24th November (Issue 22)
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
AIB Loan Sales: AIB is preparing to launch the sale of two loan portfolios which have a par value of c. €783m. Project Forge is a portfolio of primarily UK property loans with a par value of GBP£420m (€600m), with the portfolio linked to over 150 borrowers. The second portfolio is Project Hurst, which has a par value of €183m and is secured by 100 assets. The Sunday Independent, 22nd November
Central Park: Green REIT have agreed to purchase Kennedy Wilson’s 50% stake of the Central Park development in Leopardstown, Dublin 18. The estimated cost involved in assuming 100% ownership of the development is c. €160m, which will be part financed by Green REIT’s €85m credit facility with Barclays. Green REIT will also become responsible for Kennedy Wilson’s portion of the Bank of Ireland debt secured by the development. The transaction will need to be approved by the Competition and Consumer Protection Commission before it can be completed. The Irish Times, 19th November
OFFICE
7 Hanover Quay: Accenture have agreed terms with the Irish property fund IPUT on a 15 year lease for 7 Hanover Quay in Grand Canal Dock, Dublin 2. Accenture will pay a rent of c. €3.65m p.a. for the 66,300 sq. ft. office block, equivalent to €55 psf. The property includes 52 underground car spaces. IPUT purchased the property in May 2014 for €50m and have since spent a further €5m refurbishing the property. The letting is understood to have increased the value of the property to c. €75m.The Irish Times, 24th November
Project Wave: Dublin City Council have granted planning permission for the first phase of Project Wave, a c. 5.4 acre site in Dublin’s north docklands which can accommodate over 538,000 sq. ft. of commercial space and over 250 apartments. Planning was obtained via the fast track planning scheme available for developments within the Docklands Strategic Development Zone. The first phase of Project Wave will see the development of two interlinked office blocks which will be seven and nine storeys tall. The NTMA have identified one of the blocks as the desired location of their new HQ. The Irish Times, 23rd November
Dublin Airport: The Dublin Airport Authority have secured ESB International as the tenant for the former HQ of Aer Lingus in Dublin Airport’s Business Park. ESB are currently occupying an 80,000 sq. ft. property in St. Stephen’s Green in Dublin 2. They will move to their new six storey, 81,000 sq. ft. property in the new year once their existing leases expire and the c. €10m redevelopment of their new offices is complete. ESB will pay rent of c. €27.60 psf on their new lease. The Irish Times, 18th November
Marine House: Joint agents Murphy Mulhall and Lisney are guiding in excess of €23m (€560 psf) for Marine House in Clanwilliam Place, Dublin 2. The six storey, 41,132 sq. ft. office property is fully let and tenants include LeBruin, Origin Capital, Crowe Horwath and WK Nowlan. The property also contains 91 underground car spaces. The current rental income is c. €1.12m p.a. however there is potential to increase rents from upcoming reviews and lease renewals. Based on recent lettings, Lisney project the market rent of the property is in excess of €1.8m. The Irish Times, 18th November
One Earlsfort Terrace: Knight Frank are guiding €16m for One Earlsfort Terrace on the corner of Earlsfort Terrace and Hatch Street in Dublin 2. The six storey, 21,750 sq. ft. property is fully let to the legal firm Eversheds at an annual rent of €630k. There are c. 11 years remaining on the lease, with agreed minimum increases in rent at each five yearly rent review. The next rent review is in 2016, when the rent will increase to €750k (€31.45 psf). There was also planning permission granted in 2011 for two additional floors, which would provide further floor space of 16,328 sq. ft. The Irish Times, 18th November
One Molesworth Street: Green REIT have commenced the demolition of the existing building at One Molesworth Street in Dublin 2 to make way for a new five storey property. The new property will have 23,089 sq. ft. of retail space, 71,159 sq. ft. of office space and 27 car spaces. Green REIT purchased the existing premises for €23m and the development of the new property is expected to cost c. €30m. Green REIT expect to have the property ready for fit out by mid-2017, with rents in excess of €50 psf anticipated for the office space. The Irish Times, 18th November
HOTEL
Jurys Inn: The CEO of Amaris Hospitality, John Brennan, has announced that Jurys Inn on Custom House Quay in Dublin’s IFSC is to be rebranded as a Hilton Garden Inn. In addition to the rebranding, the three star, 239 bed hotel will also undergo a refurbishment, which will see the rooms upgraded in addition to a gym being added. The total cost of the project is estimated at €7m. An expansion of the hotel by up to 85 rooms has been sought, however this has been objected to by the company who own the nearby CHQ building. The Irish Independent, 20th November
RETAIL
Blackrock Units: Murphy Mulhall have set an asking price of €3.5m on five adjoining retail units with offices at 14-22 Main Street in Blackrock, Co. Dublin. One vacant apartment is also included at the rear of 20 Idrone Mews. Tenants include Boylesports, Supermac’s and Eddie Rocket’s. The total floor space of the portfolio is 16,299 sq. ft., with 2,594 sq. ft. of commercial space vacant. The current rental income of the portfolio is c. €294k p.a., however the potential rental income is projected at €360k. Based on the current rent, the portfolio offers a net initial yield of c. 8%. The Irish Times, 18th November
Parkside: Joint agents Hume Auctioneers and Lambert Smith Hampton are handling the sale of the Parkside development in Portlaoise, Co. Laois, which has an asking price of €4.2m. The property commenced trading in 2006 and is a mix of retail and office space. The key tenants are Supervalu and Coillte, who pay €300k and c. €83k p.a. respectively. SuperValu occupy 19,000 sq. ft. of retail space while Coillte rent 6,191 sq. ft. of office space. There are also 16 retail units and 24,809 sq. ft. of office space vacant at present. The annual rental income of the property once two pending retail units are let will be c. €398k. The property is being sold on the instructions of receiver Duff & Phelps, who were appointed by ACC Loan Management. The Irish Times, 18th November
CBRE Research: CBRE’s Q3 2015 report on the Irish retail market demonstrates the continued recovery in the sector. The report compared the vacancy rates of ten counties in Q3 2015 to Q1 2015, and found that only three counties reported increases in vacancy rates. Cork’s high street saw the strongest improvement in vacancy rates, falling by 12.9% to 6.6%. The total level of investment in the Irish CRE retail market, excluding loan sales, was c. €456m for the first nine months of 2015. This represented 21% of the total investment spend in the Irish property market for the period. CBRE Ireland Retail Marketview, Q3 2015
RESIDENTIAL
Norabrook: A 1.7 acre site in Dublin 3 with planning permission for 18 houses is understood to have been sold for substantially more than its €5m guide price. Norabrook on 119 Howth Road contained a large derelict house when CBRE put the site on the market in September. Planning permission for the development of 18 four bed houses was obtained in November 2014, with the application valid for five years. The unnamed purchaser of the site has already commenced work on the site. The Irish Independent, 19th November
Student Accommodation: PWC, the NAMA appointed receivers over Wintertide Ltd, sought planning permission in September 2015 for a 970 bed student accommodation complex at the Point Village in Dublin’s north docklands. After reviewing the application, Dublin City Council has informed PWC that a number of amendments will be required before their proposal will be reconsidered. In particular the council identified issues with the quality and design of the living accommodation. PWC’s proposal also included the development of a number of studio apartments, however these are not permissible for off-campus student accommodation under current regulations. The Irish Times, 23rd November
OTHER
Construction Projects: New data from the Building Information Index, which tracks building related data, states that projects worth €4.25bn were being worked on around the country in the first nine months of 2015. That is an increase of more than €1.7bn (67%) compared to the same time in 2014. Importantly, the report shows that the increase has not been confined to Dublin, with strong performances being seen across the country (Munster has jumped 126%, Connacht and Ulster have seen activity values increase by a third while in Leinster construction is up 39%). The Irish Independent, 19th November
Allsop’s Auction: Allsop’s final auction of 2015 will see over 260 lots go under the hammer, with reserves in excess of €43m. Allsop’s expect to see over €26m of residential assets and €16m worth of commercial assets sold at the December auction. The auction will see five lots with values in excess of €1m being sold, with four of them being commercial / investment sales. The Irish Examiner, 19th November
If you have an article which you would like to have considered for inclusion in our next weekly report, please contact us at info@origincapital.ie