24th January (Issue 381)

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.



Dawson Street, Dublin 2 Irish property investment group Tetrarch Capital has instructed agent CBRE to find a buyer for the Dawson Hotel which is being offered to the market at a guide price of €17.5m. The subject property briefly comprises 36 bedrooms (currently closed) along with extensive food and beverage outlets at ground-floor level. The Irish Times, 18th January

Maynooth, Co Kildare The Carton House hotel resort in Co Kildare returned to operating profit in 2021 as revenues more than doubled to €8.94m “following a strong recovery from the pandemic”. New accounts for the Belmullet Hospitality Group Ltd that operates Carton House Hotel, Golf and Spa Resort in Maynooth, Co Kildare, show that the business recorded operating profits of €81k in 2021, following an operating loss of €3.1m in 2020. Revenues increased by 110% from €4.25m to €8.94m as the business was able to reopen and relaunch in early June 2021 as Covid-19 restrictions eased. The business recorded a pretax loss of €2.38m in 2021 after non-cash depreciation costs of €1.69m and interest payments of €767.5k were taken into account. This loss was down on the pretax loss of €14.5m for 2020 which took account of a non-cash write-down in property of €10m. The 2021 operating profit takes account of Government grants of €2.52m. The Irish Times, 19th January

Licensed Premises Review and Outlook According to Lisney’s Licensed Premises Review and Outlook report, transactional activity witnessed in 2022 was more in line with the 10-year average following the exceptional peak witnessed in 2021. 2022 witnessed 23 transactions completed with a combined value of €51.48m. The most significant change witnessed in the 2022 Dublin market was the reduction in activity of Private Equity (PE) purchasers. Having been extremely active in 2021 and accounting for 37% of volume and 73% of value, PE only factored in one Dublin transaction in 2022. Notably, Publican purchasers re-emerged as the forerunners of the 2022 market accounting for 48% of volume and 37% of value. This compares to 37% of volume and 15% of value in 2021 and is illustrative of increased operator confidence in the sector. The Investor category also witnessed significant uplift with percentage of volume increasing from 10% to 39% and percentage of value rising from 5% to 36% in 2022. In general terms, demand for good city premises remained strong and was illustrated through the recent sales of O’Donoghue’s Suffolk Street, Nancy Hand’s Parkgate Street and The Flowing Tide Middle Abbey Street, all acquired by established publican purchasers. Lisney Report, 20th January



Camden Street, Dublin 2 Developer Charles O’Reilly Hyland has paid c. €9m to secure ownership of a 0.3-acre site with development potential in Dublin city centre. Located immediately to the west of Camden Street, 12 Camden Row is home currently to a 18,299 sq. ft building, which is occupied under a series of licence agreements. Taken together, these delivered a gross operating income of c. €704.1k in 2021 based on a current occupancy rate of 66%. The site was offered to the market by agent Savills at a guide price of €9.5m in May of last year. The Irish Times, 18th January

Lord Edward Street, Dublin 2 Paris-headquartered investor Remake Asset Management has made its first acquisition in the Irish property market, paying €9m for an office investment in Dublin city centre which was guiding €8.8m. The subject property – 14-16 Lord Edward Street – comprising 14,156 sq. ft of office space distributed across nine suites, is fully let and producing €589.5k in annual rental income. 68% of the passing rent is derived from local authority/government-backed occupiers. The office tenants include the Irish Film Board, Dublin City Council, Gradireland and Heneghan Peng Architects. With a stable cash flow in place and a WAULT of just under five years, Remake stands to secure a return of c. 6% on its investment. The sale of the property comes just over seven years on from its acquisition for €7.1m by its outgoing owner, an American investor. The price paid on that occasion represented a 16% premium on the building’s then guide price of €6.1m. At the time the investment had a WAULT of 2.09 years and a total rental income of €457.9k pa. The Irish Times, 18th January

Harcourt Street and Northumberland Street, Dublin Murphy Mulhall is guiding prices of €2.7m and €1.35m respectively for two period office properties in Dublin’s Georgian core. In the case of no. 15 Harcourt Street, the prospective purchaser stands to secure immediate rental income of €137.2k pa. The premises briefly comprises a four-storey over-basement Georgian office property which extends to a NIA of 4,943 sq. ft.
No. 40 Northumberland Road comprises a three-storey over-garden-level period property of 1,970 sq. ft and is located close to the junction with Haddington Road in Dublin 4. The ground and first floors are let on a short-term licence producing €60k pa, while the lower-ground floor live/work unit is currently vacant. The Irish Times, 18th January



Dublin City Centre The founder of the State’s largest waste company, Beauparc Utilities, has agreed a €40m deal which will see him acquire Victoria’s Secret’s flagship store on Grafton Street along with supermarket giant Tesco’s premises on Lower Baggot Street. Eamon Waters is understood to have agreed to pay sums of €28m (NIY 5%) and €12m respectively to secure ownership of the two buildings from Irish property company, Iput. In the case of Victoria’s Secret’s premises at 28-29 Grafton Street, the global lingerie chain is understood to have committed to an annual rent of €1.5m for the remaining 10 years of its lease. Iput had acquired the building in 2012 from the ESB Pension Fund for c. €20m as part of a larger transfer of property investments to the fund. The building comprises c. 20,000 sq. ft of retail space at ground, basement and first-floor level as well as c. 10,000 sq. ft of storage on the two upper levels.
The Tesco premises at 15-16 Baggot Street Lower meanwhile briefly comprises a grocery convenience food store on the ground floor, with a shop trading area extending to 5,988 sq. ft. While the grocery store is fully occupied by Tesco itself, the retailer has sublet the upper floors of the building to gym operator Flyefit while a three-storey mews building to the rear has been sublet to XS Direct. While the Baggot Street property had been advertised publicly for sale by Savills at a guide price of €12.8m, the disposal of the Victoria’s Secret store was handled by the same agent on an off-market basis. The Irish Times, 23rd January



Swords, North Dublin French investor Iroko Zen has paid just under €18m (NIY 6.75%) to secure ownership of South Quarter Airside near Swords in north Dublin. Located across from Airside Retail Park, the scheme owned by Irish Life, Iput, and its original developer, David Daly, comprises two four-storey multi-let buildings extending to an overall area of 90,685 sq. ft and 230 car-parking spaces on a site of 1.65 acres. Extending to 57,079 sq. ft, Block A at South Quarter Airside now contains a newly developed remote broadcast and content production centre (RBC) and a mix of six retail/restaurant units. Riot Games occupies Block A on a new 15-year lease at a passing rent of €600k pa stepping up to €650k in year three with a CPI-indexed rent review at year five. Other tenants in Block A include Hogs & Heifers, Pizza Dog, Indigo Pearl and O’Briens with a combined rent of €287.5k pa. There is a WAULT to break of c. nine years and over 14 years to expiry. Block B comprises a four-storey building extending to c. 33,605 sq. ft and is let in its entirety to Flyefit on three separate leases producing an income of €445k pa. Combined, Airside South Quarter provides an attractive WAULT to break of over 10 years with c. 13.4 years to expiry. The Irish Times, 18th January



Clondalkin, Dublin 22 Guiding at a price of €7.9m (NIY 7.31%), Unit AF40 at Cloverhill Industrial Estate is being offered to the market by Harvey by way of sale and leaseback. The subject property extends to 85,935 sq. ft on a site of 5.56 acres and comes with the benefit of a new 15-year FRI lease to Alucraft Limited, with a guarantee provided by its parent company, the Clarison Group. The lease will incorporate a tenant-only break option at the end of year 10. The rent will step from €635k pa in years 1-5, to €698.5k pa in years 6-10, reverting to a CPI-linked cap-and-collar structure of 3% and -0.5%, compounding annually in years 11-15. The company has invested extensively in Unit AF40 since it moved there in 2012, and its intention during the term of the lease is to construct a new building, subject to planning permission, of c. 6,620 sq. ft within the site grounds. The Irish Times, 18th January
For lending terms on this asset please contact rossmetcalfe@origincapital.ie

Ballymount Cross, Dublin An opportunity to buy a vacant warehouse close to the M50 is being offered to the market. Unit 6A Parkway Business Centre, Ballymount Cross, Dublin, extends to 23,214 sq. ft and sits on a 0.79-acre site. Savills is quoting €3.25m for a private treaty sale on behalf of PWC which is acting as a receiver. The Irish Independent, 19th January
For lending terms on this asset please contact rossmetcalfe@origincapital.ie



Roundwood, Co Wicklow A ready-to-go housing development site in Roundwood, Co Wicklow, is being offered for sale with a €2m guide price. Located at Djouce Meadows, the 2.41-acre site comes with full planning permission for 20 dormer-style houses. They would comprise two two-bedroom semi-detached houses, 15 three-bedroom semis and three four-bedroom detached houses. The property is situated 500m from Roundwood village, which provides local amenities and services. Dublin city centre, which is located 35 km north of the property, is accessible via the N11 motorway. The Irish Independent, 19th January

Residential Development Developers in Ireland may repurpose commercial buildings and offices as homes to speed up the delivery of housing, according to CBRE, the commercial real estate services and investment firm. CBRE said that the repurposing of commercial properties has become a significant feature in other markets and could become more prevalent in Ireland as the country is “massively under-supplied across all housing tenures.” The company’s 2023 Market Outlook said, however, that there are also “significant” concerns about the viability of apartment building as construction and financing costs increase. Higher financing costs will “impact new dwelling completion numbers over the medium-term” with smaller developers in particular likely to find it difficult to deliver new stock, according to the research. Demand for rental accommodation will be “resilient” this year and likely support average rent price increases of up to 4%, CBRE added. The Business Post, 19th January

Clondalkin, Dublin 22 A temporary accommodation centre housing 148 refugees in west Dublin is to be evacuated on the advice of Dublin Fire Brigade. The International Protection Applicants will be moved from Dolcain House in Clondalkin “as soon as is practicable”, a spokesman for Minister for Integration Roderic O’Gorman said. Local TDs in Dublin Midwest were told that the process of moving the International Protection Applicants from Dolcain House in Clondalkin has begun, on the advice of South Dublin County Council (SDCC). It comes amid a serious shortfall of bed spaces for International Protection Applicants – with Citywest Transit Hub expected to close to new entrants in the coming days. The Irish Times, 20th January

Caherdavin, Limerick Developers’ plans to build a new primary care centre in Limerick have been scuppered after the land it was to be built on was rezoned for agriculture while the appeal lay within An Bord Pleanála’s backlog. Although submitted in March 2022, before the new county and development plan came into effect in July, An Bord Pleanála only issued its decision on the planning application for the primary care health centre in Caherdavin on the Ennis Road earlier this month. This was c. 10 months later and more than five months after the new development plan had come into place, rezoning the land. The new Limerick City and County development plan for 2022-2028 was formally adopted by the council last summer, coming into effect on July 29, 2022. The planning appeal for this primary care centre was lodged on March 15, 2022, over 19 weeks before the new development plan came into effect. The Irish Examiner, 19th January

Social Homes Figures obtained from the Department of Housing show that 2,706 new-build social homes were delivered up to the end of September last year. Of these, 1,946 units (72%) were acquired by way of so-called turnkey purchases – where the local authority or approved housing body enters into a forward-purchasing arrangement with a private developer – or through the Part V rule, which stipulates developers must set aside a certain portion of their developments for social housing. Turnkeys represented 54% (1,452) of the total while Part Vs represented 18% (294). 28% (760 homes) were delivered directly by local authorities via the Social Housing Capital Investment Programme or by approved housing bodies through the Capital Advance Leasing Facility. Reliance on the private sector to deliver housing was highlighted as a “vulnerability” in a briefing document prepared by the Department of Public Expenditure and Reform for its new Minister, Paschal Donohoe, when he took up the role last month. The Irish Times, 24th January



Dublin Airport The competition watchdog has received six complaints about the planned purchase by DAA of a large Nama-controlled car park near Dublin airport. DAA, the operator of Dublin and Cork airports, was the successful bidder for the only privately owned car park at the former. The property is owned by the developer Gerry Gannon, whose debts are controlled by Nama. It came on the market last year with a guide price of €70m. The 42-acre site, which has space for 6,122 cars, was previously operated by John O’Sullivan’s QuickPark. It has been closed since 2019. It is thought that a number of complaints have been lodged from underbidders for the site. If the sale is completed, DAA will own all three dedicated car parks in the vicinity of the airport. Under planning regulations set out by Fingal County Council, a maximum of 26.8k long-term car parking spaces can be provided in the area. The two car parks that DAA already owns have 17.18k spaces. In the event that the CCPC investigates the purchase, such an inquiry could take up to six months to complete. That could mean the airport car park would not open before the summer. The Sunday Times, 22nd January

Commercial Real Estate Outlook An analysis has shown that c. €10bn could be wiped off the value of commercial property in Ireland this year due to rising interest rates and weakening demand. Market analysts are projecting that commercial property values across retail, industrial, logistics, office and residential units will fall between 10 and 20% this year in response to the changing economic environment. The three main property investment funds held by Bank of Ireland, Aviva and Irish Life collectively hold c. €2.3bn-worth of commercial property assets. Over the last six months, these property funds have booked multiple write-downs, knocking more than €110m off their combined value. Bank of Ireland’s €1.2bn property fund has shed more than 6% of its value in recent months, while the €660m property fund controlled by Aviva and Irish Life’s €455m property fund are both down 3%. If the Goodbody outlook for commercial property proves true, the funds may be set to book a further €400m to €450m in write-downs this year. The Business Post, 21st January

Dwyer Nolan Accounts Dublin based developers Dwyer Nolan last year recorded pretax profits of €31.03m as revenues soared. Accounts for Dwyer Nolan Developments Ltd show that the firm recorded the pretax profits in the 12 months to the end of May 31st last as revenues increased more than 17 fold from €5.7m to €99.98m. The building firm had recorded a loss of c. €356.2k in the previous year. The Shankill-based company recorded a gross profit of €32.9m after incurring €67m in cost of sales. The Irish Times, 23rd January

The Land Development Agency (LDA) has signed tender agreements to outsource more than €42m worth of work since it was set up more than four years ago. The agency was established in September 2018 with a €1.25bn capital budget to expedite the construction of 150k homes over 20 years on state lands. At the time, the government said sites had already been earmarked for 10k homes. Last month, figures released by the agency showed it has built no homes on state lands to date, and that all 270 homes it had delivered in 2022 were acquired from some of the biggest developers in the country. In December 2022, it entered into a €12.5m framework arrangement with quantity surveying service firms. The Business Post, 21st January

Non-Performing Loans Goldman Sachs, one of the early active buyers of non-performing loans across Europe in the aftermath of the global financial crisis, has been selling portfolios in several jurisdictions and recently been working on secondary sales with a total value of more than €2.5bn. At the end of last year, Goldman sold a portfolio with a gross book value of more than €1bn to LCM. The portfolio was secured by real estate with a large residential component. For a decade the investment bank had been buying NPLs (including from Irish banks) and in the past few years it has started selling some of the legacy. React News, 23rd January


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