21st March (Issue 88)
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
Subprime Mortgage Portfolio: Investment firm Chenavari is reportedly in advanced negotiations to buy a mortgage portfolio that originated from GE Capital’s former Irish subprime loan book. It is believed Chenavari may be acting with Dublin buy-to-let lender Dilosk on the transaction. Chenavari recently took a minority stake in Dilosk and has committed to funding mortgages through the company. The portfolio, which is made up of performing loans, is part of the €600m mainly troubled loan book that GE sold to Australian firm Pepper in 2012 in a deal backed by Goldman Sachs. It is believed that Dilosk is only likely to be interested in buying a performing loan portfolio, however industry sources have stated that Chenavari may also have an appetite for the non-performing loans in the former GE book. The Irish Times, 15th March
RETAIL
Regional Retail Landscape: The Sunday Times analyses the changing landscape of the regional retail sector, which is facing significant challenges due to the increased focus on online sales, and the uncertainty surrounding Brexit. Due to the growth of the online market, many established retailers are now focusing less on their bricks and mortar units, and more on their online offering. Aiden McDonnell of Colliers reports that retailers now tend to focus more on a smaller number of larger sized units in central locations, as opposed to a large number of smaller sized units. The exceptions to this current trend comes from discount retailers such as TK Maxx, whose price point is so low that it doesn’t need an online offering. The Sunday Times, 19th March
Waterford Sites: The Irish Times reports that Saudi Arabia’s largest operator of shopping malls, the Fawaz Alhokair Group, is believed to have “agreed purchase terms” with Waterford City Council and NAMA for a four-acre site on Michael Street in Co. Waterford. The site has planning permission for a c. 110,000 sq. ft. shopping centre and a 400-space car park. The paper also reports that the group has also agreed terms for a nearby 17-acre site on the North Wall Quay. The 17-acre site has a special planning status and may be used for retail, office and / or residential space. The shopping centre is expected to be completed and open for business before the end of 2018. The Irish Times, 21st March
OFFICE
Dundrum Office Buildings: Joint agents Finnegan Menton and Cushman & Wakefield are guiding in excess of €15m for two office buildings and two levels of retail units in a third block located at Rockfield Central in Dundrum, Dublin 14. The buildings are being sold in one lot, offering a yield of 8.5% after standard purchaser costs. The portfolio is currently 92% occupied and is producing a rental income of €1.3m p.a., a figure which the letting agents advise could be increased by renting two vacant floors and increasing some of the existing rents from c. €15 – €18 psf to c. €25 psf. Mott MacDonald is the highest paying office tenant, paying c. €269k p.a. for c. 16,000 sq. ft. of space. The buildings are located in the 14-acre Rockfield Central scheme, which contains 388 apartments, c. 97,000 sq. ft. of commercial buildings, the Balally Luas stop and a park and ride facility for 400 cars. The Irish Times, 15th March
The Times Building: The sale of The Times building on D’Olier Street in Dublin city centre to the German fund Real IS has been completed. The new owner purchased the building, which was the former HQ of The Irish Times, for c. €50m from Kennedy Wilson in an off-market transaction. As well as the 51,290 sq. ft. of office accommodation, the sale included seven self-contained retail units and four two-bedroom apartments. The Aviation Authority pays c. 85% of the current rental income of c. €2.6m p.a. The Irish Times, 15th March
School House Lane: Savills is quoting a rent of €57.50 psf for a mid-size office block located at 5 School House Lane off Kildare Street in Dublin city centre. The building is currently being upgraded by owners Kennedy Wilson, who is spending c. €3.5m refurbishing the block for occupation this summer. The five-storey building extends to 16,000 sq. ft. and there is likely to be considerable interest in the letting due to its prime location in the heart of Dublin’s business district. The Irish Times, 15th March
HOTEL
The Marker Hotel: The Sunday Times reports that Brehon Capital Partners and Midwest Ventures, the owners of the Marker Hotel in Dublin’s Silicon Docks, are planning to spend c. €10m upgrading and expanding the hotel. The owners are proposing to add a new floor which will contain c. 30 bedrooms, which would increase the total number of rooms to c. 217, whilst also upgrading the rooftop bar. Brehon and Midwest acquired the shell of the hotel and 84 adjoining apartments for c. €30m in 2011, before investing a further c. €20m to complete the development. The 84 apartments were sold to I-RES REIT for €50.1m in 2014. The Sunday Times, 19th March
Athlone Springs Hotel: CBRE is guiding over €3.5m for the 68 bedroom, four-star Athlone Springs Hotel in Co. Roscommon. The hotel is being offered for sale by private treaty on the instructions of Grant Thornton in conjunction with the owner operators. The hotel was opened in 2007 and is a well-established and successful business, located just off the M6 Dublin-to-Galway motorway and close to Athlone town centre. The Irish Independent, 16th March
The Strand Hotel: The Strand Hotel in Bray, Co. Wicklow, which was built by Oscar Wilde’s parents and then inherited by the playwright, has been put on the market by Cushman & Wakefield with a guide price of €2.2m. The hotel, which was originally a seafront house built in c. 1850, extends to 8,600 sq. ft. and includes 10 bedrooms located on the two upper floors. The hotel was recently renovated in a contemporary style and comes to the market with vacant possession. The Irish Times, 15th March
RESIDENTIAL / LAND
Shelbourne Plaza: Knight Frank is guiding c. €18.5m for 52 apartments in the Shelbourne Plaza complex on Ringsend Road near Dublin’s Silicon Docks. The apartments are all being sold with vacant possession, allowing the new owners to capitalise on exceptionally strong occupier demand in the area, while each apartment comes with a parking space. The apartments comprise six one-beds, 42 two-beds and four four-beds and all have been finished to a high standard. They have previously been leased to a company providing short term accommodation, and there is an option for the new owner to continue with this arrangement (with two-beds renting for €850 – €1,000 per week), or else opt to lease the properties on standard residential tenancies (two-beds in the area generally rent for c. €2,300 per month). The Irish Times, 15th March
Westpoint Westport: Joint agents Savills and Tuohy O’Toole are guiding €8.5m for Westpoint, a mixed use project in Co. Mayo being sold on the instruction of the receiver, Grant Thornton. The asking price reflects a gross yield of c. 10.6%. The scheme is located beside the railway station in Westport and contains 87 apartments across three blocks (12 one-beds; 61 two-beds and 14 three-beds) and a retail element with seven commercial units and an anchor Tesco store (which is not included in the sale). All but one of the 87 apartments and two of the seven commercial units are let, producing an annual rent roll of c. €940k p.a. The selling agent has advised that there is potential to grow the rental income through asset management opportunities. The Irish Times, 15th March
Beacon South Quarter Defects: Apartment owners at the Beacon South Quarter apartment complex in Sandyford, south Dublin, have voted by an almost two-thirds majority to pay over €10m to fix fire safety and other structural defects in the complex. The vote followed a warning by Dublin Fire Brigade that owners could face legal action if they failed to complete fire safety works in their homes. Owners of the 880 apartments will have to pay between €7.5k and €15k each to fix the safety defects in the complex. Property investment company I-RES REIT owns 25% of the complex, and will therefore have to pay c. €2.7m. Owners in blocks A, B1, C and D are being asked to pay €9.1m into a sinking fund for fire remedial works, while residents in blocks A and D are being asked to pay in excess of €1m in relation to water damage. The Irish Times, 16th March
Kingswood Business Park: CBRE is guiding €2.5m for c. 12 acres of development land located at Kingswood Business Park in Dublin 22. The site will also be offered for sale in two smaller lots. The site previously had planning permission for the development of light industrial units, a service station and a car testing facility. The Irish Times, 15th March
Housing Completions: New figures from the Department of Housing show that based on electricity connections, the number of new homes completed in Ireland in January 2017 was c. 1,244. For the 12 months ending January 2017, c. 15,256 units were completed, a level not reached since 2010. The number of new housing starts in January 2017 was also positive at 910, a 45% increase year-on-year. The Irish Times, 21st March
North Docklands Development: Remcoll Capital Ltd has sought planning permission from Dublin City Council to develop 60 apartments on Shamrock Place in the North Dublin Docklands. The application seeks permission to demolish the existing Leech Papers factory and replace it with a six-storey over-basement property. The apartments will consist of 12 one-beds and 48 two-bed apartments. Paul Collins and Melanie McGarry control Remcoll. NAMA Wine Lake, 19th March
Glasnevin Development: LDC Developments Ltd has applied to Dublin City Council to construct 69 new apartments in two five-storey blocks on a site in Glasnevin in north Dublin city. The new apartments will consist of 19 one-beds, 32 two-beds, 15 three-beds and three studio apartments. Margaret and Louise Scully control LDC. NAMA Wine Lake, 19th March
OTHER
Allsop Auction: More than 230 properties with a combined value of over €38m on reserve are due to be offered for sale at an upcoming Allsop’s online auction on 5th April. The latest auction follows on from a similar event in February where 90% of the lots were sold at an average of 53% above reserve prices. The auction will contain more than 130 residential properties which have a combined total of c. €17m, while a substantial number of commercial properties will also be going under the hammer. The Irish Independent, 20th March
National Forensics Hospital: The Irish Independent reports that the HSE has selected Spanish construction giant OHL as the preferred bidder for a c. €125m contract to build the new National Forensics Hospital in North Dublin. The company will partner with Irish builder JJ Rhatigan on the project. The HSE has advised that contracts for the deal have not yet been signed, but they have confirmed that the OHL / Rhatigan proposal has been identified as the preferred bidder. The Irish Independent, 20th March
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