21st June (Issue 51)
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.
LOAN / PORTFOLIO SALES
Project Pluto: Deutsche Bank and Cerberus are both believed to be interested in acquiring Danske Bank’s Project Pluto loan portfolio. The portfolio has a par value of c. €900m and consists of unsecured personal loans and a mix of buy-to-let and owner-occupier mortgages. The unsecured loans represent c. 33% of the portfolio. Some of the residential loans are believed to be non-performing, while the unsecured loans reportedly include mortgage shortfall loans which remain outstanding following the disposal of properties in negative equity. The Sunday Times, 19th June
Project River: An unnamed Irish individual has acquired the Project River loan portfolio from Tetrarch Capital for c. €21.5m. The loans are secured by assets which were previously owned by the developer Liam Carroll. The majority of the assets are retail and office units located in Dublin 1, 2, 8 and 20. The assets are segregated into eight lots and have 31 tenants in situ, including Lidl and BWG. The total annual rental income is c. €1.83m, offering the investor a net initial yield of c. 8%. The Sunday Business Post, 19th June
RETAIL
Blanchardstown Shopping Centre: Blackstone has announced that it has purchased Blanchardstown Shopping Centre from Green Property. Market sources estimate that the fund has paid c. €930m for the shopping centre, which has an annual rental income of c. €50m. The shopping centre is c. 97% occupied and will offer an initial yield of c. 5.4%. NAMA Wine Lake, 19th June
Dealz Expansion: The discount retailer Dealz is to open up to 20 new stores in Ireland over the next 12 months. As of March 2016, the retailer had 53 stores in Ireland, for which they have c. 300k customers every week. Dealz’s revenue for their UK and Ireland stores for the year ending March 2016 was c. £1.21bn, an increase of 9.3% over the previous year. Dealz is owned by Poundland. The Irish Times, 16th June
Nassau Street: Meyer Bergman and BCP International Property Fund are set to acquire five retail units in Dublin 2 from Ardstone Capital for over €13.5m. Ardstone Capital purchased the properties over two years ago for c. €10m. The retail units have a floor area of 11,500 sq. ft. and are located at 1 Dawson Street and 27 – 32 Nassau Street. The current annual rental income of c. €700k is expected to increase in the future from a top-up agreement. Current tenants include Costa Coffee, KC Peaches (Ireland) Ltd and Trinity Sweaters. Upon completing the deal, the consortium will own 14 shops and 80,000 sq. ft. of office space on Nassau Street and Dawson Street. Last September the consortium paid c. €93m for Nassau House. The consortium is reportedly interested in redeveloping their portfolio of assets into a number of large scale retail units similar to those on Grafton Street. The Irish Times, 15th June
Shannon Retail Park: Bannon has been retained by receiver PWC to secure a buyer for the Shannon Retail Park and an adjoining 16-acre site near Athlone, Co. Westmeath. The cumulative guide price is €2.2m, with the retail park valued at €1.95m and the site valued at €250k (c. €15.5k per acre). The retail park has five units, however Unit B1 is excluded from the sale. The retail floor area of the units included in the sale is 42,529 sq. ft. The annual rental income will reach c. €211k in April 2017 upon expiry of a stepped rent. Tenants include Smyths Toys and Heavins Hardware. The 16-acre site is zoned for “Enterprise and Employment” and had previously been granted planning permission for a commercial mixed-use scheme, however this has since expired. The Irish Times, 15th June
Sandyford Hall: Bannon is inviting offers of €3.7m for the Sandyford Hall commercial centre in Dublin 18. The property is fully let and tenants include Centra, Costa Coffee and McCabes Pharmacy. The annual rental income is c. €321k, representing an initial yield of c. 8.1%. The total floor area is 15,313 sq. ft., spread across 11 units. The Irish Times, 15th June
OFFICE
Allianz Elm Park: Starwood has agreed to sell the Allianz Plc building in Elm Park, south Dublin to Standard Life for c. €58m. The deal comes less than four months after Starwood completed the purchase of the Elm Park complex and it should provide Starwood with a profit of c. €5m on the office block. Allianz occupy the eight-storey block under a 50-year lease signed in January 2008. Two break options exist in the lease in 2023 and 2033. Allianz occupy 83,272 sq. ft. of the 86,272 sq. ft. property, for which there are also 75 underground car spaces. The annual rent paid by Allianz is c. €4m, which equates to c. €45.45 psf for the office space and c. €2k for each car space. The Irish Times, 15th June
Harcourt Square: Hibernia has received planning permission for Phase Two of its proposed redevelopment of the Garda Communications Centre on Harcourt Square in Dublin 2. Hibernia received planning permission for Phase One in 2015 and now has permission to develop a total of 276,500 sq. ft. of new office space and ancillary accommodation on the 1.9 acre site. Hibernia purchased the site for c. €70m in 2015. There is currently a legal dispute between Hibernia and the OPW as Hibernia is seeking vacant possession of the site. The Irish Times, 21st June
HOTEL
Gresham Hotel: The preferred bidder for the 4-star, 323-bed Gresham Hotel is expected to be announced shortly after final bids were submitted last week. The two highest bidders are understood to be Tifco and the Spanish hotel operator RIU, who have reportedly submitted offers of c. €88m and c. €91m respectively. Joint agents CBRE and Christie & Co had been guiding €80m for the hotel. The Gresham Hotel is owned by Precinct Investments Ltd. Accounts for Precinct for 2014 show that the hotel had turnover of c. €18m and an operating profit of c. €3.4m. NAMA Wine Lake, 19th June
Clifton Court Hotel: Goldman Sachs has appointed Tom Kavanagh of Deloitte as receiver over the assets of Sinann Inns (SI), which include the 30-bed Clifton Court hotel in Dublin. Goldman Sachs acquired the loans of SI in an IBRC loan sale through an investment vehicle named Ennis Property Finance. At the end of June 2015, SI valued its assets at c. €7.5m, however the company had debts outstanding of c. €8.5m. The Sunday Times, 19th June
Dean Street Hotel: The Hodson Bay hotel group has been given planning permission to develop a 4-star, 257-bed hotel on Dean Street in Dublin 8. The hotel is expected to cost c. €40m to develop and will employ c. 200 staff once operational. The group have a strong relationship with Starwood Hotels & Resorts so the hotel is most likely to be operated as a Sheraton Hotel, should the group elect to operate it under a franchise licence. The Irish Independent, 20th June
RESIDENTIAL / LAND
Point Village: DTZ Sherry Fitzgerald is inviting offers of €18m for a 2.38 acre site (€7.56m per acre) which is alongside the Point Village in the north Dublin docklands. The site has planning permission for 935 student bed spaces which are to be constructed across two seven-storey blocks. One of the blocks will provide 589 bed spaces whilst the other will provide 346 bed spaces and 9,322 sq. ft. of commercial retail space. PWC are managing the sale as receivers on behalf of Wintertide Ltd and two adjoining land owners, NAMA and CIE. The Irish Times, 15th June
Arklow Harbour: Gains Europe Ltd has paid slightly over €3m to acquire a 12.92-acre site in Arklow Harbour, Co. Wicklow. The site was previously owned by Brattice Properties, who paid c. €31m in 2007. Brattice Properties had reportedly hoped to develop a significant commercial and residential scheme on the site, however this never came to fruition. NAMA then appointed a receiver to dispose of the site. Gains Europe Ltd is already in situ, as they were previously renting a manufacturing property on the site. The Irish Times, 15th June
Coca-Cola Drogheda: The 29-acre site of the former Coca-Cola manufacturing facility in Drogheda, Co. Louth has sold for marginally under €3m, far below the €4.35m asking price sought by agents GVA Donal O’Buachalla. There are no longer any properties on the site, as Coca-Cola demolished all the properties before it was listed for sale. The fact that the site is designated as an “Employment Generating Zone” is believed to have negatively impacted the demand for the site. The Irish Times, 15th June
Leinster Residential Portfolio: DTZ Sherry Fitzgerald is seeking bids of €39m for a residential portfolio in Leinster. The key asset is a 24.7-acre site on Stocking Avenue in Rathfarnham, Dublin 16, which has planning permission for 253 homes. In addition to the site, there are also 60 apartments and eight houses for sale, with the assets spread across 11 residential schemes. These locations include the Iveagh Exchange in Parnell Street, Dublin 1 and The Orchard in Lucan, Co. Dublin. The Irish Times, 15th June
Housing Completions: The number of new residential units completed nationally in April 2016, based on new ESB connections, was 1,149 (296 in Dublin). Under the assumption that Ireland needs 2,087 new units a month (866 in Dublin), the housing crisis worsened by 938 units nationally in April (570 in Dublin). New figures for commencement notices also reveal that just 784 notices were filed in April 2016 (242 in Dublin) and 1,223 in May 2016 (412 in Dublin). Under the assumption that it takes c. 6 months between commencement and completion, it is estimated that just 8,514 units will be completed nationally in the first 11 months of 2016 (3,193 in Dublin). NAMA Wine Lake, 19th June
INDUSTRIAL
Airways Industrial Estate: Joint agents DTZ Sherry Fitzgerald and TWM are guiding €3.2m for Units 7 and 8, Airways Industrial Estate, in Santry, Dublin 9. The two units are let to Essentra Packaging Ireland on 15-year leases. The lease for Unit 7 was signed in July 2015 while the Unit 8 lease was signed in February 2016. The leases have break options in year ten. The combined rent is €300k p.a. in years one to four, however this increases to €320k p.a. in year five. There are also rent reviews every five years. The Irish Times, 15th June
OTHER
Google Data Centre: Google opened its new c. €150m data centre in west Dublin on Thursday, June 16th. The data centre took approximately one year to build and is Google’s second in Ireland. The data centre employs 30 people and created 400 jobs during its construction phase. The Irish Times, June 16th
Pub Market: The Sunday Times reports that there has been a recovery in the Dublin suburban pub market, as evidenced by a number of recent transactions. Recent sales included Kennedy’s in Drumcondra for €1.7m (guiding €900k), Smyths in Fairview for €700k and Rathfarnham’s Castle Inn, which sold for €660k. McDonagh’s in Dalkey has also gone sale agreed in the past few weeks. The pub had an asking price of €1m. The Sunday Times, 19th June
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