23rd February (Issue 34)
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
European Loan Portfolios: The latest report from KPMG on European loan portfolio transactions estimates that there is currently over €32bn of transactions in progress, of which c. €17.5bn is CRE. The largest seller of CRE loan portfolios in Europe is NAMA, with c. €7.2bn of transactions in progress (Ruby – €4bn, Emerald – €2.1bn, Abbey – €700m and Lee – €350m). The next largest seller is Propertize, the Dutch bad bank who represent c. €5.6bn of the current pipeline. CoStar Finance, 17th February
RETAIL
Eyre Square Shopping Centre: The proposed €4m redevelopment of Eyre Square Shopping Centre in Galway is expected to begin in early March 2016. The redevelopment will see the existing entrance demolished and replaced by seven retail units, which will range from 129 sq. ft. to 3,000 sq. ft. The project is expected to be completed later this year to allow future tenants to occupy the units before year end. The shopping centre currently has more than 60 stores, with Dunnes Stores and Penneys the anchor units. The Irish Times, 17th February
Cork / Limerick Portfolio: Downing Commercial has set a combined asking price of over €9.5m for a portfolio of retail and office units in Cork and Limerick. The properties are currently owned by Irish Life and can be purchased on either an individual or cumulative basis. The most valuable asset is a 20,000 sq. ft. office block at the University Technology Centre in Curraheen, Cork, which is producing a rent roll of €115k and guiding €2.25m. The total rent roll of the properties is c. €780k, with the retail units located on Patrick Street in Cork and William Street and Cruises Street in Limerick. The Irish Times, 17th February
OFFICE
Central Quay: Hibernia REIT has agreed to purchase the Central Quay office block from Blackstone for €51.3m. The six storey, 57,700 sq. ft. block is located between Sir John Rogerson’s Quay and Hanover Quay in Dublin 2. The block is currently 88% occupied and generating rental income of c. €2.5m p.a. from three tenants; AWAS Aviation, Indeed Ireland and Invesco. The initial yield of 4.5% is projected to exceed 5.5% upon full occupation of the block and the renewal of expiring leases. The Irish Times, 23rd February
Elm Park: A joint venture between Starwood Capital and Chartered Land will oversee the final development phase of the Elm Park complex in Dublin 4, which is expected to cost c. €35m. The agreement will see Starwood develop a sport and leisure centre and further recreational facilities, while Chartered Land will be responsible for converting the 174,000 sq. ft. Pioneer Building into a high quality office block. There is expected to be strong demand from potential tenants for the Pioneer Building given the quality design and attractive location of the complex. Starwood purchased the 750,000 sq. ft. Elm Park for €190m in January 2016, which has a rental income of c. €9.5m p.a. The Irish Times, 19th February
Lower Baggot Street: The Irish investment advisory firm Alway Consulting Ltd has paid €4.5m for four Georgian offices at 19 – 22 Lower Baggot Street in Dublin 2. Alway purchased the offices on behalf of the QIAIF, Ballybunion Capital Ltd. The four storey Georgians were purchased with vacant possession and could also suit a number of alternative uses, subject to planning permission. The Irish Times, 17th February
HOTEL
Parliament Hotel: Halstonville, a company owned by Goldman Sachs, Gerry Houlihan and Aidan Crowe, has agreed to purchase the Parliament hotel in Temple Bar, Dublin 2. Halstonville is 75% owned by Goldman with the remaining 25% owned by a company called Piershine, which Houlihan and Crowe control. The three star, 63-bed hotel is currently owned by Louis Fitzgerald, who paid c. €20m for the hotel in 2008. Details of the purchase price agreed between Halstonville and Fitzgerald have not been disclosed. The Sunday Times, 21st February
Lower Pembroke Street: US businessman Richard Clingen, through his investment vehicle Plaza on the Square Limited, has sought planning permission for a 108-bed hotel in Dublin 2. Per the terms of the application, Clingen is seeking to convert 16 – 18 Lower Pembroke Street from an office building into a hotel. Clingen purchased the property for c. €3m in 2012 from the Gerry Deane and Paddy Fitzgerald of the Pembroke Partnership, who paid €26m for the property in 2006. NAMA Wine Lake, 21st February
RESIDENTIAL / LAND
Finglas Apartments: Colliers International has set an asking price of €4.2m for a block of 28 apartments at Prospect Hill in Finglas, Dublin 11. The apartments, known as Block 9, are part of a three storey building which is rented to Cluid Housing Association on a fifteen year lease from April 2013. The current rent roll of Block 9 is c. €258k with rent reviews every four years. Block 9 consists of 14 two-beds (707 sq. ft. each) and 14 three-beds (1,087 sq. ft. each), and each apartment includes a parking space. The Irish Times, 17th February
Thomas Street: Hattington Capital has been granted planning permission by Dublin City Council to undertake a student accommodation development for almost 250 units on Thomas Street in Dublin 8. The development will be located on the site of the former Frawley’s retail store, which closed in 2007 after over 100 years of trading. Hattington are understood to have purchased the site for c. €2.5m from a receiver. The Irish Independent, 19th February
Sandwith Street: BNP Paribas is inviting offers of at least €4m for the long leasehold interest in a 0.66 acre site, which has dual frontage to Sandwith Street and Boyne Street in Dublin 2. Given the Z4 zoning for the site, it could suit a number of development schemes, such as residential, office or hotel. BNP advise that there is also potential to generate short term income from parking licences while planning permission for a development is sought. The Irish Times, 17th February
Residential Rents: The latest inflation figures from the CSO reveal that private residential rents increased by 1.2% in January 2016, the largest increase in a year. Annual rental inflation is now 9.5%. Residential rents peaked in April 2008 and then fell by 26%, with the bottom of the market reached in December 2010. Rents have since increased by 39%, meaning that current rents are now 3% above pre-crash levels. In comparison, residential property prices remain c. 34% below peak levels. NAMA Wine Lake, 21st February
OTHER
Blanchardstown Distribution Centre: BNP Paribas Real Estate is guiding €18m for a distribution centre in Blanchardstown, Dublin 15. The distribution centre, which is currently owned by Green Property Ltd, consists of Units 1A, 1B and an adjoining administration building at the entrance to Rosemount Business Park. The buildings have a floor area of 266,650 sq. ft., 184 car spaces and are located on a 5.12 acre site. Units 1A and 1B are let under a 20 year lease from September 2008 to Dunnes Stores, for a rent of €1.15m p.a. The lease includes a break option in September 2019. The Irish Times, 17th February
Dublin Recovery: The latest research from CBRE shows that when compared to 53 other cities in the EMEA region, Dublin remained one of the best performing commercial property markets in 2015. Office rents in Dublin rose by 22.3% to €55 psf in 2015, and have now risen by 95.2% since the bottom of the market. Office yields have also recovered strongly, and are now as low as 4.65%. Prime retail rents rose by 14% to c. €249 psf in 2015, and have now risen by 39% from the trough. Zone A retail rents on Grafton Street have also recovered and are now approximately €511 psf. Prime retail yields are now as low as 3.25%, half of what they were at the bottom of the market. The Sunday Business Post, 21st February
Mater Private: The race to purchase the Mater Private hospital in Dublin is believed to have narrowed to three, with the Australian investment bank Macquarie understood to be the front runner. Two South African healthcare operators; Netcare and Mediclinic, are also in the running. The hospital is expected to sell for c. €500m, with the sales process due to finish in approximately one month. The Mater is currently 51% owned by the PE firm CapVest, 32% owned by management and 17% owned by staff. CapVest acquired their stake in 2007, with the purchase price reflecting an overall value of €350m for the Mater at the time. The Sunday Business Post, 21st February
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