22nd June (Issue 302)
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.
INDUSTRIAL
Fonthill Business Park, Dublin 22 DCC subsidiary, Exertis Ireland, has agreed terms for a new headquarter facility at Fonthill Business Park. The deal will see the assignment of the lease on Unit 21 on behalf of Healthcare 21 following its decision to relocate to a new warehouse off the Naas Road. While the lease on Exertis Ireland’s new premises has just over two years to go to expiry, the company will have the right to apply to renew it. In making the move to Fonthill, Exertis will benefit from a rent that is well below current market levels at €650,000 per annum. The figure equates to just €7.53 per sq. ft for two years. Unit 21 comprises a modern detached premise of 86,252 sq. ft on a site of 1.65 hectares (4.07 acres). The unit’s 10m-high warehouse extends to 52,679 sq. ft with an additional 3,638 sq. ft of sub-mezzanine space. The Irish Times, 16th June
M50 Business Park With Exertis Ireland’s move to Fonthill now imminent, its current office and logistics facility at the M50 Business Park in Ballymount, Dublin 12 is being offered to the market by FJ Frisby & Associates at a guide price of €9 million. The unit comprises 4,569 sq. m, including 24,000sq ft of office space, on a 1.32-hectare (3.3 acre) site with parking for 184 cars. The property comes for sale with full planning permission for the construction of a new 13,700 sq. ft warehouse extension with an ancillary trading area, offices, staff site entrance, and the reconfiguration of the existing car park. The Irish Times, 16th June
HOTEL / LEISURE
Glanmire, Cork Planners have given the go-ahead for the €6m expansion of the Vienna Woods Country House Hotel. The expansion, which will add 42 bedrooms to the existing 45, will be the second major investment in the hotel, which has already undergone a €5m upgrade since 2006. There are also plans to add a spa, as well as a 25-seat cinema, a virtual golf facility, and a cardio workout/gym area. The extension will not interfere with the original house, a listed building dating back to 1756. Vienna Woods Country House Hotel, on 22 acres of woodland in Glanmire, is a 15-minute drive from Cork City centre. The Irish Examiner, 17th June
Courtown, Co Wexford While the price paid by Active Tribe for the Courtown Adventure & Leisure Centre has not been disclosed, The Irish Times understands the complex changed hands for in excess of €1 million. The sale of the property was handled by agent JLL on behalf of Neil Hughes and Conor Noone of Baker Tilly. The Courtown facility comprises a wide range of amenities, including a 25m indoor swimming pool, a spa pool, a 65m water slide, gym, two high rope courses, a climbing wall, dual zip wires and a forest walk. The complex also incorporates a standalone seal visitor and rehabilitation centre, which is operated under licence by Seal Rescue Ireland (licensee not affected). The sale of the property also included a 53-acre land holding, which contains lands zoned “commercial leisure”, “open space and amenity” and “natural amenity” under the Courtown and Riverchapel Local Area Plan. The Irish Times, 16th June
RETAIL
Dundrum, Dublin Conversion of the old Dundrum Shopping Centre lands from retail to a mainly residential development has been copper fastened by two recent moves by the owners of Dundrum Retail Limited Partnership (DRLP), the Business Post reports. The redevelopment project is a joint venture between Hammerson and Allianz. A Hammerson spokesperson told the paper it expected to undertake a pre-application Strategic Housing Development submission to An Bord Pleanála within the next six months with a full application to follow. In advance of that, DRLP has requested DLRCC to amend its draft development plan in relation to the site of the old shopping centre. It requested that the plan says the redevelopment would be “predominantly” residential. The Business Post, 20th June
MIXED USE
Montague Street, Dublin 2 An investment property with ground floor retail and five overhead apartments in Dublin city centre is for sale with a €1.9 million guide price. All five apartments are vacant, as is one of its two retail units. Located at 4 and 4A Montague Street, the four-storey terraced property is positioned on a route linking Wexford Street and Camden Street with Harcourt Street. Selling agent Eamonn Maguire estimates that the 4,100 sq. ft building could generate open-market rents totalling €166,000 pa. At ground level a 700 sq. ft fully fitted restaurant trades as Café Bliss. The adjoining 390 sq. ft retail unit had been occupied as Jack’s Barbers. At first- and second-floor levels there are four one-bedroom apartments ranging in size from 476 sq. ft to 585 sq. ft. At third-floor level is a two-bedroom 935 sq. ft penthouse. The Irish Independent, 17th June
Malahide, Co. Dublin Colliers is guiding a price of €2.2 million for a fully let investment opportunity in the sought-after coastal town. Numbers 5 and 6 St James’s Terrace (8,911 sq. ft) are let to 16 separate tenants at a passing rent of €133,920 per annum. The tenant mix includes Jaipur Restaurant and Natural Organic. No 5 St James’s Terrace includes a self-contained restaurant in the basement and a hairdresser on the ground floor. The basement and ground floor of 6 St James’s Terrace comprises individual office suites, and a gym. The first and second floors of the two buildings are interlinking and are laid out in a mix of individual office suites and consultation rooms. While the property is currently in office use mostly, the agent says it could easily lend itself to conversion for hotel or residential use, subject to planning permission. The property overlooks Malahide’s beach, yacht and tennis club and is situated within a short walk of a host of local amenities. The Irish Times, 16th June
OFFICE
Park West, Dublin 12 QRE Real Estate Advisers is handling the sale of Block 17 in the Park West Business Campus in Dublin 12, for which it is seeking €3.5 million. The building is let in its entirety to Petrogas Group trading as Applegreen and serves as the global headquarters for the publicly listed Irish service station operator. Applegreen occupies Block 17 on the basis of a 20-year and one-month lease from August 2007 at an annual rent of €352,540, with a break option in January 2024 subject to six months’ prior written notice and a six-month rental and service charge penalty. Block 17 comprises a modern three-storey office building of some 27,340 sq. ft. The property provides a mixture of open plan and cellular office space and comes with 36 surface car spaces. The guide price reflects a net initial yield of 9.16 per cent based on a contracted rent of €352,540 pa. The Business Post, 20th June
Foley Street, Dublin, 1 Agent Colliers is guiding a price of €2.55 million for a fully let office investment in Dublin city centre. The sale of the third floor of Ulysses House (6,740 sq. ft) on Foley Street offers the prospective purchaser the opportunity to secure long-term rental income from a strong tenant in a well-established location. Ulysses House is within a short walk of the IFSC, the north docklands, Henry Street and O’Connell Street. The subject property is fully let to Moore, a leading accountancy and advisory services firm, on a 15-year lease from January 2016, at a passing rent of €182,500 per annum. The guide price reflects a net initial yield of 6.5 per cent. The Irish Examiner, 16th June
Arts Centre, Dublin 2 The sale of the former City Arts Centre on Dublin’s City Quay has seen strong interest from a number of the country’s biggest developers. Having been brought to the market at a guide price of €35 million, the property which has lain dormant for the past 18 years is understood to have attracted bids of up to €40 million. RQTwo, RGRE, Marlet Property Group and Hines are understood to be among the parties to have submitted offers for the last remaining waterfront site in the city’s docklands. While little has happened with the property since it was last sold in 2003 for €4.2 million, the area surrounding the building has been transformed. A feasibility study drawn up by RKD Architects in preparation for the site’s sale by Savills suggests it could accommodate a 145,000sq ft (net) office development, subject to planning permission. The Irish Times, 16th June
Charlemont House, Dublin 2 The four-storey office building of 9,294 sq. ft is being offered to the market on behalf of Kennedy Wilson at a guide price of €6.5 million. Charlemont House comes for sale fully let to Glennon Insurance at a contracted rent of €367,210 per annum. The firm signed a new 10-year lease with no break option from July 2020. Charlemont House occupies a high-profile position overlooking Dublin’s Grand Canal and immediately adjacent to the Luas green line stop at Charlemont. The area is home already to a number of high-profile corporates while Amazon is due to take occupation shortly of a new 170,000sq ft campus at Charlemont Square. The Irish Times, 16th June
Beech Hill Office Park, Clonskeagh The 42,000 sq. ft property, which had until recently served as the Irish headquarters of global telecommunications company, Ericsson, is being offered to the market on behalf of the Layden Group at a guide price of €10 million. Joint selling agents Knight Frank and JLL believe it will hold a particular appeal to those parties seeking a value-add opportunity as the prospective purchaser will also have the benefit of a speculative development site immediately adjacent to the existing property. The current owner has secured planning permission for a five-storey, 34,250sq ft office development. Boole House itself comprises efficient floor plates of 14,000sq ft that could be further sub-divided, if required. There are also 89 car parking spaces available with the building. The Irish Times, 16th June
RESIDENTIAL / LAND
House Prices Irish house price inflation rose for the 4th consecutive month in April to 4.5% YoY according to official CSO data released last week. This is the fastest rate of growth since January 2019 and house prices now sit 14% below their 2007 peak. Prices grew 0.8% mom both in and outside of Dublin, with annual house price growth reaching 3.5% and 5.3%, respectively. There has, however, been a recent increase in price momentum in the Dublin market, with annualised growth in the past three months rising to c.10%. The robust demand trends seen in April’s mortgage approval data leads Goodbody’s Economics team forecast 5% house price inflation for 2021. Goodbody’s also note that there is some evidence of increased mobility due to new working-from-home trends. The strongest growth in home sales in the year to date is in the Midlands (+32%), while Dublin (-16%) continues to lag in both the new (-42%) and second-hand market (-5%). The fall in new home sales may be a reflection of a decline in new supply in Dublin. Central Statistics Office & Goodbody Stockbrokers, 16th June
Investment Funds Purchase of New Homes New information published by the CSO sheds more light on who is purchasing new homes. In 2020, there were 11,519 new homes purchased (-12% YoY). Just 61% of these new homes were purchased by households, with the remaining 39% purchased by “non-households”. This is up from 34% in 2019 and the highest share since the data began in 2010. Crucially, the public sector (Approved Housing Bodies (AHBs), Local Authorities etc) were the biggest non-household purchasers of new homes last year, buying 21% of the new homes sold. The finance and real estate sectors bought 10% of new homes combined. The narrative that funds are buying up vast swathes of new housing is incorrect; the inability of the government to ramp up its own building programme sufficiently is leading to a situation where it is competing for homes with the private sector. Central Statistics Office & Goodbody Stockbrokers, 16th June
Goatstown, Dublin 14 An Bord Pleanála has turned down planning permission for the eight-storey €186 million development in Goatstown. In its ruling, An Bord Pleanála concluded that the 299 unit proposal would result in a visually dominant and over-bearing form of development. The apartment scheme on the 4.6-acre site was made up of four apartment blocks ranging from five to eight storeys in height and proposed to retain the Goat bar and grill. In total, 148 submissions were lodged with the board, including ones from several residents’ associations in the area vehemently opposed to the scheme. As part of the plan, Mr Chawke’s firm put an indicative price tag of €16.4m on 30 apartments it was proposing to sell to the county council to comply with social housing requirements. The company was planning to sell 17 one-bedroom and 13 two-bedroom apartments to the council and put an indicative price range of €408,237 to €595,028 on the one-bedroom apartments. The indicative cost of the two-bedroom apartments was €676,169 to €768,297. The Irish Independent, June 18th
Planning Crisis The ‘fast track’ planning system for housing is in crisis with “an immediate and lengthy timing risk” to plans for more than 60,000 housing units. Several planning and construction sources told the Sunday Independent that because permission for so many new homes has been overturned by the High Court, planners have downed tools and strategic housing developments (SHDs) has come to a complete halt. Plans for thousands of homes due to enter the SHD planning system have been “put on ice” because of the growing logjam, said sources. Planning permission for 7,500 homes has been overturned by High Court judicial reviews, with 6,500 awaiting reviews. Ominously, a recent referral to the European Commission, puts at risk up to 64,000 units that are at various stages of planning. The article quotes an analysis by Tom Philips Associates that has calculated that 92% of judicial reviews into Strategic Housing Developments (SHDs) since 2018 have resulted in plans being quashed. Sunday Independent, June 20th
OTHER
Merrion Road, Dublin 4 The property developer Bartra has won approval to build a €25 million co-living scheme on Merrion Road in Ballsbridge, Dublin 4. An Bord Pleanala has gone against its inspector’s report to permit the construction of the development, which will comprise 99 bed spaces in a three- to five-storey building. Bartra originally applied to Dublin city council for 111 bed spaces on the half-acre site but the local authority granted permission for 93. There were 38 objections to that application. Bartra must ditch five of its bed spaces to enlarge the communal kitchens/dining rooms. The development must also be owned and operated by an “institutional entity” for a minimum period of 15 years. Any move after that to sell units individually will need planning permission. The Sunday Times, 20th June
If you have an article which you would like to have considered for inclusion in our next weekly report, please contact us at info@origincapital.ie