20th July (Issue 306)
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
Point Square Sale Point Square has been put on the market. Developed originally by Harry Crosbie, the scheme known formerly as Point Village, is being offered for sale by Savills on behalf of joint statutory receivers Stephen Tennant and Paul McCann of Grant Thornton, at a guide price of €75 million. The Point Square scheme comprises some 103,000sq ft of office space, a 242,000sq ft shopping centre which incorporates a 95,000sq ft anchor store under third party ownership, over 61,000sq ft of space with planning permission for retail and/or leisure use, a six-screen cinema let to Odeon, 756 car parking spaces and 24,000sq ft of permitted café/restaurant space – home to various food and beverage operators including Starbucks, Eddie Rockets, Ruby’s, Salad Box and Freshii. In addition, Crossfit 353 have opened a gym in the scheme. While Savills say they consider Point Square to be one of the best asset management and value-add opportunities to come to the market in Dublin in recent years, the scheme is already generating rental income of €4.9 million. The majority of this – 80% – is being derived from the offices occupied by Oath (Yahoo!) and Voxpro. These offices are let at an average passing rent of €36 per sq ft, offering reversionary potential, and have a weighted average unexpired lease term of 2.7 years. The Irish Times, 14th July
RETAIL
Hammerson, Dublin Dundrum Town Centre co-owner Hammerson says it does not anticipate granting future rent concessions to retailers. The company went on to warn that “all avenues to collect rents due are being pursued.” Hammerson operates in seven different countries, with a number of flagship retail centres including the Bullring in Birmingham, UK. It co-owns Dundrum Town Centre with German insurer Allianz. The group also owns half of the Pavilions shopping centre in Swords, the Ilac Centre in Dublin city centre and 40% of the Kildare Village premium outlet mall. In a trading update Hammerson said it expects all rent collections to continue to improve as remaining Covid-related restrictions are lifted. The company has collected 89% of billable rents in respect of last year. The Dublin and London-listed group has collected 68% of rent for the first half of this year, according to the brief update. Initial third quarter rent collection at 47% is ahead of quarter one and quarter two at the same point in time, and year-to-date rent collection now stands at 62%. Irish Independent, 15th July
RESIDENTIAL / LAND
Stepaside, Dublin 18 An Bord Pleanála has given the green light to a 445-unit build-to-rent apartment scheme at Stepaside in south Dublin. The board granted planning to Ironborn Real Estate for the scheme comprising nine blocks rising from two to eight storeys in height despite more than 150 objections lodged against the fast-track Strategic Housing Development (SHD) scheme. Dún Laoghaire-Rathdown County Council recommended to the board that planning be refused across a number of headings for the scheme on a 3.39-hectare site at Aiken’s Village. The council recommended refusal after concluding that the scheme would seriously impact on existing and future residential amenities and depreciate the value of those properties. In planning documents lodged on behalf of the applicant, Ironborn is to provide 44 units to the council for lease, with an indicative cost of €79,900 per month. This works out an average lease cost per month of €1,815. In his report, An Bord Pleanála senior planning inspector Rónán O’Connor found that the site is suitable for a build-to-rent scheme as it is an accessible urban location that is zoned for residential development. The Irish Times, 19th July
Drumcondra, Dublin 3 US property group Hines Real Estate is to lodge fast-track plans to construct 1,614 apartments on the grounds of Clonliffe College, Drumcondra, on Dublin’s northside. The company’s Irish arm last year entered into pre-planning consultation with An Bord Pleanála on the scheme. The scheme then comprised of 1,635 apartments that included 1,308 build-to-rent units. However, in the Strategic Housing Development (SHD) plans to be formally lodged with the appeals board in the coming days, the development is now entirely made up of 1,614 build-to-rent apartments on the 22-acre site. Hines has already committed to allocating 20% of the apartments for both social and affordable housing. The GAA sold the land to Hines in 2019 after it had purchased the 31.8 acres of Clonliffe College for €95 million. The Irish Times, 14th July
Oysterhaven, Cork An entire block of holiday homes on the south coast of Ireland is for sale for €2m. Oysterhaven Holiday Cottages, a purpose-built eight-cottage holiday rental complex, adjacent to Oysterhaven Activity Centre, is available for sale as an entire lot, or in two blocks of four, or as individual cottages, priced from €260,000 apiece. The activity centre is not for sale. As previously reported in the Irish Examiner, the owners, Oliver and Kate Hart, built the cottages in the late 1980s as part of a plan to ensure continued business throughout the summer months at their adjacent watersports centre – so that families had the option of staying in the area, rather than day trips, to take part in the numerous watersports on offer. Each of the cottages has three double bedrooms, a shower room and separate WC. The main living area is open plan, kitchen/living/dining room, with views down over Oysterhaven Bay, which is 9kms from Kinsale. The cottages have two parking spaces apiece and a boat trailer/storage gear space. To the rear of each cottage is a small garden. The energy rating is D2. The Irish Examiner, 15th July
Killiney, South Dublin Planning permission has been granted for a 255 residential unit SHD in south Dublin, which will include the Victorian-era Kylemore House. An Bord Pleanala has approved the plan by Atlas GP Ltd to build six apartment blocks ranging in height from two to six storeys, as well as seven houses across the 2.5-acre site in Killiney. A total of 248 apartments will be built, including one studio apartment, 98 one-bedroom apartments, 137 two-bedroom apartments and 12 three-bedroom apartments. Of the seven houses, five will be two storey, three-bedroom terraces. There will also be a three-storey and a single-storey home, both with three bedrooms. Kylemore House, which operated as Kylemore Clinic care centre from 1947 to 2009, is listed as a protected structure in the draft Dún Laoghaire County Development Plan 2022. Its accompanying gate house will be renovated into one of the seven houses. Four houses on Watson Road will be demolished as part of the development. The site will also incorporate 2,557 sq m of public open space. This will include two outdoor play areas totalling 118 sq m as well as two outdoor exercise areas and a resident’s courtyard. Each of the houses will have a private garden and the apartments will be provided with either a terrace, balcony or garden. The Times, 19th July
Irish Housing Chartbook Irish house prices rose for the 5th consecutive month in May to 5.5% yoy according to official CSO data released last week. This is the fastest rate of growth since December 2018 and house prices now sit just 14% below their 2007 peak. Prices grew 0.9% mom both in and outside of Dublin, with annual house price growth reaching 4.9% and 6.2%, respectively. There has, however, been a recent increase in price momentum in the Dublin market, with annualised growth in the past three months rising to c.12%. Housing transactions continued their post-lockdown surge in May following the full resumption of construction. Off a low base in the midst of the first lockdown in May 2020, transactions grew by 73% yoy. This took the year-to-date gain to 10%. Relative to 2019, transactions were down 3% in April, but ahead by 4% in the year to date. Goodbodys, 19th July
Finglas, North Dublin An investment fund, which bought 128 apartments in north Dublin for €40 million three years ago, is to lease the entire complex to housing organisation Tuath for 25 years. Ires Reit bought the apartments at Hampton Wood near the Ikea furniture store in Ballymun from developer Dwyer Nolan in 2018. Ires began renting out the complex itself and in May 2018 marketed the unfurnished apartments at €1,500 for a one-bed apartment and €1,850, for two beds. Almost all the current tenants in the complex are in receipt of Housing Assistance Payments. Tenants received letters from Ires in recent days informing them a lease had been agreed with Tuath, who would be taking over the tenancies. Tuath said the 25-year lease for the complex would ensure “affordable rents” for tenants. The Times, 13th July
OFFICE
Eastpoint Business Park, Dublin 3 Investment funds looking for immediate rental income from a strong tenant covenant in a prime location will be interested in the sale of a modern office building at Eastpoint Business Park in Dublin. Block P2 comes to the market fully let to Virgin Media on a 25-year full repairing and insuring lease from December 2000. Guiding at a price of €15.25 million through agent Knight Frank, the investment’s rental income of €1,247,000 (€23.25 per sq ft and €1,400 per car space) offers the prospective purchaser the opportunity to secure a net initial yield of 7.35%. The subject property extends to 49,366sq ft (4,586sq m), and is finished to grade-A standard, with raised access floors, suspended ceilings and recessed lighting. The property has a generous car parking provision with 71 on-site parking spaces. The Irish Times, 14th July
Sandyford, Dublin 18 As the threat posed by Covid-19 continues to recede in parallel with the rollout of the HSE’s vaccine programme, BNP Paribas Bank and US medical devices giant ResMed Inc have executed their respective long-term leases on a combined 60,000sq ft of office accommodation at the newly-developed Termini building. The quoting rent for the two transactions was €35 per sq ft, and both deals are understood to have transacted at close to this level with a combined commitment for a term certain in excess of 10 years. Europe’s largest bank, BNP Paribas, have signed up to a long lease on the fourth floor extending to more than 40,000sq ft. ResMed Inc have signed up to a long lease of just over 20,000sq ft on part of the fifth floor. Completed by Aldgate Developments in December 2020, the A3 BER-rated Termini building comprises 224,000sq ft of LEED ‘Gold’ V4-accredited space. Designed by Reddy Architecture & Urbanism, the property has finishes that joint letting agents Cushman & Wakefield and Knight Frank say surpass those available in Dublin city centre. The Irish Times, 14th July
Knight Frank Report Knight Frank state that this year is set to be 12 months of remarkable recovery for Ireland and other economies, as pent-up demand across all sectors is activated. This will boost office market activity, particularly as companies determine their evolving office requirements. Take-up in Q2 reached 15,700 square metres, which while low compared with quarterly take-up achieved pre Covid-19, is a relatively strong performance given the extended lockdown. Almost 186,000 square metres of space is expected to complete in 2021, 92% of which is in city centre locations. A total 69% of that space is pre-let, which includes the largest three buildings. The vacancy rate has edged up further to 10.6%. Space coming to the grey market remained flat in Q2, compared with Q1, having increased considerably over the last year. Normal turnover of space in the market and new space that has not yet been pre-let are the main drivers of vacancy in the market. Rents are holding firm at €608.90 per sqm, (€57.50 per sq. ft), as occupier preference for new or best available space is providing a floor for rents. The Business Post, 18th July
Model Farm Road, Cork A sale is close to being finalised for a partly let office investment, Building A, at Cork Business & Technology Park. Joint agents Lisney and BidX1 had been guiding €1.9m and the price is understood to have been agreed at over €2m. A detached two-storey building, its total floor area extends to 16,070 sq. ft. S3 ASIC Semiconductors is the main tenant with 7,262 sq. ft at the ground floor on a 10-year lease from 2020 with a rent of €116,480 per annum, and a break option in year six. The agents say the first floor, also of 7,262 sq ft, has potential to increase the total income from the property to €232,480 pa once a tenant is secured. Occupiers in the park include Boston Scientific, HSE, Alcon, Abtran and Pilz. Irish Independent, 15th July
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