19th January (Issue 29)
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.
OFFICE
Grand Canal Site: Paddy McKillen Jr has completed the purchase of a 0.5 acre site in Dublin city centre along the Grand Canal at Charlemont Place for c. €16m. The site has planning permission for a six storey office block with a gross floor area of c. 71,000 sq. ft. McKillen is expected to start development shortly in order to capitalise on a shortage of quality office space in Dublin city centre. It is understood there were 10 Irish and overseas bidders for the plot, which was sold within a month of being put on the market by the Durkan Group. The Sunday Times, 17th January
Santry Site: Offers in excess of €2m are being sought by CBRE for a 4.5 acre site located on the east side of Ballymun Road in Santry, Dublin. The site previously had planning permission for 25,000 sq. ft. of office space, 172 residential units and several retail units, however this has since expired. The site boasts an attractive location near Junction 4 of the M50, and the proposed Northwood Metro station will be located adjacent to the land when it is completed after 2021. CBRE are selling the site under the guidance of the receiver, WK Nowlan. The Irish Times, 13th January
Innovation House Sandyford: Developer Noel Smyth is planning to demolish a two-storey office block in Sandyford and replace it with a six-storey over basement office block with a gross floor area of 227,108 sq. ft. There will also be 168 car spaces available under the proposed development. Smyth has been particularly active in the past few months, with his Fitzwilliam investment vehicle closing the sale of Arnotts to Selfridges. Irish Independent, 12th January
JLL Rental Overview: New research from JLL shows that the take-up in Dublin office space was 2.87m sq. ft. in 2015, slightly below the 2.97m sq. ft. record set in 2007. A significant portion of the 2015 take-up occurred in Q4 2015, when 64 transactions were completed totalling nearly 1m sq. ft. of office space. The Q4 2015 take-up was also a 62% increase on the Q3 2015 take-up. Irish Independent, 13th January
RETAIL
Kells Site: A substantial 26 acre site with planning permission for a new town centre immediately adjoining Kells, Co. Meath is to be offered for sale by agents GVA Donal O Buachalla. The site was assembled during the property boom at a cost believed to be in excess of €15m. Planning permission for 10 years was granted in 2010 to develop 170,000 sq. ft. of retail and commercial space, 160 apartments and 39 townhouses on the site. The Irish Times, 13th January
HOTEL
Imperial Hotel Dundalk: DTZ Sherry Fitzgerald are inviting offers of €1.2m for the 50-bed Imperial Hotel in Dundalk, Co. Louth. The hotel is being sold under the direction of the receiver, Tom Kavanagh of Deloitte. In addition to being well located in the centre of Dundalk, the hotel also includes a bar and nightclub which are popular with local students. The Irish Times, 13th January
Stonebridge, Wexford: The Talbot Hotel Collection has expanded its portfolio by acquiring the Stonebridge building at Paul Quay in Wexford Town, which came to the market in August 2015 with a guide price of €6.75m. The six storey building is part of a 2.15 acre scheme that included luxury apartments, retail space, and a multi-storey car park with 314 spaces. The new owners will invest an additional €2.5m in completing the luxury units, which will then become an ‘aparthotel’. Guests will also have access to the pool and leisure centre and food / beverage services at the adjacent Talbot Hotel. The Sunday Business Post, 17th January
Tetrarch Capital: Tetrarch Capital, the owner of the Powerscourt, Marker and Citywest hotels, is undertaking a strategic review of its business in a move that could see the group float its hospitality interests on the Dublin stock market. It is expected that Credit Suisse will be appointed to advise on their strategic options, which include a flotation or the sale of shares in the group to institutional shareholders and private equity. Tetrarch currently has eight hotels in operation, with an additional four hotels at various stages of planning. Hotel assets under management are believed to be worth c. €350m. The Sunday Times, 17th January
Gresham Hotel: Dublin’s Gresham Hotel is set to go on the market in the near future with a guide price of €80m – €90m. Dalata has indicated it will bid for the 323-room hotel, and further interest is expected from hotel management companies including Tifco and Windward Management. The Sunday Times, 17th January
RESIDENTIAL
IRES Facility: The property fund IRES has obtained a new revolving and accordion credit facility from Barclays and Ulster Bank. The facility is for €250m however it can be increased to €350m if necessary. Barclays will be providing €162.5m with Ulster Bank providing the remaining €87.5m. IRES has already used the facility to finance their recent purchase of 442 apartments and 197,460 sq. ft. of commercial space in Tallaght Cross West for c. €83m. Real Estate Capital, 18th January
Rathcoole Site: The well documented shortage of new homes in the greater Dublin area is expected to trigger a bidding war for a ready-to-go site with planning permission for 60 houses in Rathcoole, Co. Dublin. REA Coonan is guiding €5.25 million for the site, which extends to 1.87 hectares (4.6 acres). The site is to be sold by tender on 17th February, and the planning permission provides for the demolition of an existing house on the site and its replacement with 36 townhouses, 22 semi-detached homes and two detached units. The Irish Times, 13th January
Malahide Development: QRE Advisers is guiding €6.5m for 26 apartments and penthouses along with one duplex house in Malahide, north Dublin. The properties are being sold on behalf of U+I (formerly Development Securities). U+I purchased the properties for €36m in July 2014, as part of an 85 property portfolio which also contained 9 acres of land. The current annual rental income from the 27 properties being sold is €330k, however five of the properties are vacant. QRE estimate the annual market rent for the fully occupied portfolio is c. €490k. The Irish Times, 13thJanuary
Residential Rent Inflation: The CSO’s December 2015 release includes an update on Private Residential rents, which are based on actual rents being charged and are sourced from a network of estate agents across the country. Private rents increased by 0.3% in December 2015, the smallest increase in the past 18 months. Annual rent inflation is currently at 9.7%, down from a high of 10.5% in August 2015. This reduction was expected, and comes in the wake of rent measures introduced by the Government in November 2015. Irish residential rents peaked in April 2008 before the bottom of the market was reached in December 2010, by which point rents had fallen by 26%. They have since rebounded by 37% which means rents are currently 1-2% above their April 2008 peaks. Residential sales prices however are still 34% down from the peak. NAMA Wine Lake, 18th January.
Dublin Docklands: A new report by Owen Reilly Property Consultants claims that Dublin Dockland’s has firmly established itself as the city centre’s prime residential market, with asking prices 54% higher than the overall city centre average in 2015. Click here to read the full report from Owen Reilly.
OTHER
Smithfield Development: Linders of Smithfield has sought planning permission from Dublin City Council for the extensive redevelopment of a historic site in Smithfield. The site was the former headquarters of Irish Distillers in Dublin. The company plans to develop a property ranging in height from four to seven storeys above a double basement, with a gross floor area of 20,500 sq. ft. A restaurant and bar are also planned at the new building. There will also be a total of six roof terraces, three on the fifth floor and three on the sixth. Irish Independent, 16th January
CBRE Outlook 2016: CBRE’s Outlook 2016 report shows that there was over €3.5bn worth of investment transactions in 2015, based on 176 investment transactions in excess of €1m. There were at least 63 hotel sales completed in 2015, with their cumulative sale prices being in excess of €710m. 39 pubs were sold in Dublin in 2015 for a combined value of €49m. A further 17 Dublin pubs totalling more than €25m were sale agreed at the end of 2015. Irish Independent, 13th January
NAMA: Minister for Finance Michael Noonan confirmed in the Dail last week that NAMA now has three practical objectives: (1) The redemption of its senior debt (2) Realising its commercial property led construction plans for Dublin Docklands (3) Achieving its goal to construct 20,000 new homes by 2020. It is NAMA’s expectation that it will redeem all of its senior bonds (€30.2bn) by 2018. To date it has redeemed €22bn with a 2016 year-end target of €24bn. The Minister went on to say that NAMA’s development role will “stretch out for five years after its deleveraging work has been completed satisfactorily”. NAMA Wine Lake, 18th January
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