24th July (Issue 156)
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
Dublin Docklands: A South Korean fund has emerged as the highest bidder for the second office development at The Landings, in the Dublin Docklands. Selling agents Knight Frank and CBRE were quoting €98.8m for the property, which is expected to sell for c. €105m (€1,055 psf), showing a net initial return of 4.5%. The building has been pre-let to the international services office provider WeWork on a 20-year lease with no break options. The initial rent will be about €4.822m (€47.53 psf). The lease provides for a fixed increase at the first review to €5.327m. The building is being developed by Sean Mulryan’s Irish property company, Ballymore, and its Singapore partner Oxley. The Irish Times, 18th July
South William Street, Dublin 2: Maryland House, a five-storey office and retail building on South William Street in Dublin 2, has been sold for c. €10m (€656 psf), c. €1m above guide price. The 15,244 sq. ft. building is let to AA Insurance until 2024 with a total passing rent of €611,730 (€40 psf), and offers the new purchaser considerable scope for redevelopment as a single large retail venue. The Irish Times, 18th July
30-32 Sir John Rogerson’s Quay: Planning permission has been granted to redevelop a warehouse building in Dublin docklands previously owned by U2 into a new office block. The listed building at 30-32 Sir John Rogerson’s Quay was used as offices by U2’s Principle Management Ltd prior to being acquired by Property fund Iput in late 2016 for c. €20m. The new development will have over 70,000 sq. ft. of river front offices and a new six-storey office block at the rear overlooking an existing public square. Construction is due to commence in the third quarter of this year and is expected to be completed by late 2020. The Irish Times, 24th July
RESIDENTIAL / LAND
CSO Residential Market Update: Latest figures released from the Central Statistics Office show that residential prices at national level increased by 12.4% in the 12 months to May, down from 13.5% in the 12 months to April. The figures also show a slowdown in residential property prices in Dublin with an increase of 10.7% in the 12 months to May, compared to 13% in April. Prices in the Rest of Ireland, once Dublin is excluded, were 14.1% higher in the year to May. The mid-west region showed the greatest price growth, with house prices increasing at 22.1%, almost double the national average. Dublin residential property prices are 22.5% lower than their February 2007 peak, while residential property prices in the Rest of Ireland are 25.5% lower than their May 2007 peak. CSO Publication, 20th July
Northwood Business Campus, Dublin 9: Two sites at the entrance to Northwood Business Campus in Santry, Dublin 9, have been sold by Knight Frank for c. €10m (€1.4m per acre). The sites, extending to 3.64 acres and 3.43 acres, are zoned for commercial developmentand to support the provision of an appropriate quantum of residential development within the Metro Economic Corridor. Both sites previously held planning permission for mixed-use developments but these have expired. The Irish Times, 17th July
Hansfield, West Dublin: The new west Dublin suburb of Hansfield could get a big increase in housing supply, with developers seeking permission for almost 800 residential units. Developer Garlandbrook has applied for permission for 611 mainly two-bedroom apartments on an almost five-hectare site within the Hansfield Strategic Development Zone (SDZ) while developer Castlethorn has also applied for permission to build 155 units in a different part of the SDZ. Garlandbrook completed the first phase of the Hansfield development, which comprised more than 300 homes. The Irish Independent, 22nd July
Donnybrook Proposed Development: Planners are demanding more information from property group Avestus on proposed plans for an €80m apartment block in Donnybrook, potentially delaying a decision on the scheme by up to six months. Avestus is seeking permission from Dublin City Council to build 94 apartments on a site of c. 1.25 acres on Eglinton Road. The council have received objections from c. 70 local residents to the seven-storey block on grounds including that it is too high, will worsen traffic congestion on already clogged suburban roads and is contrary to proper planning for the area. The council responded to Avestus’ planning application by seeking more information from the company on its proposal, giving the developer 6 months to provide answers. The council will decide whether to allow the company build the apartment block after it has considered the answers. The Irish Times, 23rd July
HOTEL
EasyHotel, Smithfield: Budget hotel operator EasyHotel has acquired a site on Benburb Street in Dublin city centre for €9m. The site currently has planning permission for a 96-bedroom hotel, however the hotel operator believes there is potential to extend this to 130-bedrooms by varying the existing planning permission. A total of €18m is expected to be spent on the investment, which will be funded using cash from the group’s balance sheet, together with local debt financing. The Irish Independent, 20th July
Henry Street Hotels: Property developer Noel Smyth has lodged plans for a 257-bedroom hotel beside Arnotts department store in Dublin city centre. The plan involves demolishing the three top levels of the Arnotts car park at Henry Street, which is owned by the group, and replacing them with hotel floors. The overall hotel development would be nine storeys over basement, with the main access from Middle Abbey Street.
Separately, Noel Smyth was last month granted permission for another hotel in the area, at the corner of Middle Abbey Street and Liffey Street. That plan for a 365-bedroom hotel attracted objections but was approved by Dublin city council after the developer agreed to reduce its height to eight storeys. It is expected work will start on that hotel towards the end of this year and be completed by late 2020. The Motel One chain will operate the venue. The Times, Irish Edition, 22nd July
Mount Street, Dublin: The Press Up Entertainment Group has submitted plans for a hotel at the former Howl at the Moon superpub on Mount Street, Dublin. Its previous plan for a hotel on the site was rejected. Press Up has proposed a 52-bedroom hotel that will costs c. €15m to develop and employ up to 90 people. The proposed venue will include a rooftop restaurant. The Times, Irish Edition, 22nd July
RETAIL
Waterstones Bookshop, Cork: The Waterstones bookshop on Patrick’s Street in Cork city has been sold to a locally based private investor for c. €6.5m. CBRE had been quoting €6.25m for the property, which will show a net initial return of 10.8%. The double-fronted store produces an annual rental income of €770,000 (€68 psf) under a 35-year lease, which has almost five years to run. The building has an overall floor area of 11,367 sq. ft. The Irish Times, 17th July
OTHERS
JLL Property index: The latest JLL Property Index reports that the value of Irish commercial property has almost doubled over the last five years, however it is still below the levels achieved before the crash. It calculates that the capital value section of the index has increased by 91.6% since the trough of the market in 2013, but remains 37.1% below the peak attained in 2007. In the current year however, the rate of growth in capital values has slowed to only 0.7% in the three months to the end of June bringing the 12 month growth rate to 5.0%. For the second quarter in a row, the industrial sector saw the strongest growth in capital values with a 0.8% rise in Q2 2018 and bringing to 4.4% its growth in the first half of this year. While there was a slight pick-up of 0.6% in the second quarter growth of office values which brought first half growth for this sector to 0.9%, nevertheless this curtailed 12-month growth for office values to 6.8%.The Irish Independent, 19th July
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