21st November (Issue 424)
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.
HOSPITALITY
Kenmare, Co Kerry The Park Hotel in Kenmare has been purchased by Irish businessman Bryan Meehan, co-founder of the Nude skincare brand, for an undisclosed sum. Brothers Francis and John Brennan had advertised the 46-bedroom hotel and its sister hotel, the four star Lansdowne, for sale with a combined price of €20.5m. It is understood that the agreed sale does not include the Lansdowne. During the pandemic the hotel’s revenue dropped from €5m to €2m, but the brothers have managed to lead it back to profitability. In 2022, revenue rose to €5.5m, resulting in a profit of €1.15m. The Business Post, 16th November
Dawson Street, Dublin 2 A group of private Irish investors is closing in on the purchase of the Dawson Hotel in Dublin City Centre. The consortium is understood to have agreed a deal to acquire the property at 35/36 Dawson Street for approx. €16m. The figure represents a 9% discount on the €17.5m price CBRE had been guiding when the property was brought to the market on behalf of its current owner, Tetrarch Capital, last January. The Irish Times, 15th November
Center Parcs Brookfield has put a halt to its attempt to sell leisure business Center Parcs. Although a strategic review is still officially ongoing, tools have been downed on the process, in which Brookfield had been aiming to achieve a £5bn exit. The top bid for Center Parcs is understood to have been registered at approx. £3.7bn, along with further add-ons subject to performance. Center Parcs currently operates at an occupancy level of approx. 98%, with approx. 60% of its visitors being repeat customers. Center Parcs has approx. £2.5bn of debt secured against it, with Brookfield having undertaken a partial £648m refinance in April in two separate bond issuances priced at 5.9% and 6.1%. Brookfield bought Center Parcs from Blackstone in 2015 for £2.4bn. It owns six giant parks of which five are in the UK and one in Longford, which was developed under Brookfield’s ownership. React News, 16th November
Sandyford, Dublin 18 Sigmoid has signed a 10-year lease for 3,194 sq. ft fronting on to Beacon South Quarter Square for Dublin’s first indoor golf centre, which will be known as Sigmoid HQ. The development of the facility comes on foot of the approval by Dún Laoghaire Rathdown County Council of a planning application for a change of use of the unit from retail to leisure. Sigmoid HQ operates an indoor golf centre that features a number of bespoke indoor golf simulators equipped with TrackMan technology. The space also includes an indoor putting green delivered to golf-course standards and coffee bar. Sigmoid, which works with a number of professional golfers on the LPGA and Ladies European tours, will offer customers a range of services including golf simulators for personal use, golf classes and custom golf club fittings for golfers of all levels. The Irish Times, 15th November
RETAIL
Grafton Street, Dublin 2 Colliers has launched the sale of No. 55 Grafton Street in Dublin, comprising a ground floor and basement commercial building. The unit was recently let to Claddagh Jewellers, an Irish-owned family business operating since 1967. No. 55 is located at the St Stephen’s Green end of Grafton Street, close to the Disney store, Lifestyle Sports and Benetton. The store extends to 690 sq. ft over two levels and is let under a ten-year lease from July 2023. It is subject to a reserved rent of €150k pa exclusive. Colliers is seeking offers in excess of €2.5m (NIY 5.46%). The Business Post, 18th November
St Patrick Street, Cork Penneys has confirmed that it was “never tempted to look at Debenhams” when planning a €60m redevelopment of its flagship store on Cork City’s main street, which has just been cleared by planners. By the time Debenhams, formerly Roches Stores, became vacant in April 2020, Penneys had already spent the bones of 10 years and tens of millions of euros assembling almost an entire block on St Patrick Street. Having completed the site assembly, with the help of O’Flynn Construction, it lodged plans to expand its retail space by approx. 50% in August 2021. Cork City Council consented to the plan, but it was subsequently appealed to An Bord Pleanála by the owner of a premises on Cook Street, who objected to the inclusion of Elbow Lane in the redevelopment. The Lane traverses the site and had been used for servicing of commercial units and refuse storage. The board ruled in Penneys favour, a move business leaders have hailed as “excellent news for the city”. The Irish Examiner, 18th November
OFFICE
Hibernia Real Estate Refinance Brookfield has refinanced part of the Hibernia Real Estate portfolio it bought last year in a €1.1bn deal to take the former stock market-listed REIT private. The refinancing of €411m of the Hibernia debt comes amid a significant downturn in the commercial property market, but it is understood will support further development projects. Hibernia said the transaction included the transfer for certain assets within the group. Brookfield’s 2022 takeover was backed by €930m of debt raised from global banks Goldman Sachs, JP Morgan and Société Générale. The deal struck by Brookfield represented a near 36% premium to the closing price of Hibernia’s shares. Shares in the Irish group had traded at a discount to net tangible assets for six years before the sale. The Irish Independent, 21st November
Carrickmines Park, South Dublin The penthouse on the third floor of the Iveagh Building at Carrickmines Park is guiding at a price of €2.9m (€223 psf) through Colliers. The property comprises 12,994 sq. ft of fully fitted open-plan office space, meeting rooms and a boardroom. The floor is complemented by two large outdoor terraces and 27 designated car-parking spaces at basement level. The Irish Times, 15th November
Britain Quay, Dublin 2 Following on from the recent letting of the entire 11,217 sq. ft first floor at Central Quay in Dublin South Docklands to Millenium Capital Partners, Hibernia Real Estate Group has now secured Peninsula Petroleum as tenants for part of the building’s second floor. The company has agreed to take 3,845 sq. ft of space at the building. Both tenants are understood to have committed to a rent of approx. €54 per sq. ft. CBRE is now marketing the remaining part of the second floor extending to 7,347 sq. ft which is fully fitted to a CAT A specification and is available immediately. The Irish Times, 15th November
Northumberland Road, Dublin 4 No. 80 Northumberland Road, the headquarters of MS Ireland, is being offered to the market with the benefit of vacant possession by CBRE at a guide price of €2.1m. The subject property comprises a three-storey over-basement period building of 4,399 sq. ft (€477 psf). While the property is in office use at present, it offers the potential for conversion to residential use subject to planning permission being obtained. The property comes with 10 car-parking spaces and is accessed from both Northumberland Road and from an entrance to the rear of Lansdowne Park. The Irish Times, 15th November
INDUSTRIAL / LOGISTICS
Logistics Hubs, North Dublin Irish property investor and developer Iput could invest in excess of €250m in two new huge Dublin logistics hubs. Iput, already the largest owner of modern logistics assets in Dublin, recently submitted plans to Fingal County Council for its Nexus 2 logistics development, which would consist of 12 logistics and warehousing buildings at a 118-acre site at Killamonan near the Cherryhound Interchange of the M2 in North Dublin. It has already received planning permission for its Nexus 1 project nearby, which would consist of five separate logistics facilities across a 64-acre site. The Irish Independent, 19th November
Malahide Road Industrial Park, North Dublin Pan-European investor and asset manager, M7 Real Estate, is seeking an occupier for the former Bunzl premises at Malahide Road Industrial Park. Now known as Newtown Hub, the 74,540 sq. ft warehouse facility is being offered to the market following the completion of a comprehensive repositioning and upgrade programme by Savills at a quoting rent of €895k pa (€12 per sq. ft). M7 acquired the property in near-derelict condition from Hibernia Real Estate Group in 2022 for €6.25m. The Irish Times, 15th November
MIXED-USE
Old Airport Road, Co Dublin Colliers is guiding a price of €2.75m for a 1.8-acre site zoned for employment use immediately adjacent to Dublin Airport. Located on the Old Airport Road and to the west of the Swords Road, the subject property is occupied by two tenants and generating an overall rental income of €151k pa. Emo Oil Limited occupies a portion of the site under a 10-year lease, which expires on March 31st, 2026 and is subject to a passing rent of €65k pa. The site is an unmanned filling station operated by Certa and covers a portion of roadside to the front of the property. The remainder of the land is leased to Value Van Rentals Limited under a 10-year lease expiring on December 31st 2029 with a current passing rent of €86k pa, increasing to €92k pa from January 1st, 2024. The current combined passing rent is €151k, which is subject to an increase to €157k in 2024. The Irish Times, 15th November
STUDENT ACCOMMODATION
Irish Student Accommodation Report According to Cushman & Wakefield, for the 2022/23 academic year, there were approx. 199,000 full-time students, reflecting a 13.5% increase since 2017. Dublin leads in bed space supply with 19,500 beds, followed by Cork (7,600), Limerick (6,200), and Galway (5,300). 66% of beds are in private ownership with the remaining beds being University owned.
Since 2016, the number of beds in Dublin has almost doubled from just under 10,000 to 19,500, however the rate of growth in new beds has fallen from a high of 20% in 2018 to just 1%, as the pace of new deliveries has slowed significantly amidst headwinds of rising development costs and issues around debt funding. There are just under 1,900 bed spaces currently under construction across six developments In Ireland. Cork accounts for 702 bed spaces over 2 developments, with 513 bed spaces under construction in Dublin spread across 3 developments, and 345 bed spaces in Galway in 1 development. A further 189 and 115 beds are under construction in Dundalk and Maynooth, respectively. Cushman & Wakefield Report, 16th November
RESIDENTIAL / DEVELOPMENT
Blackrock, South Co Dublin Oval Target, a company controlled by Patrick McKillen Jr and Matt Ryan, is in talks to sell lands at Temple Hill in Blackrock, Co Dublin, at a sum substantially below its purchase price. Oval Target paid €30m for the 9.86-acre holding, formerly owned by the Daughters of Charity of St Vincent de Paul, in 2017. It is understood that Greystar, a US investment fund, will pay approx. €25m for the site, which has planning permission for the development of 291 one, two and three-bedroom apartments. The last filed accounts for Oval Target, to the end of 2019, put amounts owed to senior lender Greenoak Real Estate at €22.4m, with a further €14.3m due on shareholder and “other loans.” Oval sought to increase its planning to 446 units but the plan is subject to judicial review proceedings. The company put the lands on the market for €45m in early 2020 only for any sale to be derailed by the pandemic. The Sunday Times, 19th November
Montrose, Dublin 4 The current value of RTÉ’s Montrose campus is approx. €100m, significantly below the value per acre in 2017 when the broadcaster last sold part of its south Dublin headquarters. In its new strategic vision, the broadcaster has confirmed that Savills have commenced a high-level assessment of the site, which it said will take some time to conclude. However, the commercial real estate market faces several challenges at the moment and any sale of the Donnybrook site is further complicated due to a number of protected buildings on the campus, the broadcaster said. In 2017, RTÉ sold just under nine acres of land at Montrose to Cairn Homes for €107.5m. The Business Post, 14th November
Lone Star, the US private equity fund, is examining options for its substantial investment in Quintain Ireland as the housebuilder looks to double its ¬construction output by 2026. The Sunday Times understands that Lone Star, which set up Quintain Ireland in 2019, could bring in another equity ¬or funding partner or sell part of its existing interest to another entity. The Sunday Times, 19th November
Start Mortgages, owned by private equity giant Lone Star, is to quit the Irish market. Start manages over 11,000 mortgages with an estimated value of approx. €2.2bn. Lone Star has reached an agreement to transfer the servicing rights of Start’s mortgage book to Mars Capital. The value of the deal between Mars and Start has not been disclosed. Lone Star acquired Start in 2014 as part of a bigger portfolio of assets. The Business Post, 15th November
The Peter McVerry Trust has been provided with a sum of emergency funds by the Dublin Region Homeless Executive (DRHE). Following revelations in August that the Peter McVerry Trust had encountered “potential financial issues”, the charity sought more than €5m in emergency funding. The Business Post understands a small portion of this amount has been released to the homelessness services and housing charity. Discussions surrounding a wider bailout for the organisation are still underway, with the matter being reviewed by an oversight group established by the Department of Housing. A spokesperson for the DRHE has said that the charity has now been provided with a sum of funding to allow for the continuity of services. They said the trust has been provided with “sufficient funding” to ensure that services will not be interrupted. The DRHE did confirm how much funding has been released. The Business Post, 13th November
Croí Cónaithe Scheme The state has agreed a deal with Glenveagh Homes to part-fund construction of 274 private market apartments in Cork city, the largest scheme of its kind in the city for more than a decade. Further deals have been struck with Cairn Homes and Park Developments, the development firms, to subsidise construction of further apartments for the private market in Cork and Dublin. The three apartment schemes, which contain 395 units in total, will be the first projects to be funded through the Croí Cónaithe Cities scheme, which is being managed by the Housing Agency. The largest project being part-funded by the state will be Blackrock Villas, Blackrock, Co. Cork. Glenveagh secured planning permission for the 274 apartments on the site in 2019, but construction did not commence. Upon completion, there will be a mix of studio, one-, two- and three-bed apartments for sale in Blackrock Villas on the open market at subsidised prices. A further 68 owner-occupier apartments being developed by Cairn Homes on Carr’s Hill Carrigaline Road in Douglas, Co. Cork, will also be subsidised through Croí Cónaithe Cities. In Dublin, the Housing Agency has also agreed to subsidise the delivery of 53 owner-occupier apartments being developed by Park Developments at Woodward Court, Glencairn, Murphystown Way, Dublin 18. The Business Post, 17th November
Residential Sector House prices across the State rose at an annual rate of 1.4% in September, marginally up on the previous month, but still anchored near a three-year low as higher interest rates dampened buying activity. The latest residential property price index, compiled by the CSO, shows that prices in Dublin continued to decline, however. Values in the capital fell at an annual rate of 1.9%, the sharpest rate of drop since 2012 when the market was still mired in the financial crisis. Prices outside Dublin rose at an annual rate of 4%. The State’s property market has slowed significantly since a pandemic-driven surge in 2020 and 2021. The softening is perhaps best illustrated by a slowdown in transactions. The latest CSO data indicates 4,255 house purchases were filed with Revenue in September. This represents a 7.2% decrease compared with the 4,583 purchases in September 2022 and an 8.3% decline compared with the 4,640 purchases in August this year. The total value of transactions filed in September was €1.6bn. The Irish Times, 15th November
Dangan Castle, Co Meath Having only recently agreed an €11m deal to acquire the nearby Dowth Hall and its vast 552-acre estate for use as a new national park, the State may well be among the parties to run the rule over the sale of Dangan Castle in Co Meath. Nestling in the midst of 236 acres of lands comprising tillage, grassland and forestry, Dangan Castle is being offered to the market by Knight Frank at a guide price of €3.1m. The castle stands on an elevated site overlooking the estate, which is laid out currently in three sections, with 50 acres of grassland, 115 acres of tillage and 70 acres of forestry. The Irish Times, 15th November
Vacant Site Levy An Bord Pleanála has refused an appeal to have the former Smurfit paper mill in Clonskeagh owned by Bain Capital removed from Dublin City Council’s vacant site levy list. The appeal was brought by Harley Issuer DAC, whose only shareholder is SMT Trustees (Ireland) Limited. SMT Trustees act for and on behalf of Bain Capital Credit Global ICAV, in turn acting for and on behalf of its Sub Fund Bain Capital Credit CCC Fund. The annual levy is charged at 7% of the market valuation of the property. According to the council’s latest register, it values the site in question at €10m. This would put the estimated annual levy take at €700k. The 3.21-acre former Smurfit paper mill site was acquired in 2005 by developer Gerry Gannon who then sold it on to the American private investment firm in early 2021 with planning permission in place for 126 apartments in multiple blocks. According to quotes from Knight Frank at the time, the site was valued somewhere between €18 and €20m. An additional planning application was submitted in October 2021 by Harley Issuer for an aparthotel in addition to the apartments. This was subsequently withdrawn in September 2022. The Currency, 20th November
OTHER
Kilternan, Co Dublin The Comer Group has objected to a demand from Dún Laoghaire-Rathdown Co Council for a public road to be installed through its land near the Kilternan hotel development. The company acquired the property in 2014 for €7m. The Comers secured planning permission to develop an equine training facility on the lands in 2016. Dún Laoghaire-Rathdown Co Council has warned Nijinsky Property Company Limited, a firm owned by the Comer brothers, about unauthorised construction at its planned ‘equine centre of excellence’ on the lands. Planners at Dún Laoghaire-Rathdown Co Council have told the Comer Group it has “responsibility in relation to the public right of way” in the area and “it appears that accessibility is compromised” following the construction by the company in the area. The Comer Group has lodged an appeal with An Bord Pleanála in a bid to get the public route requirement struck out. A decision is expected in March 2024. The Business Post, 19th November
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