23rd August (Issue 361)
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.
OFFICE
Sir John Rogerson’s Quay, Dublin 2 TikTok has inked a deal for the Tropical Fruit Warehouse. The agreement will see the Chinese-owned social media platform take all 85,000 sq. ft. of office accommodation at the six-storey riverfront building. According to market sources, the company has committed to a long-term lease at a rental level of €60 per sq. ft. with the scheme’s developer and landlord, Iput Real Estate. When taken together with the 202,000 sq. ft. the company is set to occupy at the Sorting Office on Cardiff Lane, TikTok’s Irish operations now have an overall footprint of 287,000 sq. ft. Located at 30-32 Sir John Rogerson’s Quay, the Tropical Fruit Warehouse briefly comprises a six-storey office block developed within the structure of the last remaining original warehouse on the city’s quays. The Irish Times, 22nd August
RETAIL
O’Connell Street, Dublin 1 An investment property next door to the Clerys Quarter at 28 O’Connell Street, Dublin 1, is being offered for sale with a €3.5m guide price. The entire property is currently leased to Xenon Dental Services, trading as Smiles Dental, which is part of the British United Provident Association (BUPA) global health care group, at an annual rent of €160k. While this equates to a gross yield of 4.57%, its attractions as an investment include upward-only rent reviews, no break clauses on a lease with 19 years to run, as well as the financial strength of its tenant. With highly ornate ground-floor ceilings, the five-storey over basement Edwardian building extends to 4,666 sq. ft. It was originally designed as a bank. The Irish Independent, 18th August
INDUSTRIAL / LOGISTICS
Aerodrome Business Park, South-West Dublin Iron Mountain has inked an agreement with Irish property firm Iput Real Estate for the long-term lease of Unit Q at its Aerodrome Business Park in Dublin, Ireland. The US enterprise information management firm is set to occupy the newly built 162,000 sq. ft. facility, joining Life Style Sports, who has taken the 120,000 sq. ft. Unit G in 2021. Completed in July, Unit Q sits on a 7.8 acre site in the access-controlled park, and comprises a total of 13,265 sq. ft. of office space on three levels, along with 147,454 sq. ft. allocated for warehouse space. React News, 22nd August
HEALTHCARE / NURSING HOMES
Healthcare Portfolio, Ireland Developer Richard Barrett has sold a portfolio of four care homes to listed Belgian property group, Aedifica, in a €161m deal. The four properties – two Dublin nursing homes, Ireland’s largest step-down unit for patients leaving hospital and another nursing home currently in development – were owned by Bartra Healthcare. Loughshinny nursing home in Skerries, which opened in 2019, accommodates 125 people. Northwood nursing home in Santry, which has 121 beds and the Beaumont Lodge Health Service Executive transitional care unit in Artane, with 221 spaces, both opened in 2020. Clondalkin Lodge nursing home, which is currently under development, will offer 150 beds when it opens in the third quarter of next year. Bartra will continue to run the homes under long-term leases which, Aedifica says, will yield an initial net yield of c. 5%. It will also operate another Aedifica site in Crumlin. The Irish Times, 19th August
MIXED-USE
Stillorgan, South Dublin Kennedy Wilson has secured a €77m “green loan” from AIB to help fund the development of a large mixed-used development on the site of the former Stillorgan Leisureplex in south Dublin. The debt will be used to finance the development of 234 apartments, c. 19,913 sq. ft. of retail, restaurant and cafe space as well as resident amenities and a landscaped plaza at the Cornerstone scheme in Stillorgan on the site of the former Leisureplex. Kennedy Wilson bought the 2.5-acre site for €15m in 2016, a substantial reduction on the €65m which Johnny Ronan and Richard Barrett’s Treasury Holdings paid to acquire it in 2006. The Irish Times, 17th August
RESIDENTIAL / DEVELOPMENT
Donnybrook, Dublin 4 Plans for a 10-storey build-to-rent apartment scheme in Donnybrook has been given the green light by An Bord Pleanála. The development is earmarked for the site currently occupied by a Circle K filling station, opposite Donnybrook Stadium. The decision follows a revision by the developers, Red Rock Donnybrook Ltd, at the appeal stage to reduce the height of the development by two floors. The Irish Times, 17th August
The Crescent Building, Dublin 12 The cost of remediating fire-safety defects at a large Celtic Tiger-era apartment complex in west Dublin have tripled, rising from €5m to more than €15m. The Crescent Building in Dublin 12 comprises 10 blocks of 257 apartments and was built by a third-party contractor in 2003 as part of the larger Park West campus developed by Harcourt Developments. In June 2021, managing agent Keenan Property Management (KPM) – acting on behalf of the owners’ management company (OMC) – informed residents of the result of a fire-safety survey which found non-compliance with the fire-safety certificate in various parts of the building. The cost of remediating these issues was then believed to be c. €5m. However, residents were told recently that the cost had now risen to €15.9m, with the cost per apartment estimated at €68.5k. This cost includes a 30% contingency fund in the case of inflationary surge. The Irish Times, 19th August
Blackglen Road, South Dublin The environment and wildlife of south Dublin’s greenbelt is under threat from large-scale “urban-style” apartment developments, local residents and councillors say, following the upgrade of a rural road at the foot of the Dublin mountains. An application has already been submitted to An Bord Pleanála for a Strategic Housing Development (SHD) of just over 100 apartments and houses on the road, with a neighbouring SHD scheme of 400 apartments due to the submitted to the board this month. Heronbrook Properties has sought permission for 32 houses and 69 apartments in blocks up to four storeys tall on a site south of Blackglen Road, with An Bord Pleanála expected to issue a planning decision in the coming weeks. The Irish Times, 19th August
Newbridge, Co Kildare Applications will open on Monday afternoon for the latest cost-rental scheme, which will see housing association Tuath offer homes for rent in Co Kildare at up to 40% below market values. The 50 homes in Newbridge will be advertised on property website Daft.ie with rents of €1.13k for a two-bed and €1.3k for a three-bed home. Under the cost-rental system, rents are based on the cost of building, managing and maintaining the homes, and not market rates. Tenants also have long-term security, with leases running to several years available. The scheme is aimed at workers who earn too much to qualify for social housing supports but who cannot afford to buy or rent on the open market. It is open to households with a net income of up to €53k a year. The Irish Times, 22nd August
Howth Castle, Dublin 13 Plans for a retirement community and affordable housing on protected lands in the Dublin suburb of Howth have been set back following a council move to block rezoning. However, Tetrarch, the property investor that purchased 470 acres of land around Howth Castle in 2019, has commissioned market research on local demand for housing which it is now using in an attempt to win over local councillors. The company, which also plans to refurbish the castle and replace an existing hotel, is proposing 150 affordable homes — priced under €300k — for local residents via a housing agency alongside a retirement community across a total of 16.5 acres. The Irish Times, 20th August
Newtownmountkennedy, Co Wicklow An Bord Pleanála has granted planning permission to Dwyer Nolan for 179 new homes at Newtownmountkennedy in Co Wicklow. The appeals board has granted permission to the Dublin building firm for the 121 houses and 58 apartments despite Wicklow County Council recommending that the scheme be refused on a number of grounds. The developers are to sell 18 units to the council for social housing to comply with their Part V social housing obligations. The Irish Times, 22nd August
Affordable Housing, Ireland Clúid Housing, one of the biggest annual providers of affordable homes in the state, has warned top civil servants that its rate of housing delivery could grind to a halt by 2024. In a letter to the Housing for All investment workgroup, Brian O’Gorman, chief executive of Clúid, said many approved housing bodies (AHBs) “will have to reduce their delivery output to ensure financial stability and compliance” in the coming years. He added the manner in which AHBs fund the expansion of their portfolios of social and affordable housing, through 100% debt, poses a big risk to the government’s Housing for All’s plan that targets to reach 30,000 new homes a year by 2030. Clúid, a not-for-profit charity, has a portfolio of 9,000 affordable homes in Ireland. Last year, it delivered more than 960 new homes, which helped house 3,300 residents. Clúid derives most of its funding to deliver housing from the capital advance leasing facility (CALF) process. It is a simple interest 2% loan, which is paid back at the end of a 30-year period. The Business Post, 20th August
OTHER
State’s Office Rental Public money could be saved if the State built or bought buildings instead of renting them, an internal Government study has found. In one example, a modern office building used by public sector workers with a floor space covering 170,070 sq. ft. will cost the exchequer €374m to rent over its estimated 40-year lifespan. A new-build office would cost €299m, while buying an existing building the same size would cost €288m. This suggests that the savings from building or buying for that one block alone would be up to €86m. Over the five buildings analysed, the State could save €216m by buying or building rather than leasing. The sample of five buildings chosen are a small fraction of the State’s 2,500-strong property portfolio, valued at €3.3bn. 61% of the State’s property portfolio is currently owned, while 39% is leased/rented, together catering for c. 40,000 civil service and State agency staff. The study, prepared for the Government, has also suggested significant savings for the public purse could be made by moving civil servants out of the costliest rental office space in central Dublin to more suburban sites. Currently, more than half (53%) of all Civil Service staff is based in 215 buildings in Dublin, 56% of which are State-owned and 44% are leased. The capital accounts for 80% of the State’s total rental costs. 63% of State rental costs in Dublin are for office space in Dublin 1 and Dublin 2. The Irish Times, 19th August
An Bord Pleanála There is growing evidence that the recent turmoil in An Bord Pleanála (ABP) has slowed down its decision-making, with cases in the first half of this year taking an average of 24.1 weeks to finish, up from 17.5 weeks in the first half of last year. Planning appeals are supposed to be decided within a statutory period of 18 weeks, but the number of cases meeting this deadline dropped to 45% in the first half of this year, down from 59% in the same period in 2021. The delays in finalising cases could be exacerbated by a new requirement introduced by the housing minister that the board must provide him with monthly reports on corporate governance reforms. ABP took in 1,583 new cases during the first half of the year and disposed of 1,357. At present the board is adjudicating on a number of prominent appeals, several of which are already overdue. The Irish Times, 17th August
Property Fund Tax, Ireland A dramatic decline in taxes paid by large investment property funds has prompted a review by the Revenue Commissioners. New data released by Revenue has shown that the effective tax rate has fallen to 5.9% after IREFs paid €36.8m tax on a taxable amount of €621m in 2021, having paid €65.7m on €369m in 2020. In Ireland, large property groups and institutional investors use vehicles called Irish real estate funds (IREFs) to house more than €20bn worth of property assets. The Business Post, 20th August
Naas, Co Kildare 15 appeals have been lodged with An Bord Pleanála by parties seeking to block plans for a solar farm on 277 acres in Co Kildare. The development by Strategic Power Projects Limited for a site 2.5km south of Naas in the rural townlands of Swordlestown North and South is being opposed by the owners of stud farms in the county. The applicant originally sought planning permission for a solar farm across 319 acres comprising 230,688 PV panels and this has been reduced to an area of 277 acres involving the erection of 197,010 PV panels after revised plans were lodged in response to a request by Kildare County Council for further information. A decision is due to be made by An Bord Pleanála in December. The Irish Times, 19th August
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