24th May (Issue 47)

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.




Beacon South Quarter: DTZ is inviting offers of €11.5m for 24 retail units in the Beacon South Quarter development in Sandyford, Dublin 18 and an industrial unit on 19 Corrig Road, Dublin 18. Of the 24 retail units in the portfolio, 10 are currently vacant, offering investors the ability to significantly increase rental income through active management. The current annual gross rental income of the retail units is c. €948k, with the net income at €534k. The largest tenant is Ulster Bank, who pays c. 30% of the rental income and has over 16 years left on its lease. The industrial unit included in the portfolio sits on a c. 0.5 acre site and is occupied by Knight’s Catering under a 10-year lease which expires in 2024. Knight’s Catering is paying €40k p.a., however the lease also provides it with the option to purchase its unit. The Irish Times, 18th May

Shannon Retail Centre: TWM has set an asking price of €2.3m for Shannon Retail Centre in Athlone. The 90,700 sq. ft. centre includes a 60,000 sq. ft. anchor unit and it sits on a 2.85 acre site. Tesco previously occupied the centre however they have since moved to the nearby Golden Island Shopping Centre. The retail centre has been largely vacant since the economic downturn and the gross annual income is just c. €66k. The sales price equates to a value of c. €25 psf, while the build costs for a similar project are estimated at over €100 psf. Subject to planning permission, the property also has potential for alternative uses. There is an adjoining car park for 401 spaces which is being sold separately by Lisney for €200k. The Irish Times, 18th May

Boyers Department Store: Sports Direct has paid nearly €12m to purchase the former Boyers department store on North Earl Street in Dublin city centre. Boyers closed in January after trading for 110 years. DTZ sold the property on behalf of the developer Noel Smyth. Both Aldi and Lidl had also been interested in acquiring the department store. The Irish Times, 18th May 

Ravenhall: CBRE is guiding €2m for a retail and office development on the Dublin Road in Bray, Co. Wicklow. Ravenhall is a three-storey development with retail on the ground floor and office space overhead. The retail units have a combined floor area of 10,548 sq. ft. and the office space has a floor area of 31,911 sq. ft. Only two of the retail units are let and just 590 sq. ft. of the office space is let. The current annual income is €52.5k, however this can be increased significantly through active management. CBRE is conducting the sale on behalf of the receiver, WK Nowlan. The Irish Times, 18th May



Amazon Vertium: Amazon has agreed in principle to a lease which will see it occupy the 172,000 sq. ft. Vertium Building which is under construction in Dublin 4. The six-storey block is being built on Burlington Road and should be ready for occupation by April / May 2017. Under the terms of the lease, Amazon will pay a blended rate of €50 psf. The lease is expected to contain a tenant break option in year 13 and Amazon will also be able to avail of 95 car spaces at basement level. The site of the Vertium Building was acquired in June 2014 by a consortium consisting of Johnny Ronan, U+I, Paddy McKillen and Colony Capital. This consortium is expected to dispose of the asset in the near future, having agreed terms with the German investor Union Investment Real Estate. The Irish Times, 18th May

Phoenix House: Ryanair has retained Murphy Mulhall to dispose of its former headquarters on Conyngham Road, Dublin 8, for which offers in excess of €10m are being sought. Phoenix House is a five storey, 37,986 sq. ft. block which was built in the 1980s. The second and third floors are currently occupied by the OPW, who pay €365k p.a. and have eight years left on the lease. The potential rental income for the entire block is over €950k (c. €25 psf), however the other floors require refurbishment before they can be let. There are also 70 car spaces available at basement level. The Irish Times, 18th May

Project Pegasus: Johnny Ronan has obtained planning permission for a six-storey office block in Ballsbridge, Dublin 4. The development, which has been named Project Pegasus, will have a floor area of c. 560,000 sq. ft. and will be located at the front of AIB’s Bankcentre. Planning permission was granted despite over 20 separate objections, with AIB and An Taisce among those who voiced concerns. Mr Ronan acquired the c. four-acre site in 2015 for €67.5m. The Irish Times, 19th May

Bank of Ireland Limerick: An unnamed investor has paid €10.5m for an office block in Limerick City which is occupied by Bank of Ireland (BOI). The three storey block has a floor area of 22,550 sq. ft. and was significantly refurbished in 2009. BOI occupy the property under a 25-year FRI lease from December 2006. The annual rent is c. €686k with upward only rent reviews every five years. Knight Frank had placed the property on the market in December 2014 with a guide price of €8m, which was c. €12m below the €20m it sold for in 2008. The Irish Independent, 19th May

IPC House: David Daly has sought planning permission to redevelop IPC house on Shelbourne Road in Dublin 4. Mr Daly is seeking approval to demolish the existing five-storey block and replace it with a c. 67,000 sq. ft. block which will be six storeys tall. The Sunday Times, 22nd May

Dublin Office Review: Knight Frank’s review of the Dublin office market in Q1 2016 reveals that take-up increased by 62% when compared to Q1 2015. The total level of take-up was 723,221 sq. ft., spread across 54 transactions (average of 13,393 sq. ft.). In contrast the take-up in Q1 2015 was 445,947 sq. ft. across 69 transactions (average of 6,463 sq. ft.). Prime rents in Dublin are now averaging €57.50 psf. Dublin 2 remains the most sought after area, with a 34% share of the market. The vacancy rate in Q1 2016 fell to 8.3%. The Irish Times, 18th May



Pinebrook House Hotel: Olema Consultants, the investment vehicle of Brian & Sally McGill, has obtained planning permission for a new 152-bed hotel on Harcourt Street, Dublin 2. To develop the four-star hotel, the McGills will convert the four-storey Pinebrook House Offices at 72-74 Harcourt Street, while adding a further two storeys to the property. Upon completion, the hotel will be the sixth hotel on Harcourt Street. The Irish Independent, 20th May

Pillo Hotel: The Brogan family, which includes Dublin footballers Alan and Bernard, have completed the purchase of the Pillo Hotel in Co. Meath for c. €8m. The four-star, 148 bed hotel is trading profitably and is well located close to the Tayto Park theme park in Ashbourne. The hotel opened in 2007 and has a bar, restaurant and conference / banquet facilities capable of accommodating up to 550 guests. The Brogan family are believed to have other hotel interests, and are understood to have recently acquired the Dundrum House resort in Co. Tipperary for c. €3m. The Irish Independent, 23rd May



Harcourt Terrace: CBRE is guiding €5.75m for a listed building in Dublin 2 which has full planning permission to be converted into 14 high-end apartments. The three-storey property is located on the corner of Harcourt Terrace and Adelaide Road and will accommodate a scheme consisting primarily of two and three bed apartments. While the €5.75m guide price equates to c. €410k per apartment, CBRE advise that a further €2m – €2.5m will need to be spent to convert the property into 14 apartments. Each of the apartments will have a floor area of c. 1,000 sq. ft. and there are 15 car spaces available. The Irish Times, 18th May

Spencer Dock: Ronan Group Real Estate (RGRE) has completed a deal to acquire a c. six-acre site at Spencer Dock in the Dublin docklands. RGRE, which is led by developer Johnny Ronan, has paid c. €43m to complete the transaction. The site has planning permission for two office blocks, 165 apartments and will also allow for the redevelopment of the former London and North Western Railway Hotel. To develop the site, RGRE will form a joint venture with CIE, while Colony Capital is understood to be providing financing for the development. The Sunday Times, 22nd May

Student Accommodation: BAM Property Limited, which is part of the BAM group, has sought planning permission from Dublin City Council to develop 303 student accommodation bedspaces and 100,000 sq. ft. of office space. The properties are to be located at the junction of Blackpitts and Mill Street. The office space would be completed by converting two existing office buildings while the student accommodation units would require a new development which would be four to seven storeys tall. NAMA Wine Lake, 22nd May

Grange Castle Site: South Dublin County Council is seeking expressions of interest from developers for a 6.15-acre site in Grange Castle Business Park which has a value of c. €3.075m (c. €500k per acre). The site has capacity for an office development whose floor area could extend to 226,000 sq. ft. in either a single or multiple blocks. Google, Pfizer and Microsoft are already in situ in the business park, which is set on a 500-acre site. The Irish Times, 18th May

Shannon Development: Shannon Commercial Properties has sought planning permission for the development of a four-storey, 55,000 sq. ft. office block near Shannon Airport in Co. Clare. The estimated cost of the block, which will be located at Shannon Free Zone West, is €8m. The block is the first development proposed under the company’s five-year, €21m redevelopment proposal for the oldest parts of Shannon Free Zone. The Irish Times, 18th May

New Strategic Development Zone: According to The Irish Independent, Dublin City Council has been given permission by the government to create a new Strategic Development Zone (SDZ) in Dublin 4. The area to be covered under the new SDZ is a c. 84 acre landbank in Poolbeg. Included in the landbank is the Irish Glass Bottle site, which was bought in 2006 for €400m but is now reportedly worth less than €50m. The SDZ is understood to be capable of accommodating c. 3,000 homes and c. 1.4m sq. ft. of commercial facilities. The estimated cost of developing the housing units alone is over €800m. The Irish Independent, 20th May

Mortgage Rates: The Minister for Finance, Michael Noonan, believes AIB may announce a further mortgage rate cut in the near future. Interestingly Mr Noonan has made the comments at a time when AIB’s most recent mortgage rate cut has not yet been implemented. The most recent 0.25% mortgage rate cut announced by AIB won’t take effect until July 1st. Mr Noonan also said that he intends to meet representatives of the Irish banks to discuss mortgage costs, although both he and Central Bank Governor Philip Lane have said that giving the regulator power to control mortgage rates could act as a deterrent for companies looking to enter the market. The Irish Times, 20th May


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