21st June (Issue 352)
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.
RETAIL
Rathfarnham, Dublin 14 French investor Iroko ZEN has entered the Irish investment market with a €10.14m (NIY 5.28%, WAULT 9.8 years) deal for a newly built and fully let retail scheme developed by Ardstone in south Dublin. Located on Stocking Avenue in Rathfarnham, the White Pines retail centre comprises a purpose-built supermarket and a three-storey creche building located on a 1.98-acre site and forms part of a major residential scheme developed by Ardstone featuring a mix of one- to four-bedroomed units catering for up to 636 families on an overall site of 36.3 acres. The supermarket extends to 15,833 sq. ft. and is fully let to Tesco Ireland Limited on a 20-year FRI lease with an annual passing rent of €477.6k with rent reviews every five years. Tesco has been trading since February of this year and has 69 car parking spaces on site. The creche, extending to 6,361 sq. ft., is let on a 25-year FRI lease to Safari Childcare Limited at a rent of c. €109k pa also subject to five-yearly rent reviews. The Irish Times, 15th June
Blanchardstown Centre, Dublin 15 Fashion retailer Zara is to increase its presence at the Blanchardstown Centre after striking a deal for a new outlet on the scheme’s second floor. The unit, which had been occupied previously by Debenhams, will accommodate Zara’s womenswear, menswear, childrenswear and accessories collections. The agreement of the letting will see the Spanish-owned brand’s footprint at Blanchardstown grow from the 16,000 sq. ft. it occupies to 52,000 sq. ft. News of the deal comes just over two months after premium fashion group Flannels signed for the ground floor of Debenhams’ former premises in Blanchardstown. The Irish Times, 15th June
The Cobalt Collection, Ireland Manchester-based investment firm David Samuel Properties is in talks with US real estate investor Davidson Kempner in relation to the proposed acquisition of a portfolio of three of Ireland’s best-known regional shopping centres. The “Cobalt Collection”, as it is known, comprises Letterkenny Retail Park in Donegal, Tullamore Retail Park in Co Offaly, and Deerpark Retail Park in Killarney, Co Kerry, and was offered for sale in March at a guide price of €67.5m. Should the deal proceed, it would represent David Samuel Properties’ first investment in the Republic of Ireland. The Irish Times, 15th June
OFFICE
Naas Road, Co Kildare The Otter House investment on Dublin’s Naas Road has been acquired by Irish Distillers, part of the global wine and spirits group Pernod Ricard, for c. €8m. The property sits on a 3.1-acre site adjoining its existing premises in Fox and Geese at the rear of Otter House. The price paid represents a premium of 33% on the €6m agent BNP Paribas had been guiding when it offered the property to the market last October. The mixed office and warehouse Otter House occupies c. 24% of the overall site area. Irish Distillers can avail in the meantime of rental income of €512.5k pa from four long-standing tenants in Otter House, including Modern Plant Ltd, Ladbrokes Ltd, Campion Insurances Ltd and FKM Engineering Ltd. The Irish Times, 15th June
Westland Business Park, Dublin 12 Agent TWM is offering a newly refurbished office building to the market at Westland Business Park in Dublin 12. Block A comprises 25,479 sq. ft. of office space distributed across three floors, along with 70 car parking spaces. The property is available to rent, or to purchase at a guide price of €5m. TWM notes that the overall capital rate of €196 per sq. ft. is below the current build cost for the real estate without factoring in the site value. The Irish Times, 15th June
Docklands, Dublin Deutsche Bank is to rent c. 12,700 sq. ft. of office space on part of the second floor at No. 2 Grand Canal Square located in the west end of Grand Canal Dock in Dublin. The German multinational investment bank and financial services company has agreed to a rent of €57 per sq. ft. on a ten-year lease.
At 24-26 City Quay, European Refreshments and Morgan Stanley were secured for the fourth and fifth floors of 25,000 sq. ft. after Irish Life completed a major refurbishment project of the former Grant Thornton HQ. Morgan Stanley took occupation of the prime penthouse floor of 12,701 sq. ft. and agreed to pay a rent of just under €61.50 per sq. ft. on a new long-term lease. In taking 15,015 sq. ft. on the fourth floor, European Refreshments paid rent in excess of €62 per sq. ft. for a lease which includes a year-five break option, offering flexibility for potential expansion. Both occupiers are paying €4k per car parking space. The Business Post, 17th June
Office Supply, Dublin A flood of new offices hitting the market is running well in excess of post-pandemic demand which has been dampened by the big shift to remote working, the Central Bank has warned. It suggests demand would have to double from the average of c. 1.6m sq. ft. of Dublin office space taken up in 2020 and 2021 to match the supply coming onstream between now and 2024. More than 10m sq. ft. of new offices are currently at various stages of development in Dublin alone, half of it due for completion between 2022 and 2024, the analysis said. The glut of new supply is partly due to a backlog built up by site closures and other pandemic-related disruptions. Foreign direct investment is the biggest driver of large scale new office lettings in Dublin and it has held up after the initial phase of the pandemic, but there’s now significant uncertainty about the size of new offices required to host employees. The Irish Independent, 16th June
Pembroke Road, Dublin 4 Plans to demolish the eight-storey Carrisbrook House in Dublin 4 and replace it with a 10-storey office block have been stalled. Last month, Dublin City Council granted planning permission to Atria V Lux SARL for the demolition of the well-known building, which is located at the junction of Pembroke Road and Northumberland Road and across from the site of the former Jury’s hotel. The new office block scheme, at 136,594 sq. ft., will provide more than three times the gross floor area of the current Carrisbrook House. However, the scheme has been stalled after an appeal was lodged to An Bord Pleanála against the council’s decision by the Pembroke Road Residents Association and the Lansdowne and District Residents Association. Planning consultants for the scheme, John Spain & Associates, said the proposal “represents a further opportunity to secure the improvement of an inner suburban site at a strategic location”. A decision is due on the appeal in October. The Irish Times, 20th June
MIXED-USE
Cork City Centre An investment property, made up of a pub/restaurant with nine apartments is for sale in Cork city centre, carrying a €2m price guide. Listed with Savills, the property comprising Paddy the Farmers bar/restaurant with overhead and adjacent apartments, all bringing in a rental return of c. €172k from the various fully let elements. It equates to a 7.05% return at the €2m guide. Paddy the Farmers is on a new 10-year lease at €40k pa with a five-year break option. The Irish Examiner, 15th June
INDUSTRIAL / LOGISTICS
Glasnevin, Dublin 9 British property developer U+I is selling three adjoining industrial investments with residential development potential in Dublin Industrial Estate, Glasnevin, Dublin 11. Savills is guiding more than €6.25m for the properties. Standing on a 2.4-acre site (€2.5m per acre), the three are let to WestRock, the international packaging firm, for c. €257k pa until 2025. The site is zoned objective Zone Z6: Employment/Enterprise Zones. The Irish Independent, 16th June
For lending terms on this asset please contact rossmetcalfe@origincapital.ie
RESIDENTIAL / DEVELOPMENT
Glasnevin, Dublin 9 Situated immediately adjacent to the National Botanic Gardens and within a short distance of Dublin city centre, the Glasnevin Hill residential scheme by Fitzwilliam Real Estate comes with full approval from An Bord Pleanála for the construction of 101 apartments over two blocks of six and seven storeys respectively, along with retail and medical units at ground-floor level. The 1.1-acre site, which currently comprises a former motor garage and a dwelling, is guiding at a price of €5m through Knight Frank. While the approved development is envisaged to be operated as a PRS scheme, it has been designed to BTS apartment standards. The Irish Times, 15th June
Leixlip, Co Kildare Glenveagh, the publicly quoted housing developer, has acquired 36.38 acres of land which had been part of the Leixlip Castle estate on the edge of Leixlip, Co Kildare. According to market sources, Glenveagh paid more than €15m (€417k per acre). Not all of the land will be developed for housing as less than half, 16.46 acres, are zoned new residential, while 3.77 acres are zoned open space and amenity and 15.97 acres are zoned strategic open space with the latter to provide for an improved recreational amenity open space and green infrastructure networks. The Irish Independent, 16th June
Bulk Buying Residential Assets Statistics, Ireland Property investors and institutional funds have bulk bought more than 350 houses at a cost of over €100m since the government attempted to limit the practice. The figures released by the office of the Revenue Commissioners show the funds have paid levies of more than €30k per home to secure the properties, which is ten times the regular stamp duty levy owed when a property is purchased. Last year, in an attempt to discourage institutional funds from bulk-purchasing houses, a new stamp duty rate of 10% was introduced for any fund that bought more than ten houses in a 12-month period. The higher stamp duty rate did not apply to funds bulk purchasing apartments. Figures released by the office of the Revenue Commissioners show that at the end of May 2022, the 10% stamp duty levy was applied to the price of 351 residential units, with the duty payable totalling €10.5m. Based on those figures, property investors have bulk bought €105m worth of houses since the new 10% rate was put into effect by the Department of Finance on May 20, 2021. Investors spent an average of €299,145 per home, while the average higher-rate of stamp duty applicable to these properties was €29,914. Last week, new data from the CSO showed that the median price of a home on the Irish residential property market was €286k at the end of April. The Business Post, 19th June
Dundrum Village SHD Hammerson, which in April submitted a planning application to An Bord Pleanála for the 11-block development under the fast-track Strategic Housing Development process, says it will “continue to consider” whether the apartments will be available for sale or rent only during their construction, expected to take several years. However, indicative prices for the social housing element range from €385.3k for a one-bed to c. €789k for a three-bed apartment. Under the county development plan, the site is earmarked for residential development but it should have complementary uses such as employment, restaurant, leisure, entertainment and creche facilities. There is also a specific objective for any redevelopment of the site to “address the need for the provision of a future Dundrum community, cultural and civic centre facility”. Hammerson says its scheme is neither in conflict with the zoning or the council’s specific local objectives for the site. The Irish Times, 21st June
OTHER
Hibernia Reit The State’s largest landlord Hibernia Reit formally delisted from the Irish Stock Exchange on Monday morning following the completion of its acquisition on Friday. Hibernia accepted a €1.1bn takeover by Canada’s Brookfield Asset Management in March. Under the terms of the acquisition, Hibernia Reit shareholders received €1.634 in cash for each Hibernia Reit share. This would be made up of €1.60 per share and a dividend of 3.4 cent per share. The acquisition, including the dividend, values the entire issued and to be issued share capital of Hibernia Reit at c. €1.089bn on a fully diluted basis. It was valued at c. €781m in the market. The Irish Times, 20th June
Construction Industry, Ireland The results from Knight Frank’s latest annual survey of Ireland’s top residential developers show that the new homes construction industry recovered strongly from last year’s Covid-induced disruption which effectively shut the sector for the first four months of the year. In all, 55% of respondents stated that their development activity in 2021 was stronger than in 2020. This was also reflected in official data from the Department of Housing as 31,000 units commenced construction in 2021 — the highest number of new housing starts since comparable data were first published. Although 56% of respondents believe that their development activity will be stronger again in 2022, the survey highlights a number of critical issues such as the shortage of residential development land, planning delays and spiralling labour and material costs, which raises questions about the industry’s ability to deliver sustained improvements in the number of completions over the medium term. The Irish Times, 21st June
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