1st August (Issue 408)
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.
MIXED USE
25 South William Street, Dublin 2 QRE Real Estate Advisers is seeking offers in excess of €1.25m for a mixed-use, four-storey over basement Georgian property at 25 South William Street in Dublin 2. No. 25 extends to approx. 3,153 sq. ft and has a small yard at the rear. On the ground floor, which extends to approx. 1,108 sq. ft, is a vacant, partially fitted retail unit with ancillary storage at the rear. The basement comprises a vacant retail unit at the front with independent access from street level. At the rear of the basement are two large storage rooms, one of which is held under a short-term licence. The first floor is in retail use and is subject to a short-term lease. The second floor accommodates a well-proportioned one-bed apartment, subject to a tenancy. The third floor comprises a vacant one-bed apartment, which can be let at the full open market rent. The total current passing rent is €44.6k pa, although QRE suggests a full occupation reversionary rental yield of approx. 10%, which could exceed €135k pa. The Business Post, 28th July
Guinness Quarter, Dublin 8 Following a revised application, property group Ballymore has been granted planning permisson to develop a €266m scheme that forms part of Diageo’s St James’s Gate Guinness brewery lands in Dublin 8. The site contains a number of protected structures including 61-82 James’s Street, James’s Street gateway, and sits beside the Guinness building and the Guinness storehouse. The development includes two new hotels, five commercial office buildings, six residential buildings of 336 units, a market hall, food hall, community and public realm spaces. The Business Post, 29th July
RETAIL
Dundrum, Dublin 14 The two owners of Dundrum Town Centre – Ireland’s largest shopping centre – are in the market to refinance €600m of debt held against the asset. Pimco Prime Real Estate (formerly Allianz Real Estate) and joint venture partner Hammerson have mandated Eastdil Secured to source a new debt package for the prime Dublin retail hub. Hammerson and Pimco want to replace an existing club facility from a trio of lenders that expires later next year. Dundrum Town Centre, 1.2m sq. ft in size and with approx. 170 tenants, produced €48m in annual rent in 2022, according to Hammerson. React News, 31st July
OFFICE
Smithfield, Dublin 7 Ireland’s National Transport Authority (NTA) has leased 80,000 sq. ft for a new office headquarters in Dublin. In the region’s largest letting of the second quarter, NTA is relocating to Haymarket House, a development by Linders Property Group in Smithfield. NTA is bringing its staff, currently based across four locations, under one roof. It currently has an office at Iveagh Court on Harcourt Lane and also leases space from WeWork in the city. The state agency is expected to occupy the building from early 2024. React News, 1st August
Sir John Rogerson’s Quay, Dublin 2 Dublin City Council has told TikTok that its plans to close off a planned cafe to the public at its Dublin headquarters “is likely to create a precedent for similar type undesirable development”. Documents on TikTok Technology Ltd’s planning application reveal the Council told the social media giant in a pre-planning meeting that its application to close off the cafe to the public at TikTok’s Tropical Fruit Warehouse on Sir John Rogerson’s Quay due to security considerations “will not be encouraged”. TikTok Technology Ltd is seeking a change of use from the permitted cafe/restaurant to office floorspace. No objections have been lodged against the proposal and the Council is due to make a decision on the application. The Irish Independent, 28th July
INDUSTRIAL/LOGISTICS
Industrial Lettings, South Dublin M7 Real Estate has recently completed several light industrial lettings at Westlink Industrial Estate and Greenogue Business Park in south Dublin. Unit 4 Westlink Industrial Estate extends to 5,900 sq. ft and has been let to Lifesize Plans on a new long-term lease as part of its global franchise rollout. The unit had undergone extensive refurbishment works in recent months. At Greenogue Business Park, a total of five new leases were agreed in the scheme in the last 12-month period and, with the completion of the final letting in recent weeks, the scheme is now fully occupied. Next Level Aviation, a Florida based aircraft parts company, took Units A1, A2 and A3, extending to a total of 6,662 sq. ft. Units A5 (2,088 sq. ft) and A6 (2,104 sq. ft) have been let to Cosy Campers, a camper van conversion specialist, and Detailing HQ, which provides specialist ceramic coating for vehicles. The Business Post, 28th July
RESIDENTIAL / DEVELOPMENT
Ringsend, Dublin 4 The consortium developing the former Irish Glass Bottle site in Dublin said it had offered 86 affordable housing units to the Department of Housing in addition to 57 social units that will form part of the first phase of the project. However, just 25 of the 86 have so far been taken up. The offer was made to fulfil the developers’ commitments under the overall planning scheme for the site, which will include 570 homes. The consortium, which includes Ronan Group Real Estate, US private-equity firm Oaktree and Lioncor, a development company jointly owned by Oaktree and Dublin-based Alanis Capital, recently acquired Nama’s remaining 20% stake in the project. The largest vacant plot in the capital is expected to ultimately deliver up to 3,800 homes, 25% of which are earmarked for social and affordable housing. The partners secured planning approval from Dublin City Council in February for a further 324 homes and associated facilities. It is anticipated that works will commence on site for this phase later this year. The Irish Times, 27th July
Dundrum, Dublin 14 A south Dublin property developer is seeking to block 852 homes the Land Development Agency is planning to build on the former Central Mental Hospital site in Dundrum. Legal papers filed last week have called for a stay on the development of the project, known as Dundrum Central. The site of the Central Mental Hospital is currently being used to house asylum seekers in tented accommodation, with reports suggesting that up to 176 international protection applicants could ultimately be accommodated on the site. The Business Post, 30th July
Planning Permission Exemption Darragh O’Brien, Minister for Housing, has signed an order to allow vacant buildings to be used to house refugees for five years without planning permission. The buildings will have a planning permission exemption up until 2028, which is far longer than the original two-year exemption originally announced. The state is currently carrying out emergency refurbishment on approx. 59 vacant buildings to provide accommodation for 3,000 Ukrainian refugees for up to two years. The vacant buildings being refurbished include former hotels, hostels, convents, monasteries and army barracks. But a report for O’Brien’s department said the funding required to bring them back into use was “too great” for the properties to be used for just two years to house Ukrainian refugees. The Business Post, 31st July
Centre Park Road and Monahan Road, Cork A €350m large scale residential development planning application has been submitted to Cork City Council by Leeside Quays Ltd, a subsidiary of O’Callaghan Properties, for a 10-year planning permission for a large scheme at the Goulding’s site, Centre Park Road and Monahan Road in Cork. The proposed development consists of the demolition of the existing on-site buildings and structures and site clearance to facilitate the construction of 1,325 residential units including apartments and duplexes in 10 buildings. The Business Post, 29th July
Cherrywood, South Co Dublin Dun Laoghaire Rathdown has given a subsidiary of US private equity giant Lone Star, LSREF V Eden M1 Ltd, permission for a €52m development of 283 homes and a crèche at Laughanstown in Cherrywood, the government-designated Strategic Development Zone project in South Dublin. The planning provides for a four-storey block of 59 apartments, a four-storey block of 63 apartments, another four-storey block of 62 apartments, and a five-storey block of 55 apartments. The plans also include 28 duplexes, 16 houses, and a three-storey crèche block with 317 surface and basement car park spaces. The Business Post, 29th July
Brownsbarn, Dublin 24 Citywest Homes Development has commenced building the first 29 houses of a total of 112 dwellings on lands just south of Citywest Avenue at Brownsbarn in Dublin 24. The development comprises 90 three and four-bed houses and 22 one and two bed apartments in a four-storey apartment building. Access to the development will be via Garter Avenue. The site of 9.24 acres is bounded to the east by the N82 Citywest Road, to the north-west by Garter Avenue and to the south by lands that will be developed as a neighbourhood park. The Business Post, 29th July
2022 Census Data A huge jump in the number of older people living in rental accommodation and a significant increase in the rents tenants pay have been revealed in the latest Census 2022 data. The number of people aged 65 and over who are living in rented accommodation has increased by 83% since the last census, bringing the number to approx. 17,000 households. Meanwhile, Ireland’s average weekly rent has increased by 37% to €273 between 2016 and 2022. The amount of accommodation owned without a mortgage or loan increased by 11% to approx. 680,000, while the number owned with a mortgage or loan fell by 1%. The Irish Times, 28th July
Airbnb Listings There has been a 57% increase in Airbnb properties available to let in Dublin in the last year. Properties actively listed for short-term let in the capital grew from 2,617 in June 2022 to 4,099 in June 2023, according to figures compiled by AirDNA, a data analytics company. Nationally the number of properties on Airbnb grew 11% in the past year to 24,172. Legislation introduced in 2019 requires landlords in rent pressure zones to apply to their local authority for planning permission to change the use of the property to short-term lets. Planning authorities can take legal action if a property does not have the required permission, or when the terms of the permission have not been met. However, some leasing properties on Airbnb have largely ignored the measures and there has been little to no enforcement. The Sunday Times, 30th July
Housing Completions The number of housing units completed in the State increased by approx. 5.4% in the first six months of the year, the CSO has said. The second-quarter slowdown was particularly apparent in the apartment sector. A total of 7,353 new dwellings of all types were completed in the second quarter of the year. Added to the 6,716 units completed in the first quarter of 2023, it brings to 14,069 the total number of units finished in the year so far. However, the number of completions in the three months to the end of June was down 3.5% on the same period last year, driven by a steep decline in apartment completions. Approx. 1,897 apartments were brought to completion over the period, down 18.7% on the second quarter of 2022. Dwellings completed as part of a scheme development, meanwhile, increased by 2% to 4,017 representing more than half (54.6%) of the total. Single dwelling completions were also up by 7.2% in the quarter to 1,439. There is broad consensus that the number of housing units completed this year will fall short of last year’s total of 29,000 and well below the Government’s original Housing for All Target of 33,000. The Irish Times, 26th July
Banking and Payments Federation Ireland (BPFI) Report The number of mortgages drawn down in the second quarter of 2023 slumped approx. a fifth, the first time there has been a contraction since the onset of the Covid-19 crisis, new data shows. A report from BPFI shows a total of 9,896 new mortgages to the value of €2.8bn were drawn down by borrowers during the second quarter of 2023. That was a decrease of 17.4% in volume and 11.9% in value on the corresponding second quarter of 2022. A comparison with the previous quarter shows a decrease of 5.7% in volume and 3.6% in value. First-time buyers remained the single largest segment by volume (60.3%) and by value (61.5%). Re-mortgage and switching volumes and values fell by 63.8% and 63.1% YoY respectively. The Irish Times, 26th July
OTHER
Sandymount, Dublin 4 Lansdowne Football Club – the Dublin-based rugby union – has completed its reported €7m purchase of the YMCA Cricket Club grounds off Claremont Road in Sandymount, Dublin 4. This follows formal approval for the deal from the Charities Regulator and will allow Lansdowne to roll out additional rugby facilities for club members. The lands, which cover 6.6 acres, are accessed from Claremont Road and comprise a large surface car park with parking for approx. 40 cars. The Business Post, 31st July
Clonmelsh Quarry, Co Carlow Carlow-based concrete and quarrying giant Dan Morrissey Ireland Ltd (DMIL) is to have its main asset put up for sale. QRE Real Estate Advisers has been instructed by receivers Grant Thornton to find a buyer for Clonmelsh Quarry, a 332-acre facility located 6km from Carlow Town. The quarry, which is fully operational, is being offered to the market along with three adjacent parcels of land distributed across 109 acres, at a guide price of €7.4m. The quarry is currently licensed to Plazamount Ltd, trading as Dan Morrissey & Co under a rolling licence agreement from April 2018 at an annual licence fee of €270k. The most significant of the three other land parcels comprises a prime agricultural holding of 95 acres. The two smaller holdings, known as the Powerstown and Ballybar lands, extend to 12 acres and two acres respectively. The portfolio is being offered for sale in one or more lots. The Irish Times, 26th July
BNP Paribas Real Estate (BNPPRE) Report Commercial property investment almost halved between the first and second quarters of 2023, with market turnover between April and June at its weakest in six years, according to new research. Investment dropped 47% in the three months to June and was down 73% on the same period in 2022, as the Irish market suffered the third sharpest slowdown in Europe. €333.4m was invested in commercial property in Q2, according to new data compiled by BNPPRE. This is down from €625m in Q1, with interest among foreign investors plunging. The slowdown has been attributed to little distress in the market that would force property owners to sell-up and the slow adjustment of asking prices to the small size of the Dublin market. Market performance for the remainder of the year will hinge on monetary policy and price discovery, according to the report. BNPPRE is predicting activity to remain down for the remainder of the year, but is hopeful the market will rebound in 2024. The Business Post, 31st July
AIB Impairment Charge AIB has booked an impairment charge of €91m in the first half of the year due to falling commercial property values. Announcing half year results, the lender said it had taken a net credit impairment charge of €91m to “address the potential adverse impacts from higher interest rates and lower valuations” in the commercial property sector. Market analysts are projecting that commercial property values across retail, industrial, logistics, office and residential units will fall between 10 and 20% this year in response to the changing economic environment. The Business Post, 28th July
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