21st August (Issue 160)
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.
OFFICE
Merrion Square, Dublin: The O’Callaghan Hotel Group is seeking to develop a new office building beside its Davenport Hotel on Merrion Square. The group applied for planning permission to build a five-storey office development at the Merrion building, better known as Morrissey’s, beside the Davenport hotel. The plans include demolishing the existing building and replacing it with a new office in one of Dublin’s most sought after locations. The Irish-owned hotel group rebranded as the O’Callaghan Collection in April after spending more than €30m in the past 18 months to revamp and improve the Dublin hotels. It owns the Alex, Davenport, Mont Clare and The Stephen’s Green hotels in Dublin city centre, which have almost 400 bedrooms between them. The Times, Irish Edition, 18th August
Iput / State Street Asset Swap:Irish property fund Iput has received the green light from the State’s competition watchdog to acquire Deloitte House on Dublin’s Earlsfort Terrace in a multimillion euro asset swap with State Street Corporation. State Street will in return secure ownership of No 40 Molesworth Street from Iput as part of the deal. In approving the proposed deal, the Commission said Iput’s acquisition of Deloitte House would not substantially lessen competition in any market for goods or services in the State. State Street’s acquisition of No 40 Molesworth Street, will see it secure €1.8m (€60 psf) in annual rent from online retailer Jet.com and further rental income from Specsavers, who agreed a 15-year lease for 3,837 sq. ft. of retail space on the building’s ground floor last year. The Irish Independent, 21st August
European Office Market Report: A report on the European office market by Knight Frank shows that €148.6m is spent annually on letting space in Dublin, €65m more than Manchester, Birmingham and Edinburgh combined. In terms of the overall European office market, Dublin ranks as the ninth most valuable city for lettings annually, sitting just behind Moscow (€158.4m) and Warsaw (€150.9m), but ahead of Madrid (€138.8m), Milan (€116.8m) and Amsterdam (€99.0m). The analysis, which is included in Knight Frank’s latest quarterly Dublin Office Market Overview, reaffirms London’s status as Europe’s leading city, with some €1.1bn in office lettings recorded annually. The Irish Independent, 19th August
Eyre Square, Galway: Insurance companyFriends First has bought the mixed-use 76,500 sq. ft. Citypoint building in Eyre Square, Galway, for €22m (€288 psf). The building was completed in 2008 and is fully let producing an annual rental income of c. €1.5m (€20 psf), providing a net yield of 6.3%. The building comprises retail, office and residential tenants with TK Maxx operating from the ground floor. The Irish Times, 21st August
HOTEL
Hotel Market Update: Statistics from hotel market data company STR show the average cost of a hotel room outside Dublin rose by more than 8% in July compared with July 2017. The occupancy of hotel rooms outside Dublin was down 1.8% to 85.2% in July, while the average daily room rate was up 8.1% to €130.87. Revenue per available room (RevPAR), was up 6.2% to €111.45. Occupancy in the capital was also down, dropping 0.6% to 90.1%. The average daily room rate was up 5.3% to €158.45, while RevPAR was up 4.7% to €142.76. In the whole country, occupancy was down 1% to 88.1%, while the average daily room rate was up 6.7% to €147.54, and RevPAR was up 5.6% to €129.96. The volume of visitors from mainland Europe increased 5% to 3.25m last year while the number of North American tourists rose 16% to 1.7m. There has been a decline in UK visitors. The Irish Times, 20th August
Dublin Hotels Pipeline: Figures compiled by Construction Information Services (CIS) show that close to 3,000 hotel bedrooms are in the planning pipeline for Dublin city centre and its immediate environs with plans either submitted or approved for 35 hotels. A further 44 hotels comprising 3,903 bedrooms are at tender award or construction stage in Dublin city, bringing the total number of new hotels due for delivery to 79. The Irish Times, 16th August
RESIDENTIAL / LAND
Bray Head Hotel: The former Bray Head hotel is set to be transformed into a residential development by IDV Developments, a British property investment company. IDV has applied for permission to refurbish the landmark building as part of a proposal to build 46 apartments. The plans include a new six-storey block and incorporates a restaurant and café at ground floor level. The Times, Irish Edition, 19th August
Sandyford, Dublin: Ires Reit has sought planning permission for the development of a 14-storey apartment block at the Beacon South Quarter in Sandyford, south Dublin. Should the application be approved by Dún Laoghaire Rathdown County Council, it will see the addition of 84 apartments to the 225 units that Ireland’s biggest private landlord already owns at the scheme. An examination of Ires Reit’s latest interim results shows that 636 of the 2,908 apartments in its portfolio are distributed across the six residential developments it owns in the Sandyford Business District (SBD). The Irish Independent, 21st August
Howth Seafront Site: Property development company Marlet Property Group has spent c. €30m acquiring a prime site on the Howth seafront in Dublin. The site has two existing planning permissions, one for 229 apartments and c. 32,000 sq. ft. of commercial accommodation, and another, which is valid until March 2023, for 127 apartments, 51 houses and c. 29,000 sq. ft. of commercial space. Marlet has been very active in recent months having acquired a 3.4 acre site in Dublin 8 for c. €25m and a 16 acre site with potential for 1,500 residential units in Tallaght for c. €16m. The Sunday Business Post, 19th August
Residential Completions: According to the latest CSO figures, c. 7,900 new homes were built in the first half of 2018, a year-on-year increase of 30%. Despite the improvement, the figure is well below the estimated level of demand in the market, which is put at 30,000-35,000 annually. The latest figures show multi-unit schemes accounted for 63% of all the 4,419 new dwellings completed in the second quarter of 2018 with apartments accounting for 11% and single dwellings accounted at26%. The majority of new homes were in the Dublin and the mideast regions accounting for more than 60%. The CSO found 53,578 homes were completed between 2011 and the end of 2017, significantly below previous Government estimates of 84,500. The previous figures based on electricity connections were found to have overstated the number of new homes built in the State for several years. The Irish Times, 21st August
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