19th July (Issue 55)
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.
RETAIL
Shopping Centre Report: DTZ’s report on the shopping centre market reveals that there have been c. 40 shopping centre transactions in Ireland since 2013, equivalent to c. 20% of the market stock. Of these c. 40 transactions, 24 were sold via portfolio sales. There haven’t been any new shopping centre developments completed since 2012, and 2019 is the first projected year of new developments. Prime shopping centre rents in Dublin Zone A, based on Liffey Valley Shopping Centre, increased from c. €209 psf in Q4 2015 to c. €250 psf in Q2 2016. DTZ Irish Shopping Centre Market Report, July 2016
Henry Street: Fitzwilliam Finance Partners (Noel Smyth’s investment vehicle) in conjunction with Arnotts has submitted a planning application to Dublin City Council to separate numbers 7 – 9 Henry Street, Dublin 1 into a separate building of c. 40,000 sq. ft. The division of the buildings will reduce Arnotts department store to c. 250,000 sq. ft. of retail space but will enable the new standalone premises to be redeveloped to attract a major retailer. The Sunday Independent, 17th July
OFFICE
1 Grand Canal Square: IPUT plc has let 18,500 sq. ft. of penthouse office space in 1 Grand Canal Square, Dublin 2 at €60 psf to Citadel Securities. The c. 120,000 sq. ft. Grade A six storey building is also occupied by Bank of Ireland, HSBC and Accenture. The Irish Times, 18th July
Dunboyne Business Park: Lisney is seeking offers of €3.75m for Dunboyne Business Park (DBP) in Co. Meath. DBP contains a mix of office and warehouse space and has a total floor area of 81,174 sq. ft. The current rental income is c. €412k p.a., of which €100k p.a. is attributable to the chemical company Scott Bader. There is potential to also increase the rental income of DBP in the short term, as c. 20% of the business park lies vacant. The Irish Times, 13th July
Cumberland House: The US travel conglomerate Travelport has agreed to rent the fifth and sixth floors of Cumberland House near Fenian Street in Dublin 2. Travelport will pay a rent of c. €50 psf for c. 33,000 sq. ft. of space. Cumberland House was acquired in 2015 by Hibernia REIT for c. €49m. The property is currently undergoing a c. €27m refurbishment which will see the floor area extended to c. 135,000 sq. ft. Cumberland House is also set to become the Irish HQ of Twitter, who has agreed a 20-year lease at a rent of c. €50 psf. The Irish Times, 13th July
Harcourt Centre: Knight Frank is seeking tenants for two office units of the Harcourt Centre complex near Harcourt Street in Dublin 2. The first unit is the fourth and penthouse level floors of Block 5, which have a floor area of 7,389 sq. ft. The rent being sought for this unit is €60 psf, as it has recently been refurbished. The second unit to let is the lower and upper ground floors of Block 8, which extend to 3,821 sq. ft. The rent quoted for this unit is €49.50 psf. The Irish Times, 13th July
Leopardstown: Ardagh (the global packaging group) is reported to have agreed to rent Pelham House (26,585 sq. ft.) in South County Business Park, Leopardstown, Dublin 18 from Friends First. The rent is believed to be in the early €20s psf (subject to refurbishment of the offices) and also includes 44 on site car parking spaces. The Irish Times, 13th July
Galway: Savills has placed a guide price of €1.8m for an 18,212 sq. ft. office building at Galway Financial Services Centre. The premises is let to a Galway based accountancy firm at €150k p.a. on a 20 year lease from January 2016 with a break option in year 10. There is additional income of €12k p.a. from a mobile phone mast rolling licence agreement. The initial yield on the guide price equates to c. 8.6%. The Irish Times, 13th July
JLL Report: JLL’s report on the Dublin office market for Q2 2016 reveals that the total take-up in the quarter was 536,535 sq. ft. The vacancy rate in the market decreased from 8% to 6.7%, compared to the European average of 8.6%. In the city centre, the vacancy rate is just 3.3%. Prime rents in the city centre range from €55 – €65 psf while prime suburban rents range from €25 – €30 psf. The level of supply will increase in the short term, with 3.5m sq. ft. of new space under construction. A further 1m sq. ft. of space is undergoing refurbishment. 41% of the space under construction has been pre-let, while 52% of the space undergoing refurbishment has been let. JLL Dublin Office Market Report Q2 2016
HOTEL
Dublin City Centre: The British hotel and serviced apartment group, Marlin has sought planning permission to increase the size of its planned Dublin hotel on Bow Lane East (behind the St. Stephen’s Green Shopping Centre) from 190 to 311 bedrooms in a 7-storey over 2-basement development. The larger plan has been facilitated by Marlin recently acquiring three adjoining sites. The extra bedrooms would increase the size of the overall development by c. 33,000 sq ft (to c. 123,200 sq. ft.) on the original plans. The total investment is reported to be c. €60m. The Sunday Times, 17th July
Radisson Blu Hotel & Spa Athlone: iNua Hospitality Group has acquired the four star Radisson Blu Hotel and Spa in Athlone from the receiver Kieran Wallace of KPMG. The sales price is reported as €9.5m for the 128 bedroom hotel. The iNua group already owns Radisson Blu Hotels in Cork and Limerick in addition to the Muckross Park Hotel (Killarney) and the Hibernian Hotel (Kilkenny). The Irish Times, 13th July
RESIDENTIAL / LAND
House Building: Dublin listed builder, Abbey plc has reported that its sales in south Dublin and north Wicklow are strong but its building sites in Kildare and Laois are on hold due to no growth in demand in these areas. Abbey plc’s Preliminary Statements for FYE 30/04/2016 identify that it completed 597 sales in the year (UK 544, Ireland 23, CZK 30) and pre-tax profits for the year were €61.5m (25.5% YOY increase). Its strong sales in the British market were aided by the government’s help to buy scheme. The growth in pre-tax profits was attributed by Charles Gallagher, Chief Executive of Abbey plc to higher sales margins and an increase in house completions. The builder’s margins in Britain were 400 bps over analysts’ forecasts. The Sunday Business Post, 17th July
Census Figures: Preliminary figures from the 2016 census show that there are almost 260k vacant homes in the State at present, of which 61,204 are holiday homes. With c. 260k homes vacant, it means that the national vacancy rate is c. 12.8%. Leinster has the highest number of vacant homes (over 90k), followed by Munster (over 83k). The Irish Times, 15th July
Roslyn Park: The Department of Education (DoE) has entered into “exclusive talks” to acquire the Rehab Group’s 5.16-acre Roslyn Park site in Sandymount, Dublin 4. Joint agents Lisney and Savills had been inviting offers of over €12m for the site, which attracted significant interest from developers who were attracted to its potential for residential development. It is understood that the DoE may now pay over €21m to acquire the site, which will be used to facilitate an education centre. Cairn Homes had been bidding for the site and its Chief Executive and Founder Michael Stanley had hoped to obtain planning permission for a development consisting of 100 to 120 residential units. The Irish Times, 13th July
Housing Action Plan: The Irish Times reviews a draft copy of the Housing Action Plan (HAP) which is expected to be released shortly by the Minister for Housing and Planning, Simon Coveney. Central to the HAP is a proposal to deliver c. 45,000 social housing units by 2021, while also establishing a c. €70m state fund which will be used to acquire c. 400 distressed housing units from lenders. The HAP also proposes that institutional investors will be invited to establish large scale multi-family units which will facilitate the creation of a new build-to-rent sector of the market. The Irish Times, 14th July
Navan Development Site: Joint agents Lisney and Smith Harrington are guiding c. €4m for 44-acres of residential development land in Navan, Co. Meath. The land, which is owned by the Spicer family, adjoins Academy Street and forms part of the grounds of Belmont, a large period house owned by the family. The site is understood to be able to facilitate between 360 and 400 houses, equating to c. €10k – €11k per site. The Irish Times, 13th July
Ziggurat Acquisitions: The student accommodation firm Ziggurat has announced that they have acquired a number of development sites in north Dublin’s city centre. The sites include one on Upper Dominic Street which is expected to provide a c. 380-bed facility, the site of the former Michael H textile plant and two sites which were previously used as car parks for Arnotts. The co-founder of Ziggurat, Matthew McAdden, has advised that any developments on these sites are not expected to be completed until 2019 at the earliest. The Irish Times, 13th July
INDUSTRIAL
Industrial Market Report: CBRE’s report on Dublin Industrial & Logistics market identifies that prime headline rents are currently c. €7.90 psf and yields are stable at c. 5.75%. CBRE also projects c. €8.75 psf for prime Dublin industrial to be achieved in H2 2016. H1 2016 take up volumes in Dublin were c. 1,288,500 sq. ft. which is 35% down YOY. However, CBRE attributes the reduction in take up due to lack of supply of modern accommodation in core locations rather than weakening in demand levels. CBRE, Dublin Industrial & Logistics MarketView, Q2 2016
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