20th December (Issue 378)
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.
HOSPITALITY
Liberties, Dublin 8 German investor Deka Immobilien Investment has returned to the acquisition trail in Dublin with a deal for a new hotel in the city’s Liberties area. According to market sources Deka has agreed to pay c. €36m on a forward-commitment basis to secure ownership of the property. Upon completion in 2023, the new hotel will comprise 151 bedrooms along with three retail units. The hotel, which has been pre-let on a long-term lease to Premier Inn, forms part of the wider Newmarket Yards mixed-use scheme. The development will also include 413 apartments along with associated amenities. Newmarket Yards is being delivered by Carey Issuer, a company owned by Bain Capital. The Irish Times, 14th December
Clontarf Castle, Dublin 3 Turnover at Clontarf Castle, the four-star hotel, remained at only one-third of pre-pandemic levels last year, even as the business began rebuilding after a Covid-struck 2020. Accounts filed by Clontarf Castle Limited show that revenues grew slightly in 2021, rising to €4.96m from €4.1m the year before. At the end of 2021, the company had made an after-tax profit of €541k, the accounts showed, up from €334.4k in the previous year. In 2019, turnover at the business came to €12.5m, while its profits after tax totalled €3.1m. Clontarf Castle is owned by Tifco, the country’s second largest hotel operator, which has c. 3k bedrooms around the country. The Business Post, 16th December
Smithfield, Dublin 7 Lender GWM Group has refinanced a new hotel in Dublin with a €58.5m loan. The facility, from GWM’s Commercial Real Estate Debt Opportunities fund (Credo), replaces a construction loan sponsor JMK Group used to deliver a 249-room Hampton by Hilton-branded hotel in the city centre. React News, 19th December
OFFICE
Sandyford, South Dublin Singapore-headquartered real estate investment trust Mapletree has achieved 96% occupancy at its Nova Atria office scheme at Sandyford in south Dublin. Avant Money has signed a 10-year lease for 10,527 sq. ft on the penthouse floor of the development’s north block. The remaining 11,000 sq. ft of office accommodation on this level is in the process of being refurnished and will be available for occupation in spring 2023. Acquired by Mapletree for €167m in 2019, the Sandyford scheme comprises a total of 339,000 sq. ft of space distributed across two six-storey blocks, Nova Atria North and South. The rent agreed for the office scheme is understood to have been between €55 and €60 per sq. ft. The Irish Times, 14th December
Dublin Mason Hayes & Curran (MHC) is weighing up options for a new 140k sq. ft office in Dublin. MHC has mandated Savills to review potential sites in the centre of the Irish capital that can accommodate between 120k sq. ft and 140k sq. ft. React News, 14th December
RESIDENTIAL / DEVELOPMENT
Fairview, Dublin 3 Dublin City Council has approved plans for a 118-unit apartment scheme for Fairview on Dublin’s north-side despite some local opposition. The council has given the green light to Banner A Cuig Ltd for the three-block scheme, with two blocks rising to five storeys, under the new Large-scale Residential Development (LRD) planning process at a site at Fairview Strand and Esmond Avenue. The scheme comprises 57 one-bedroom units; 55 two-bedroom units and two three-bedroom units. The plan also includes an additional four units through the reinstatement of two homes at 61 and 63 Fairview Strand. Third parties can now appeal the decision to An Bord Pleanála. The Irish Times, 16th December
Chartered Institute of Building (CIOB) Report The government should defer stamp duty for investors looking to retrofit and flip properties in order to address “alarming” low levels of refurbishment, a new CIOB report has said. The paper outlined that property investors are “quite receptive” to changes to stamp duty and deferring the payment could encourage institutional funds to fix up older, less energy-efficient stock. Ireland’s built environment, which includes buildings, utilities infrastructure and transportation systems, contributes c. 40% of Irish carbon emissions. Within that sector, residential housing accounts for 43% of emissions, meaning homes account for 16% of national emissions. The government has previously used stamp duty changes to limit investor activity in the housing market. Since May 2021, investors who buy more than ten homes in a year are subject to a 10% stamp duty rate, instead of 1%. The Business Post, 17th December
Macquarie, the Australian bank, has established a €100m fund to buy homes in Ireland, new financial documents have shown. Broadstone Housing Investments Limited, an Irish entity controlled by the bank, has already started to use the funds to acquire second-hand homes in Carlow. The properties were sold to the Macquarie entity by Peppard Investments. The document added that the €100m would be put towards property acquisitions. It said more than €3.4m had been drawn down from the fund so far. The Business Post, 17th December
Irish Mortgage Arrears Central Bank of Ireland figures show the number of principal dwelling house (PDH) accounts behind in their payments fell by 342 in the third quarter of 2022, following a decline of 2,071 accounts in the previous quarter. At the end of September, c. 4.3% of all PDH mortgage accounts were in arrears of at least 90 days, representing 30,809 mortgage accounts. The total number of accounts in arrears was 45,746. The figures, however, show the number of cases of arrears of less than 90 days rose by 494 to 14,937. The outstanding balance on PDH mortgage accounts in arrears of more than 90 days equated to €6bn, equivalent to 6% of the total outstanding balance on all such mortgage accounts. Accounts in long-term mortgage arrears, behind for more than a year, accounted for 52% of all accounts in arrears but they also declined by 998 over the quarter. 16% of Irish home loans were in the hands of nonbank entities as of the end of the reporting period. The figures showed that 74% of PDH mortgages in arrears for over a year were held by nonbank entities. The Irish Times, 16th December
Rialto, Dublin 8 Fire safety defects have been detected throughout the Herberton apartment complex in Dublin’s Rialto, with remedial works required for up to 500 homes at an expected cost of several million euro. The large-scale estate of apartments and houses, built on the site of the Dublin City Council flat complex Fatima Mansions, is one of the largest city council regeneration projects to date, and among the few to have continued construction throughout the collapse of the property sector in the last recession. It has emerged in recent days that a block of apartments, sold by US real estate firm Kennedy Wilson to the council, requires “extensive” fire safety works, according to the council. Housing association Cluid has now confirmed fire defects have also been detected in blocks it owns and manages in Herberton, while managing agents for the complex say fire safety works have been required throughout the estate. The Irish Times, 16th December
Montrose, Dublin 4 Dublin City Council has granted planning permission to Cairn Homes for a major mixed-use development on former RTÉ lands at Montrose in Dublin 4, conditional on the developer paying c. €10m to the local authority. The decision, which comes more than five years after the company bought the eight-acre site from RTÉ for €107.5m, followed a lengthy process in which Cairn Homes was required to lodge a revised application in October. Cairn submitted the revised application for an even larger scheme, looking to build 688 apartments comprising 416 build-to-rent apartments and 272 build-to-sell units, a 192-bedroom hotel, 17 “age-friendly living” units and a creche facility, among other amenities across 10 blocks. Cairn is required to pay a €9.9m development contribution to the authority “in respect of the public infrastructure and facilities benefiting” the development in the area. The decision is likely to be appealed. The Irish Times, 15th December
Sir John Rogerson’s Quay, Dublin 2 The purchaser of 72 residential units in Dublin city centre is seeking €1.1m in compensation from a developer over an alleged delay in meeting certain requirements to have the properties ready by the closing of the sale, the Commercial Court has heard. Patrizia Grand Canal SARL bought the units, along with two commercial units, at Sir John Rogerson’s Quay from TIO South Docks Fund II Ltd under a €51.4m contract for sale in 2019. Patrizia says the defendant was obliged to have certain “completion deliverables” in place by last February but failed to do so and the properties were not ready until July 14th. The completion deliverables included certificates of building compliance, HomeBond certs, and the safety file for the works. The Irish Times, 19th December
OTHER
The Citywest Transit Hub for refugees will be closed for new entrants over Christmas and Ukrainians thinking of travelling to Ireland have been asked to consider waiting until the new year. Ireland’s refugee reception system has been under huge pressure with more than 50k people from Ukraine and 18k asylum seekers from other countries being accommodated by the State. Many Ukrainians have made other accommodation arrangements and the number of people who have fled to Ireland from the Russian invasion of their homeland is expected to reach more than 70k by the end of the year. The Citywest Transit Hub in Dublin is used to process new arrivals before they are offered accommodation elsewhere in the country. The Irish Times, 16th December
Emergency Housing for Children The State child and family agency has been spending more than €500k a week housing children in hotel rooms, rented properties or other emergency placements, figures show. Emergency placements are used where a child is taken into State care and there is no available space in a residential or foster home, or where a previous care placement breaks down due to behavioural issues. Figures show in a number of cases Tusla is spending more than €1m a year on emergency arrangements to house some young people in care. There were 48 young people living in emergency placements in mid-November. That included 24 young people placed in rented accommodation, five in hotels, and 19 in other arrangements, such as an Airbnb letting or a Tusla property. The annual cost of the emergency placements was c. €800k per child, twice as high as the cost to house a child in a privately-run residential group home. Tusla’s internal analysis estimated the agency will spend c. €30m on emergency placements this year. The Irish Times, 19th December
Data Centres, Ireland A total of 21 new data centres are planned outside the Greater Dublin Area following the moratorium on new developments near the capital due to constraints on the energy grid. Major energy and technology companies have approached Eirgrid, the national grid operator, with plans to build 16 new, large-scale data centres, while a further five smaller-scale data centre projects are being discussed with ESB Networks, which handles connections for less significant developments. As part of the moratorium, Eirgrid and the CRU also mandated that any future developments must be built with on-site power generation to minimise their impact on the national grid. The Business Post, 17th December
Saggart, Co Dublin The owner of the Citywest hotel complex in west Dublin plans to build a large cemetery on the nearby site of former golf club lands. The 8,047-plot burial ground would be worth at least €20m, based upon the price of plots in other cemeteries in the area. Cape Wrath Hotel controlled by Tetrarch Capital, the owner of the Citywest complex, has submitted a planning application to South Dublin County Council (SDCC) for the proposed scheme. The proposed scheme also includes an office and reception building and 110 car-parking spaces. It is the second cemetery proposal from Tetrarch in recent months, following its submission of a plan for a smaller 5,806-plot facility adjacent to the Deep Park Hotel in Howth, where the company also wants to build a new hotel. The Irish Times, 15th December
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