Asset management. The 40-bed hotel is understood to have changed hands for well in excess of the €2m asking price, and the new owners plan a substantial investment program to upgrade the property. The hotel is understood to be a particularly popular venue for weddings and leisure breaks, and includes an 18-hole golf course which is situated on 114-acres of rich farming hinterland. The Irish Times, 12th October
RESIDENTIAL / LAND
Limerick Investments: Cushman & Wakefield is guiding €14m for two prime Limerick investments. The first opportunity is the residential element of the Carlton development on Henry Street, which is guiding €9.5m. The property contains 67 apartments which are fully let and producing rental income of c. €587k p.a. The second property for sale is 1 Bishopsgate, which is also on Henry Street. The five-storey over-basement block contains 18,424 sq. ft. of Grade A office space and 10 parking spaces. The block is fully let to Holmes O’Malley Sexton Solicitors for c. €275k p.a. on a 31-year lease which has c. 18 years remaining. The Irish Times, 12th October
Dublin 18 Site: Lambert Smith Hampton (LSH) is seeking offers of c. €4.75m for a site of 2.8-acres on Brennanstown Road, Dublin 18. A feasibility study has shown that the site could accommodate up to 16 four- and five-bedroom houses, equating to c. €297k per site. The development land is located directly opposite the proposed entrance to Barrington Towers lands owned by Cairn Homes. The Irish Times, 12th October
Tallaght Development Site: Savills is guiding €4.5m for a 2.2-acre site located beside The Square shopping centre in Tallaght, Co. Dublin. The site has planning permission for a five storey, c. €40m leisure and retail complex, for which the planning permission was recently extended until 2020. The site, which was acquired for c. €20m by developer Bernard McNamara prior to the economic downturn, was later sold to Oaktree Capital as part of a portfolio of non-performing loans. The Irish Times, 12th October
Hanbury Mews: Lisney is quoting €4m for 25 one- and two-bedroom apartments in Hanbury Mews in Dublin 8. The apartments were developed in 2008 and are being sold on the instructions of statutory receiver David Carson of Deloitte. Based on the asking price, the purchase price of the apartments will work out at €160k each. The initial yield is 6.3% (based on the current rent roll of c. €252k p.a.), however when two of the apartments currently used to facilitate viewings are let, this will rise to a gross yield of 8.63% (based on a rent roll of €345k). The Irish Times, 12th October
Rental Figures: New figures from Savills reveal that c. 850k people in Ireland live in rented accommodation, of which c. 329k are living in Dublin. The figures show that c. 312k households rent their home in Ireland, with c. 122k homes renting in Dublin. The demand for rental accommodation has also led to a substantial increase in rents. According to the CSO, rents rose in Ireland by 1.9% in September 2016, the single largest monthly increase since November 2007. The annual rate of rental growth in the state was 9.6% for the period ending September 2016. The Irish Independent, 18th October
INDUSTRIAL / LOGISTICS
Huntstown Business Park: Agents CBRE and JLL are guiding €10.1m for a high quality logistics facility in Huntstown Business Park, Ballycoolin, Dublin 15. The facility contains logistics and office buildings which are rented to Coca Cola HBC under two separate 25-year leases from 2010, with no break options and upwards only rent reviews every five years. The combined rent of the buildings is c. €633k p.a., offering an initial yield of 6%. The office is used as Coca Cola’s Irish HQ, while the company plan to sublet the warehouse as it no longer complies with their business model. The detached office block has a floor area of 33,677 sq. ft. and 114 car parking spaces, while the logistics unit has a 10m eaves height, 10 loading bays and two-storey offices extending to 78,550 sq. ft. The Irish Times, 12th October
OTHER
Central Bank Buildings: The Sunday Times reports that Martin Keane, owner of the Oliver St. John Gogarty pub and Blooms Hotel in Temple Bar, is planning to bid for two city centre buildings being sold by the Central Bank. The properties which Mr. Keane is reportedly interested in are 6-8 College Green (asking price €14m) and 9 College Green (which should sell for over €2m). The buildings adjoin his 100-bed Blooms Hotel, and he is planning to redevelop the entire block if he is successful. The publican is not expected to bid for the main Central Bank building and two connected blocks. The Sunday Times, 16th October
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