21st July (Issue 4)
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
Burlington Road:
Union Investment, who in February purchased Numbers 4 and 5 Grand Canal Square for €232m, is to fund the development of Dublin’s largest prime office speculative development on Burlington Road, Dublin 4. The site sold for over €40m in June 2014, following which the previous building was demolished. The new building will consist of 170,000 sq. ft. of office space and is expected to be completed in H1 2017. The Irish Times, 15th July
Corrib Collection:
DTZ have brought two Galway City properties to the market with a guide price of €32m. The properties are Geata na Cathracha, Fairgreen and the majority of Dockgate office block, together the Corrib Collection. Geata na Cathracha is a mixed use, 126,000 sq. ft. property which is fully let and producing annual rental income of €1.63m. It is valued at €23m based on a yield of 6.47%. The section of Dockgate for sale consists of 48,000 sq. ft. of office space producing annual income of €527k. It is valued at €9m based on a yield of 5.6%. The Irish Times, 15th July
Bray Business Park:
An international investor has paid c. €9m for an office block at the IDA Business Park at Southern Cross, Bray, Co. Wicklow. The property is occupied by Trinity Biotech at a rent of €786k p.a., offering a yield of over 8%. The current lease has c. 17 years remaining with upwards only rent reviews. The Irish Times, 15th July
Elm Park:
The Quartz on Elm Park, which has long been vacant, has been let to two international companies who will both pay €23 psf. Wallis have rented 50,000 sq. ft. while Wipro have rented the remaining 20,000 sq. ft. Both are let on long leases with five yearly break options. The building was purchased by BMO Real Estate Partners in 2009, having previously been developed by Bernard McNamara. The Irish Times, 15th July
Tara Street:
Johnny Ronan has teamed up with the Wilbur Ross-backed Cardinal Capital to develop Dublin’s tallest building at Tara Street train station. The €130m office tower will be 22 stories tall, which will make it larger than Google’s Montevetro building – also built by Ronan. Last March, CIE (which owns the key site) hired Lisney to find a partner to help it develop an office scheme behind Tara Street train station. Ronan is understood to have beaten off a number of other groups to ink the deal for the €130m project. The Sunday Independent, 19th July
HOTELS
The Gresham Hotel:
NAMA is preparing to bring Dublin’s Gresham Hotel to the market. The hotel is owned by Precinct Investments, the company that led the €117m buyout of the Gresham Hotel Group in 2004. The Gresham, which was built in 1817, has more than 300 rooms, and will be sold at a time of rapidly rising room rates and occupancy in the capital. The hotel is expected to attract a wide range of interest from domestic and international players. The Sunday Times, 19th July
Project Trinity – Jurys Hotel Site Ballsbridge:
The new owner of the landmark Jurys Ballsbridge site in Dublin 4 could be unveiled this week. Bidders last week submitted second-round and best bids for the site. Cairn Homes, which led the first-round bidding with a top offer of €155m, is still in the frame, alongside Joe O’Reilly’s Chartered Land, Colony Capital and partner Paddy McKillen, and London & Regional, a former owner of the nearby Four Seasons hotel. The sale, known as Project Trinity, consists of a 6.8 acre site encompassing the former Jurys Ballsbridge and the Berkeley Court site. The site has planning permission for a 1.5 million sq ft development, including 490 apartments, a 152-bedroom hotel, shops and offices. It is believed that some of the bidders are looking to resubmit plans for the site, to enhance its commercial potential. The Sunday Times, 19th July
Lough Erne:
A consortium led by American financier Michael Saliba has completed an €11m deal to take over the five star Lough Erne resort in Co. Fermanagh. The property, which hosted the G8 meeting two years ago, has facilities including two golf courses, a 125 bedroom hotel and a conference centre with capacity for 400 people. The sale also included 25 lodges. The Irish Times, 20th July
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RETAIL
Golden Island Shopping Centre:
Tesco have appointed TWM to sell Golden Island Shopping Centre in Athlone, inviting offers in excess of €40m. The 145,000 sq. ft. shopping centre’s current income of €3.1m p.a. offers an initial yield of 7.42%, with Tesco and Penney’s being the anchor tenants. Bids can be made for the centre with or without the 41,000 sq. ft. Tesco unit, which would likely rent in the €20 – €25 psf range. On a comparable basis, the adjacent Athlone Town Centre sold earlier this year for €61m, offering a 7% yield on income of €4.9m p.a. The Irish Times, 15th July
South William Street / Drury Street:
Ulster Bank have sold a four storey over basement commercial building which has dual frontage on to Drury Street and South William Street to a private investor for €5.5m, a figure some €250k below the guide price. The total floor area of 15,553 sq. ft. is primarily let to Zaragoza Restaurant, who are paying annual rent of €160k. The building has total rental income of €278k p.a., rising to €367k p.a. by 2017. The Irish Times, 15th July
RESIDENTIAL
Housing Shortage:
With the lack of supply becoming more and more apparent in the Dublin residential market, it has emerged that Dublin City Council would need to almost double their current supply to provide accommodation for every applicant on their waiting list. Currently Dublin City Council own 25,000 flats and houses, with 21,592 applicants (over 42,000 people) seeking council housing. Last year the council housed 960 applicants. The Irish Times, 14th July
Boland’s Mill:
NAMA are to consider all options for the proposed €150m redevelopment of the Boland’s Mill site in Grand Canal Dock, including a partnership or licencing agreement. Dublin City Council recently approved NAMA’s planning application to construct three new residential / office blocks and the redevelopment of the five derelict mill buildings, with the tallest building to be 53 metres high. The Irish Independent, 16th July
Ballymore Group:
Sean Mulryan’s Ballymore Group, together with the Malaysian developer Eco World Investments, are to construct up to 1,700 homes in London on a site which was previously 12 acres of wasteland. The venture has been dubbed the London City Island project and is located in east London on the Leamouth peninsula. The initial development is for 417 apartments, with prices ranging from c. £375k for a one-bed to £750k for a three-bed. The Irish Times, 16th July
Other
Senior Loan Margins:
DTZ report that senior loan margins for prime commercial real estate lending across Europe’s primary cities continue to compress, with Dublin reporting the fastest margin compression. Over the last 18 months margins in Dublin have halved, buoyed by the turnaround in the commercial property market. In particular DTZ cite the €245m facility which Morgan Stanley provided to Starwood in March, used to purchase four Dublin office properties for €350m from Lone Star, at a margin of 1.9%. CoStar Finance, 14th July
Clarendon Inn:
A group of investors are believed to have purchased The Clarendon Inn on Clarendon Street for over €2.3m, significantly above the €1.6m guide price. The Clarendon Inn comprises 4,068 sq. ft. across four floors and was previously owned by Bernard McNamara, who purchased the property for c. €7m in 2006. CBRE handled the sale on the instruction of the receiver Duff and Phelps.
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