1st December (Issue 23)
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.
LOAN / PORTFOLIO SALES
NAMA Loan Sales: Sources close to NAMA have revealed that the agency is preparing to sell a further two loan portfolios, with each one set to have a par value of c. €3bn. The news comes one month after NAMA chose Cerberus as its preferred bidder for the €6.3bn Project Arrow, its largest loan sale to date. NAMA has already repaid 73% of its initial €30.2bn of senior bonds from loan sales, rental and interest income. The Irish Independent, 26th November
OFFICE
Bishops Square: Hines has sought planning permission from Dublin City Council for a 35,000 sq. ft. extension to the six storey Bishops Square office building near Kevin Street in Dublin 2. Under the application, Hines is looking to extend two floors and add a seventh, which would result in 35,000 sq. ft. of new office space. Hines purchased the building for €93m from King Street Capital in January 2015, who had only purchased the building themselves in 2013 for €65m. NAMA Wine Lake, 29th November
One Ballsbridge: Joint agents DTZ Sherry Fitzgerald and JLL are guiding in excess of €55 psf for the office space in the first phase of One Ballsbridge, a new mixed-use development being undertaken by The Comer Group on the site of the old Veterinary College in Dublin 4. The Comer Group purchased the 2.02 acre site for €22.5m in 2014, a c. 87% discount on the €171.5m paid by Ray Grehan in 2005. One Ballsbridge will have a total net office area of 135,000 sq. ft., while also accommodating 88 apartments, ground floor retail units, a 20,000 sq. ft. leisure centre and 225 car spaces. The Irish Times, 25th November
South Docklands: Blackstone is set to make a profit of €43m on two Dublin properties it purchased from NAMA in late 2013 for €80m. The German fund Real I.S. has agreed to pay €123m for the Bloodstone Building and Riverside IV on Britain Quay in Dublin’s south docklands, which represents a gross return of c. 54% on Blackstone’s investment. The Bloodstone Building is 84% occupied and has a floor area of 83,100 sq. ft., with annual rental income of c. €2.1m. Riverside IV has a floor area of 59,091 sq. ft., annual rental income of c. €2.4m. The properties were completed in 2008 and were largely vacant when Blackstone acquired them. The Irish Times, 25th November
Georgian Properties: The Irish Times analyses the current condition of the Georgian office market. The bottom of the market was in 2011, when values dropped to between €250 and €350 psf, a fraction of 2007’s peak of €1,500 psf. Prime Georgians now command a price between €455 and €492 psf, according to Brian Gaffney of Murphy Mulhall. The rental market for Georgians has also improved, with Conor Whelan of QRE identifying a range of €30 – €40 psf for high quality Georgians. With the vacancy rate for grade A office space in Dublin 2 at just 1.25%, the recovery looks set to continue. The Irish Times, 25th November
HOTEL
Blackpitts Hotel: Denis O’Brien has been revealed as one of the key individuals behind the proposed development of a new 202-bed, eight storey hotel in Blackpitts, Dublin 8. The total cost of the development is estimated at €40m, with construction group BAM Ireland overseeing the project. BAM have recently resubmitted plans for the hotel, which proposes that the reception will be on the eight floor and the bedrooms situated underneath. Should the development proceed it would represent O’Brien’s second hotel in Ireland, as he already owns the Ballynahinch Castle Hotel in Galway. The Sunday Times, 29th November
Stauntons on the Green: An unnamed American investor is set to purchase Stauntons on the Green in Dublin 2. The four star, 51-bed hotel had been on the market via JLL who were guiding in excess of €12m for the property. The townhouse hotel has been trading under its owner, Jim Staunton, since 1989, however it is now being sold with vacant possession. Average room rates for the hotel are €90 per night, compared to €250 per night charged by the Shelbourne hotel, which lies opposite Stauntons. The Irish Times, 25th November
RETAIL
Supermac’s: The founder of Supermac’s, Pat McDonagh, has completed a deal to transfer ownership of 18 Supermac’s restaurants from his personal name to Supermac’s Holdings. The transaction will net McDonagh under €26m once all the debt related to the restaurants has been repaid. McDonagh still owns a further twelve restaurants, which may be sold to Supermac’s at the end of 2015. There are over 100 Supermac’s outlets in total, and the company made a net profit of c. €5.7m in 2014. The Irish Times, 28th November
Whitewater Shopping Centre: German property fund Deka Immobilien is understood to have been chosen as the preferred bidder for the 320,640 sq. ft. Whitewater Shopping Centre in Newbridge, Co. Kildare. Joint agents Savills and Coady Supple had set an asking price of over €150m on the shopping centre, with Deka believed to have bid in excess of €170m. The existing ownership of Whitewater is split between Sean Mulryan and the estate of Liam Maye, who each own 50%. The current net income of Whitewater is c. €11.7m, with Debenhams paying the highest annual rent at €1.575m. Approximately 87% of the income comes from the shopping centre tenants, with the balance coming from the 1,700 car spaces and 84 apartments included with the property. The Irish Times, 26th November
Monaghan Shopping Centre: Melcorpo Commercial Properties has completed the purchase of Monaghan Shopping Centre for €11.85m, which was well in excess of DTZ’s €10.1m guide price. The 96,408 sq. ft. shopping centre, which is nearly twenty years old, is producing annual rental income of c. €1.05m, offering Melcorpo an initial net yield of c. 8.53%. Tesco are the anchor of the shopping centre, and own their own store. The key tenants are Boots and McDonalds, who pay a combined annual rent of €266k. Melcorpo also own Drogheda Town Centre, Kilkenny High Street Mall and Castle Street Shopping Centre in Bray, Co Wicklow. The Irish Times, 25th November
RESIDENTIAL
Cairn Homes: Cairn Homes has obtained a €150m senior debt facility from AIB which will be used to fund site acquisitions and the continued growth of the company. The facility has been provided on a four year term and will be secured by a corporate level debenture. It also represents the first senior debt facility obtained by Cairn Homes and comes just six months after the company’s IPO on the London Stock Exchange. The Irish Independent, 1st December
Hines Development: US developer Hines is set to submit the first planning application for their 400 acre site in Cherrywood, south county Dublin. Overall Hines seeks to develop a new town in the area which would see the development of 3,800 homes for c. 30,000 people. The first planning application from Hines will seek the development of 5.4km of roads to accommodate the development. Should this application be successful, Hines intends to submit a subsequent application in mid-2016 for the first 1,400 apartments and retail facilities. The Irish Independent, 30th November
Howth Road: MKN Property Group, which is owned by the McKeon family, is set to construct 16 family houses on Howth Road, Dublin 5. The proposed development will see the construction of 7 five bed houses (2,077 sq. ft. to 2,250 sq. ft.) and nine terraced houses (1,679 sq. ft.) on a c. 1.6 acre site. MKN purchased the site in two transactions; the first saw the purchase of the 0.6 acre, 726 Howth Road for €2m in December 2007, with the adjacent one acre, 728 Howth Road site purchased in 2014 for €1.4m. The Irish Times, 26th November
Property Yields: A new report from Daft.ie on the Irish residential rental market highlights the contrasting fortunes between yields inside and outside of the capital. The average gross yield for a three bed property in Dublin has risen to 5.7%, whereas yields for the rest of the country have fallen to 6.8%. Key factors behind the changes in yields are (i) the continued increase in rents in Dublin while prices have stabilised and (ii) increasing prices outside the capital. The introduction of the Central Bank’s mortgage lending criteria has also made it more difficult for first time buyers in Dublin. The Sunday Business Post, 29th November
Property Prices: The latest figures released by the CSO show that house prices in the Republic rose by 1.6% in October. This increase means that prices have now risen by 7.6% over the past twelve months. House prices in Dublin increased by 1% while houses outside the capital rose by 2.1%. Overall, residential property prices in Dublin remain 34.9% below their peak, with properties outside of Dublin still 36.3% below their peak. The Irish Times, 26th November
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