22nd September (Issue 13)
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
National Portfolio: The Irish Times understands that Davidson Kempner, alongside minority partner Alanis Capital, is in pole position in the race to acquire Bank of Ireland’s National Portfolio. Davidson Kempner is believed to have bid in excess of €170m for the portfolio, for which JLL and Savills were inviting offers above €162m. The portfolio is producing gross income of €12.2m p.a. and consists of five retail parks – Nutgrove Retail Park, Letterkenny Retail Park, Sligo Retail Park, Tullamore Retail Park and Deerpark Shopping Centre. The Irish Times, 16th September
Project Arrow: The Sunday Times reports that a second bidder from a shortlist of just three is considering pulling out of Project Arrow. There are fears that Apollo Global Management may not submit a final round bid for the €7.2bn portfolio. Two weeks ago, a joint bid between Goldman Sachs and CarVal pulled out of the bidding process. If Apollo exits the process, then just one firm, Cerberus Capital Management, will be left in the auction. The Sunday Times, 20th September 2015
Project Jewel: The Sunday Times also understands that Davidson Kempner, one of five bidders for NAMA’s Project Jewel (which includes loans secured on Dundrum Town Centre), may withdraw from the bidding process. Bids for Project Jewel, which are expected to exceed €1.5bn, are due to be submitted by the end of this month, and competition for the prized assets is expected to be keen. The Sunday Times, 20th September 2015
Michael O’Flynn: Michael O’Flynn is in the process of finalising a deal with a multibillion dollar US private equity house that will end his relationship with Blackstone. The SBP reports that O’Flynn is in negotiations with Manhattan based Avenue Capital, a US fund which controls almost $14 billion in assets worldwide. AIB is understood to be providing the senior debt for the deal. Blackstone bought €1.8 billion of O’Flynn’s debt from NAMA for c. €1.1 billion in 2014. As part of the deal, O’Flynn and his backers will purchase the undeveloped pipeline of Irish assets from Blackstone subsidiary Carbon Finance. The Sunday Business Post, 20th September
OFFICE
The Exo: Receivers from Grant Thornton have submitted a planning application to construct a 73m tall office block (known as The Exo) at the Point Village in Dublin 1. The Exo is to be 17 storeys tall with the capacity to accommodate 2,000 workers. The €80m project would be taller than any office block in the Docklands at present, including Google’s Montevetro building which stands at 67m. NAMA are to finance the development, while CBRE and Savills have been appointed as joint letting agents. The Irish Times, 15th September
Jefferson House, Donnybrook: A 33 year old office building in Donnybrook is likely to undergo a major refurbishment after it is sold on behalf of a private investor. The five-storey over basement building extends to 19,374 sq. ft. and has 21 car parking spaces. It has been rented since it was built to Smurfit Services Ltd, now trading as Smurfit Kappa, under a lease which is due to expire in May 2017. Selling agent BNP Paribas are inviting offers of more than €7 million for the property. The Irish Times, 16th September
HOTEL
The Gresham Hotel: The Sunday Independent understands that the Gresham Hotel is expected to be put up for sale by NAMA next month. Windward Investments, which is led by Patrick Coyle (the general manager of the hotel), is set to partner with US hotel management company Pyramid to make a bid for the property. Pyramid purchased the Temple Bar Hotel earlier this year. Dalata, Kennedy Wilson and Tokyo Inn are other likely bidders for the hotel. The Sunday Independent, 20th September
RESIDENTIAL
Residential Planning Applications: New figures from the CSO show that when compared to Q2 2014, the number of planning applications approved in Q2 2015 increased by 87% (3,010 vs. 1,606 in Q2 2014). The number of applications approved for apartments rose by c. 227% in the same period (373 vs. 114 in Q2 2014). The increase in the number of apartments would indicate that there is to be a renewed focus on apartment building in the capital. The Irish Times, 17th September
IRES: One of Dublin’s biggest apartment owners, IRES, is planning further rent hikes. Rents increased by 10% – 15% in the first half of 2015 across IRES REIT’s 1,566 Dublin apartment portfolio. The company’s portfolio of apartments is spread across the city at high profile developments including Beacon South Quarter, Rockbrook, The Marker and Charlestown. The Sunday Business Post, 20th September
Adamstown: Ulster Bank is in the process of examining the sale of one of the largest areas of residential development land in Dublin. The bank is reviewing its position in relation to a massive land bank in Adamstown in west Dublin, with the potential market value understood to be in the region of €500m if brought to market. The bank has major exposure to the area through lending to Maplewood Development and Castlethorn Developments, and is examining whether it will be able to sell the loans and land as a single sale. The site is seen as a source of unlocking extra supply in the capital as it has Strategic Development Zone status allowing for the development of 8,000 units. The Sunday Business Post, 20th September
OTHER
Baggot Street Hospital: The HSE have appointed Savills to handle the sale of Baggot Street Hospital in Dublin 4. Although Savills have not quoted a guide price, it is believed that the hospital is valued at c. €14m. The hospital has a floor area in excess of 60,277 sq. ft., and the overall site measures c. 0.71 acres. Given the size and location of the asset, the buyer will likely seek to redevelop the property into either a hotel, residential units and/or office space. One of the conditions of the sale is that the buyer of the property must provide a new primary care centre for the area, either on the property or nearby. For the new care centre the HSE have offered to enter into a new long-term lease agreement at c. €18 psf. The Irish Times, 16th September
M1 Business Park: DTZ are guiding €6.15m for 157 acres of undeveloped land and 22.56 acres of an industrial development at the M1 Business Park near Balbriggan in Co. Dublin. Of the 157 acres of undeveloped land, only 16 acres do not carry any zoning. The 141 acres which contain zoning carry a mixture of commercial zonings, including high technology and research and development. The asset is in a strong location as it is only a short drive from Dublin airport and also has direct access to the Docklands through the port tunnel. The Irish Times, 17th September
The Comer Brothers: The Sunday Independent reports that Galway builders Luke and Brian Comer have purchased two development sites located north of Wembley Stadium in London. The sites span across 1,200 acres, and if rezoned could be worth between €8.4bn and €15bn. UK property prices are forecast to rise by up to 30pc in the next four years due to an acute shortage in London and Southern England, according to BNP Paribas. The Sunday Independent, 20th September
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