20th October (Issue 17)

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.



Project Arrow: NAMA is expected to select the preferred bidder for its Project Arrow loan portfolio next week after final bids were submitted last week. The final round bidders are believed to be Cerberus and Apollo, after a joint bid between Goldman Sachs and CarVal was withdrawn last month. The loan portfolio originally had a par value of c. €8.4bn, however this figure has now fallen to c. €6.3bn. The portfolio is expected to sell for c. €900m, equivalent to 14c on the Euro. Both Cerberus and Apollo are believed to have already spent c. €5m undertaking due diligence on the portfolio. NAMA Wine Lake, 18th October


Fenward House: CBRE are guiding €5m for a prime, fully let office property in Sandyford, Dublin 18. Fenward House comprises 19,750 sq. ft. of lettable space with an additional 34 car spaces. Slainte Technologies occupy the property on a ten year lease from June 2015. The existing rent of c. €389.5k p.a. is subject to automatic increases to c. €409k p.a. in June 2016 and c. €429k p.a. in June 2017. A €5m sales price will see the initial yield rise from 7.5% to 8.2% following the increases in rent. The Irish Times, 14th October

Blackrock Offices: Lone Star have retained Savills to sell three office properties in Blackrock Business Park in south Dublin for over €13.5m. The properties, known as Blocks 3, 4 and 5 have a total floor area of 50,000 sq. ft., are fully let and have a WAULT based on lease breaks of c. 4 years. The portfolio is generating rental income of c. €1.016m p.a., with Hair Restoration Ltd paying c. 35% of the existing rent. As two of the three office blocks are let on rents of €19.80 psf, there is strong potential to increase the rental income from upcoming rent reviews. The Irish Times, 14th October

Airbnb HQ: Savills are guiding in excess of €30m for Airbnb’s new HQ at 8 Hanover Quay, Dublin 2. The 38,471 sq. ft. property is still under construction but it is hoped that work will be completed by February 2016. Airbnb Ireland have agreed a 20 year lease on the property, with a tenant break option after year seven. The initial rent of €1.475m p.a. will rise to €1.7m p.a. in 2021 and is also guaranteed by Airbnb Inc. At a valuation of €30m, the net initial yield is 4.71% and the capital value equates to €780 psf. The Irish Times, 14th October


Carton House: NAMA have placed a price tag of c. €55m on Carton House in Kildare. The four star, 165-bed hotel boasts a c. 1,100 acre parkland estate and golf course and is a popular choice for sports teams, with the Irish rugby team using the hotel for training camps. The hotel was developed in 2000 by Paddy Kelly and the Mallaghan family. The most recent accounts for the hotel, from 2013, show losses of c. €1.83m for the year on turnover of c. €16m. The Sunday Business Post, 18th October

Tara Towers Hotel: Joint agents DTZ Sherry Fitzgerald and Savills are inviting offers in excess of €9m for the Tara Towers hotel and an adjoining c. 1.4 acre site on Merrion Road in Dublin 4. The three star, 111-bed hotel and site were previously purchased by Bernard McNamara and Jerry O’Reilly in 2003 for c. €14.2m. The hotel is in good condition with the majority of the rooms having been refurbished in recent years. Additional income is generated from mobile phone masts on the roof of the building and two car parks. The sale will appeal to both hotel investors and property developers as the site is ideally suited for the development of apartments. The Irish Times, 14th October

North Wall Hotel: Following his acquisition of a warehouse on Dublin’s North Wall Quay for c. €5m, property developer Paddy McKillen will reportedly seek planning permission to develop a new 150-bed hotel on the site. Oakmount, a company to which McKillen is linked, purchased the warehouse after a competitive bidding process where the initial asking price was €3.9m. It is anticipated that Oakmount now plan to spend c. €10m adding an additional four floors to the existing warehouse to facilitate the development of the hotel. The Irish Times, 14th October


Newhall: Newhall retail park in Naas, Co. Kildare is being sold through Savills, who are seeking offers in excess of €21.5m. The complex, which contains eight retail warehouses (145,366 sq. ft.) and 660 car spaces, was completed in 2005 by Grangemount Holdings. Tenants include Harvey Norman, B&Q and PC World / Currys. Newhall is currently generating rental income of c. €1.563m p.a., with Harvey Norman paying the highest rent at €508k. Included in the sale is a 2 acre site to the southwest of the park which could accommodate a further three retail units (24,000 sq. ft.), subject to planning permission. The Irish Times, 14th October


Finglas Social Housing: New Generation have withdrawn their planning application for 169 social housing units on Jamestown Road in Finglas, Dublin 11. The application was withdrawn after Fingal’s County Council unveiled a development plan for 2017 to 2023 which specifies an employment creation element. New Generation had already proposed the development of a nursing home and healthcare centre on the site but will need to revise the remainder of the application to ensure it meets the criteria for planning permission. The proposed development would have been the largest social housing development since the property crash. The Sunday Business Post, 18th October

53 Percy Place: Two unnamed investors have paid over €2m for a development site at 53 Percy Place in Dublin 4, well above CBRE’s asking price of €1.6m. CBRE believe that the c. 0.1 acre site has potential for a residential development or alternatively, a four storey office block. The value of the site post development is estimated at €7m. Underbidders for the site included developer Johnny Ronan, who has a stake in the nearby 8-34 Percy Place office block. The Sunday Business Post, 18th October

Kilcooley Estate: Northern Irish businessman Tom O’Gorman is hoping to make a gross return of over 120% in little over two years on his investment in Kilcooley Estate, Co. Tipperary. O’Gorman initially acquired the 35,000 sq. ft. mansion and c. 220 acres for c. €2.1m from NAMA. O’Gorman then purchased the freehold title on c. 950 acres of forestry for c. €1.5m which had been leased to Coillte. Now joint agents Savills and Christie’s International are guiding €8m for the mansion and c. 1,263 acres of land. The mansion has not been occupied for a decade therefore it should require c. €2m of refurbishment before it is suitable for living. The Irish Times, 15th October


BOI Branches: Murphy Mulhall are handling the sale of four Bank of Ireland branches which have a combined price tag of €8.75m. The properties are available for purchase individually or as one portfolio. Two of the branches are in Dublin and two are in Cork, with the prized asset being the Lower Rathmines Road branch in Dublin 6. The branch has a guide of €1.65m and rent of c. €104k p.a., a c. 6% yield. The properties are let under 25 year leases from 2007 and subject to upward only rent reviews, offering investors secure long term income from a strong covenant. The Irish Times, 14th October

Belgard Square Industrial: Two vacant industrial properties on an adjoining site in Belgard Square, west Dublin are being sold by selling agents William Harvey and Co for €6.75m and €5.5m respectively. The three storey, 98,846 sq. ft. Belgard House is available for €6.75m and was previously occupied by United Drug and Kerry Group. The €5.5m property is on a c. 4.2 acre site and was previously the industrial bakery of Cuisine de France. Harveys believe the €5.5m property is most suitable as a manufacturing premises or film / TV studio, subject to planning permission. The Irish Independent, 15th October

If you have an article which you would like to have considered for inclusion in our next weekly report, please contact us at info@origincapital.ie

Origin Capital funds senior debt transactions in the CRE investment sector, typically in the €3m – €15m range. If you would like to discuss how Origin Capital can help with your funding requirements, please contact us on 01 662 9264.

Origin Capital is a wholly owned subsidiary of LeBruin, a leading provider of corporate finance and debt advisory solutions.