21st December (Issue 328)

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.

 

Please note that the next Origin Capital Weekly Irish Property Review will issue on Tuesday 11th January 2022. Happy Christmas from the team at Origin Capital and we look forward to working with you in 2022

 

MIXED

Point Square, Dublin Docklands A consortium of investors is believed to have agreed an €83m deal to buy the Point Square mall and office complex in the Dublin docklands. The deal comes after the American real estate giant Kennedy Wilson withdrew from the sales process in recent weeks. Kennedy Wilson had beaten off competition from several bidders, including RQTwo, after Nama-appointed receivers from Grant Thornton put Point Square on the market with a guide price of €75m in July. Developed in 2008, the scheme lies beside the 3Arena and comprises offices and a shopping centre, including a six-screen Odeon cinema. It has a rent roll of €4.9m and tenants include Eddie Rocket’s, CrossFit 353 and Starbucks. However, a number of its units are vacant. Dunnes Stores’ two-floor unit, which has been the subject of court cases over the retailer’s refusal to open a shop there, is not included in the sale. The Sunday Times, 19th December
 

HOSPITALITY

Naas, Co Kildare Winthrop Group is understood to be closing in on the acquisition of the four-star Kildare hotel Killashee from Tetrarch Capital for c. €25m. Winthrop Group is understood to have seen off bids from several other parties, including Cliste Hospitality which owns eight hotels around Ireland. Killashee owner Tetrarch Capital had previously been reported as considering a sale of the well-known 140-bedroom four-star property close to Naas, Co Kildare. It bought the hotel back in 2014 for a reported €13m from its then owner, Craigfort Taverns, which was under court protection from creditors at the time. Despite the impact of the Covid-19 pandemic on the tourism and hospitality sectors, there have been a number of high-profile hotel sales this year, including Dublin’s Morrison Hotel to London-based private equity firm Zetland Capital, for a sum reportedly in excess of €65m, back in May. More recently, Slieve Donard, a five-star hotel in Co Down, was acquired by US-based AJ Capital Partners, in a deal valued at c. €47m. The Irish Times, 15th December

Castlemartyr, Co Cork Castlemartyr Resort in Cork has completed the purchase of the Hunted Hog pub on Main Street in Castlemartyr village. The five-star hotel and golf resort was bought during the summer for close to its €20m guide price by Singapore-based Dr. Stanley Quek and Peng Loh, a restaurateur and hotelier born in Dublin to Singaporean parents. The business partners previously bought the Trinity Townhouse for €7m in 2016 and Sheen Falls resort in Kenmare, Co Kerry for c. €17m in 2018. Castlemartyr Resort is currently undergoing a program of refurbishments, and the purchase of the Hunted Hog is part of the development of an enhanced offering to guests and is a further investment by Castlemartyr Resort into the local area. There are plans in development which will see enhanced indoor and al fresco gastropub dining offered at the Hunted Hog. The Business Post, 19th December

Clonskeagh, Dublin 14 Ashtons pub has been acquired by Irish hospitality group Press Up, known for its Union Cafe and Elephant & Castle eateries and design-led hotels. The pub, which lies beside the River Dodder and is popular for its beer garden, function rooms, craft beers and extensive menu, will continue to trade under its existing name with no closure for renovations, at least in the short term. Ashtons was taken over in 2012 by Ronan Kinsella and Paul Lenehan. During this time, they acquired a restaurant licence for the premises and invested in a new patio and terrace area. However, their 10-year lease is up and has now been acquired by the Press Up Group. A spokeswoman for Press Up says the group will take over the lease in January. The move is the latest in a long line of developments for the Press Up Group. The group recently opened MacKenzies restaurant in the Opus building on Dublin’s docklands, while future plans include the development of a bowling alley in Dundrum Town Centre, and Bray Central, which will be home to a multi-screen Stella Cinema, bowling, Elephant & Castle and Wowburger outlets. The Irish Times, 16th December

Foxrock, Dublin 18 The Gables in Foxrock, south Dublin, is getting an extensive renovation under its new owner. During the summer, planning was sought by Haffenal Limited for works at the restaurant, which closed under its previous operators earlier this year. Alan Clancy runs the Nolaclan hospitality group, which includes 37 on Dawson Street and House on Leeson Street in its portfolio. The works include the removal of off street car parking, and the creation of an outdoor dining area with pergola overhead. However, the location looks likely to retain its name. The Irish Times, 16th December

OFFICE

North Wall Quay, Dublin 1 Hannover Re, the global reinsurer, has leased the penthouse floor at Iput’s 3 Dublin Landings office. Iput, the largest owner of offices and logistics assets in Dublin, has secured the reinsurance group on a 20 year lease for 11,300 sq. ft. The top floor of the building features a four-metre ceiling height and has landscaped external terraces. Iput, after buying the 119,000 sq. ft. building with vacant possession for €115m in 2020, has also leased 44,000 sq. ft. to Microsoft at the Docklands site. The building has been designed with an emphasis on sustainability and energy efficiency, obtaining a BER A3 rating and has been completed to a LEED platinum standard. React News, 15th December

Harcourt Square, Dublin 2 KPMG has exchanged contracts with Hibernia Reit for the development of its new Irish headquarters at Harcourt Square in Dublin. The firm will move to the 288,500 sq. ft. development in 2026. KPMG will pay an initial rent of €17m per annum from lease commencement and will receive the equivalent of 40 months rent free through an incentive and enhanced fit-out. The rent will be reviewed after five years. KPMG also has options to lease up to a further 48,500 sq. ft. on the same terms. The Irish Times, 21st December
 

RESIDENTIAL / DEVELOPMENT

Kilmainham, Dublin 8 An Bord Pleanála has refused planning permission to Bartra Property Limited for an eight-storey high 74-unit apartment scheme for Kilmainham, Dublin 8. The scheme faced strong opposition from local residents, An Taisce, the Save Kilmainham Mill campaign group and from members of Dublin City Council. The appeals board’s refusal upholds an earlier refusal by Dublin City Council and the board has refused planning permission for the site at 40 Old Kilmainham Road on four separate grounds. The scheme was made up of 35 one-bed units, 38 two-bed units and one three-bed unit. The board refused permission after concluding that the proposed development would have an overbearing impact, resulting in a reduced level of privacy, and be seriously injurious to existing residential amenity. The board also concluded that due to its excessive scale, bulk and unsympathetic design, the scheme would have a disproportionate and visually obtrusive impact on the surrounding area. The board also determined that the proposal should be refused as it provides for a development of insufficient quality in terms of safeguarding higher standards. The Irish Times, 17th December

Park West, Dublin 12 A subsidiary of Harcourt Developments, Greenseed Limited, has given notice that it intends to lodge plans in the coming days for 750 apartments for Park West in Dublin 12. The scheme is to comprise seven apartment blocks on a 23-acre site and is to be bounded by Park West Road and Park West industrial estate. A decision will be made on the strategic housing development application by An Bord Pleanála next year. The Irish Times, 17th December

Rental Market, Ireland Rents grew 8.3% nationally over the last quarter, the highest national growth rate seen since the end of 2017, the Residential Tenancies Board (RTB) Rent Index showed. Annual rent growth in Q4 2017 stood at 8.4%, marginally exceeding most recent figures. Dublin maintained its position as the county with the highest standardised average rent, at €1,916 per month, while the lowest standardised average rent was in Leitrim, at €731 per month. The report, compiled in conjunction with the Economic and Social Research Institute (ESRI), also showed a 31% fall in the number of tenancies registered nationally when compared to the same period in 2019. Twelve counties now have standardised average rents above €1,000 per month. The index was compiled based on actual rents paid on 15,042 private tenancies newly registered with the RTB during the quarter. Though annual growth is lower in Dublin than other locations in the third quarter of this year, the area’s quarter-on-quarter growth of 3.6% was the highest since the summer of 2019. The Business Post, 17th December

Bray, Co Wicklow Ballymore Group has suffered a setback in its plans to develop a large-scale €190m residential scheme on former Bray Golf Club lands. This follows An Bord Pleanála’s decision to refuse permission for more than half of the 591 residential units the group had proposed for the 23-acre site. The scheme was made up of 515 apartments and 76 houses. In a split decision concerning the scheme, An Bord Pleanála refused planning permission for two eight-storey high apartment blocks made up of 357 apartments. The board stated that it was refusing permission for the two blocks due to the poor design of their facade treatment and architectural expression. The board granted planning permission for the remaining 234 units. In 2019, Ballymore acquired the larger 52.6-acre Harbour Point lands on the site of the former Bray Golf Club. The site was put on the market for €27.5m by receiver Deloitte. The documentation lodged with Ballymore’s scheme on its social housing obligations put an indicative cost of €255,335 on the one-bedroom units, €461,257 for the two-bedroom ones and €647,794 for the three-bedroom units. As part of a planned further phase of development, Ballymore intends to construct a mixed-use landmark building. The Irish Times, 16th December

Tyrellstown, Dublin 15 A building company has lost an appeal in which it claimed an arrangement to license out new homes to an auctioneer before they were sold to individual purchasers meant it didn’t need to account for VAT on each sale. The Court of Appeal found the High Court was correct to conclude the principal aim of the licence arrangement between Vieira Ltd, which built 198 homes in Tyrellstown, Dublin, and McPeake Auctioneers was to obtain a tax advantage and was artificial in nature. Vieira was assessed by Revenue for VAT of c. €1.9m on houses sold between September/October 2003 and August 2004. Vieira contended it had already paid the appropriate VAT of c. €4.4m. The company appealed the assessment and it was confirmed by the Tax Appeals Commission. Vieira then appealed to the Circuit Court, contending it had previously accounted for VAT by means of this “self-supply” arrangement and asserted that the licence agreements were either a letting of immovable property or a surrender of possession for the purposes of the VAT Act 1972. The Circuit Court dismissed the appeal concluding that “at no stretch of the imagination” could the licence agreements be considered a letting of immovable property, under EU case law principles, or a surrender of possession. That decision was confirmed in subsequent appeals to the High Court and now the Court of Appeal, which dismissed the appeal on all grounds. The Irish Times, 15th December

Build-To-Rent Developments, Dublin Siobhán Quinlan has entered the build-to-let property arena, with plans to develop 668 apartments over three sites, two located in Tallaght and a third in Sandyford in Dublin. At the start of the month, Ravensbrook, a company she owns, submitted plans for 326 build-to-rent apartments at the former Woodie’s site in Belgard Square East in Tallaght, under the state’s Strategic Housing Development process. Meanwhile, a second company that is 100% owned by Siobhán Quinlan is seeking to build 241 build-to-let apartments at a second Tallaght site, the former Agnelli motors lot on the Greenhills Road. However, in a recent pre-planning consultation, An Bord Pleanála advised the application would “require further consideration/amendment”. Ravensbrook has also applied under the fast-track process to develop 101 build-to-let apartments at a third site, in Sandyford in Dublin 18. Ravensbrook has funding from a debt fund linked to the Carne Group according to companies office records. The Business Post, 19th December

New Land Rezoning Tax, Ireland Landowners will be hit with a new rezoning tax of 30% next year to raise more money for local infrastructure. Darragh O’Brien, the Minister for Housing, secured cabinet approval last week to draft the new legislation for a land rezoning tax. It will result in landowners having to pay a tax of 30% on the gains that they make when their agricultural or industrial land is rezoned for housing in future. The tax, known as land value sharing, was promised in the Housing for All plan published last September. A 30% rezoning tax has been proposed, on top of the requirement to have 20% of the site set aside for social and affordable housing. This would amount to a 50% charge that anyone buying land would have to pay if it was rezoned for housing and granted planning permission. The draft scheme of the bill states that when a landowner is seeking to develop housing on newly rezoned land, there will be a requirement to pay a “certain proportion of the uplift in value of the land” as part of the planning permission conditions. O’Brien is working on a further measure to allow councils to designate large parcels of land as “urban development zones” for new housing, parks and shops. The government is planning to gradually extend the rezoning tax to existing rezoned land after “at least six years” to give owners time to develop them. The Business Post, 19th December

NAMA, Ireland The chief executive of the National Treasury Management Agency has rejected assertions that the agency is contributing to the housing shortage by not releasing sites that have the potential to deliver thousands of homes. Mr. Brendan McDonagh said the NAMA board was working on a plan that would see the portfolio realised by the end of 2025 by which time the agency would be wound down. He was speaking as the agency made a final transfer of surplus cash to the exchequer for this year, bringing to €3bn the total NAMA has transferred to the Exchequer since it was established in late 2009. The agency was set up with a remit to take over €70bn of bad loans off the banks’ balance sheets to allow them to focus on rebuilding after the crash. RTÉ, 20th December

Social Housing, Ireland More than 30% of social housing units acquired under Part V by Dublin City Council this year have been through long-term leasing deals with developers, new figures show. Developers are obliged under Part V of the Planning and Development Act to allocate 10% of units in a new development for social housing. Local authorities most often purchase these units below market rates to add to their own housing stock but have an option to enter leasing arrangements. Figures released by Dublin City Council show a 40-fold increase this year in the number of social housing units obtained by entering leasing deals. In 2019, the council directly acquired a total of 123 units for social housing under Part V with 81 units purchased in 2020. Of the 136 units delivered by Part V so far in 2021, 41 have been delivered by entering leasing deals compared to just one unit delivered by this mechanism last year. The practice, whereby a developer still owns the units at the end of the term, has been heavily criticised. Under the long-term leasing scheme, the state leases new or second-hand homes at 80% to 85% of market rent for between 15 and 25 years. The government’s Housing for All plan commits to ending the practice by 2025. The Business Post, 20th December
 

OTHER

Asian CRE Investment, Ireland Wealthy Asian investors, who have snapped up more than a thousand Irish homes in recent years, have started to divest from the Irish housing market amid fears of a property crash in China. Vanke, a Chinese property agency based in Ireland, has brokered property deals for many high-net worth individuals in recent years. For the first time, it has started to sell off Irish homes and investment properties on behalf of Asian investors. In December, several properties have been advertised for sale by Vanke on Daft.ie.  Real estate industry sources said Vanke has been “quiet on the buying front” in recent months. The Business Post, 19th December

Ulster Bank, Ireland Permanent TSB has formally agreed to acquire €7.6bn worth of assets from Ulster Bank Ireland. The deal includes Ulster Bank’s €7bn performing non-tracker residential mortgage book and its performing SME loan book – worth €230m. It also includes the entire Lombard Asset Finance loan business – worth €400m – and 25 branches in Ulster Bank’s branch network. As part of the deal, NatWest will acquire 16.66% of Permanent TSB Group Holdings, the bank said in a statement. The deal remains subject to obtaining the required regulatory approvals from the Competition & Consumer Protection Commission, the Central Bank and approval by Permanent TSB shareholders. It is expected to complete in late 2022 or early 2023. Permanent TSB said the assets being included in the deal will increase its mortgage book by c. 40% from its end-2020 level. The bank intends to partner with Pepper Asset Servicing to support the servicing of the Ulster Bank mortgage book which is being bought. While performing tracker mortgages are not part of the agreement, Ulster Bank and NatWest Group are working on a pathway for these customers and a process is underway in this regard. RTÉ, 17th December

 

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