25th July (Issue 407)

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.



Davy Real Estate A fund controlled by property investor Davy Real Estate has completed two deals totalling €103.5m to acquire seven of Ireland’s regional shopping centres. The fund has snapped up Kennedy Wilson’s Marshes Shopping Centre in Dundalk for €29.5m. The investor has also just clinched a collection of six regional shopping centres from Pat Doherty’s Harcourt Developments for €75m. Dubbed the Hexagon portfolio, the deal comprises Donaghmede Shopping Centre in Dublin; Letterkenny Shopping Centre in Donegal; Laois Shopping Centre in Portlaoise; Galway Shopping Centre; Parkway Shopping Centre in Limerick and the Longwalk Centre in Dundalk, Co Louth. The price Davy paid for the properties represent a 26% discount on the €100m guiding price set by JLL, under the instructions of receivers KPMG. React News, 24th July

Dundrum, Dublin 14 Dunnes Stores is to open a new store at Dundrum Town Centre in Dublin later this year. Hammerson, the real estate developer that operates the shopping centre, said the retailer will take up 200,000 sq. ft of space at Dundrum Town Centre to mark its debut at the shopping centre in October. Hammerson said that Superdrug will also change 8,000 sq. ft of retail space into a new cosmetics store, while Western Union, the financial services company, also plans to open a new workspace there. The Business Post, 25th July

Limerick and Navan Realty Income Corporation, a US investment giant, has entered the Irish market with the purchase of two retail parks. It has paid €45.9m for CityEast retail park in Limerick and Blackwater retail park in Navan, Co Meath. Eden Capital was the vendor of both properties. It purchased the retail parks in 2020 and 2021. Retailers at CityEast include B&Q and Harvey Norman, while Blackwater has Woodie’s and Currys among its tenants. The Sunday Times, 22nd July

Retail Sector Bricks and mortar retail has seen a rebound in Dublin city centre with increased occupancy levels on the two high streets and this is reflected in increased rents. Mary St, College Green, Duke St and South Anne St have also seen new letting deals in the last six months. That’s according to the latest CBRE survey of the retail property market. At the end of June, the vacancy rate in Grafton St was 13.2% with 12 units vacant. Henry St vacancy was 11.9% with five units vacant. According to CBRE, prime rents have risen on both streets with prime Zone A rents on Grafton St up 8% to €515 per sq. ft. This renewed confidence in retail was also seen in Q2 investment deals with €128m worth of deals accounting for 40% of the total investment which was the highest proportion of spend for the first time since Q4 2016. The Irish Independent, 20th July



George’s Quay, Dublin 2 Corum Asset Management, the active Paris-based investor, has concluded two Dublin office purchases totalling over €110m. Henderson Park has sold a portion of its huge George’s Quay office complex to Corum. The French group is understood to have paid approx. €80m (NIY approx. 6%). Last week, Corum paid Spear Street Capital €33.4m (NIY 6.15%) for a 69,000 sq. ft building on the Cherrywood campus in south Dublin. Henderson Park attempted to sell George’s Quay, the largest single asset picked up by Nick Weber’s firm in the Green REIT portfolio it acquired in 2019 for €1.34bn, in September 2020 when it was launched to market with a €400m price tag. The complex – George’s Quay Plaza, George’s Quay House and George’s Court – totals close to 350,000 sq. ft. React News, 25th July



Dundalk, Co Louth The Tifco Hotel Group has secured approx. €11m from the sale of the Crowne Plaza Dundalk to East Coast Catering Ireland Ltd. The Crowne Plaza Dundalk briefly comprises 129 guest bedrooms and suites along with nine meeting rooms, conference facilities, a gym, a rooftop restaurant on its 13th floor, a bar/restaurant and coffee bar at ground-floor level, and a 160-space surface car park. The Crowne Plaza is East Coast Catering’s second hotel acquisition in Dundalk in recent years. Following its sale of the Crowne Plaza Dundalk, Tifco’s Irish portfolio now comprises 11 Travelodge hotels, the Crowne Plaza Dublin Airport, Crowne Plaza Blanchardstown, Hard Rock Dublin, the Holiday Inn Express Hotel at Dublin Airport, and the private label hotel Arthaus Hotel Dublin. The Irish Times, 19th July

St Stephens Green, Dublin 2 Eamon Waters’s Sretaw Hotel Group is seeking to build a 61-bedroom hotel opposite its existing Grafton Hotel close to St Stephen’s Green in Dublin. In the planning application, the group said it was not “speculative” and pointed to the need for more hotel rooms in the capital and the benefits this could bring to the housing market by freeing up Airbnb rentals. The proposed hotel would rise to eight storeys on a site known as Textile House on Johnson’s Place and Clarendon Market. It would represent an extension to the Grafton Hotel’s 127 bedrooms. Mr. Waters bought Textile House last year after it was put on the market for €6.5m. The Irish Times, 19th July

Cushman & Wakefield Report Hotel operators across the UK and Ireland consider Dublin city and Cork city to be attractive locations. Dublin was ranked the third most attractive location of the 20 UK and Irish markets surveyed as part of the report, with only London and Edinburgh ahead of Dublin. Cork was ranked joint 12th alongside Liverpool. The survey was conducted by Cushman & Wakefield among 33 international and regional hotel operators either currently operating in the UK and Irish markets or looking to move into these markets. The Irish Independent, 20th July

Tralee, Co Kerry Locals have objected to plans by Michael Healy-Rae, the Kerry TD, to add 15 bedrooms to a guest house he owns in Tralee that is accommodating Ukrainian refugees. A decision on Mr. Healy-Rae’s planning application, which would also add extra kitchen and dining space to Rosemont on Oakpark Road, Tralee, has been postponed by Kerry County Council, which is seeking additional information on the politician’s plans before making its decision. The proposed development would add five additional guest bedrooms on the ground floor, eight additional guest bedrooms on the first floor, and two additional guest bedrooms within the attic structure. The Irish Times, 23rd July



Ballycoolin, Dublin 15 Harvey has been instructed as the sole letting agent of Unit 200 Northwest Business Park in Ballycoolin, Dublin 15. The facility consists of two separate warehouse and office buildings, totalling 70,266 sq. ft on a site measuring 5.34 acres. Building 1 has a total size of approx. 58,340 sq. ft with an extensive profile to Mitchelstown Road. Building 2 makes up the remainder of the total area (approx. 12,000 sq. ft). The property is being offered to let in a single lot only, on a new medium to long-term lease. Harvey is quoting rent of €800k pa. The Business Post, 22nd July

Clondalkin, Dublin 22 Harvey has completed a sale and leaseback deal for €8.75m for Unit AF40 in the Cloverhill Industrial Estate, Clondalkin, Dublin 22 to French investor Iroko Zen who was represented by Colliers. The detached industrial and office facility, extending to 85,939 sq. ft on a site of 5.6 acres, was sold with the benefit of a 15-year lease to Alucraft Limited, with a guarantee from the Clarison Group. The lease incorporates a tenant-only break option at the end of year ten, and stepped rents over the term of the lease to include fixed uplifts and CPI-linked cap and collar reviews. The Business Post, 22nd July



House Prices The rise in the average price paid for a house has slowed for a 14th consecutive month, with house prices increasing by 2.4% nationally in the year to May. This is down from an increase of 3.4% nationwide recorded for April 2023, according to the most recent Residential Property Price Index (RPPI), with some housing experts suggesting the figures point to a stabilisation of prices in the property market. The cost of a home outside the capital increased by 4.5% in the 12 months to May, with the west of the country seeing the largest increase in prices at 5.7%. Meanwhile, prices in Dublin decreased by 0.2%. The Business Post, 18th July

Apartment Sales Taoiseach Leo Varadkar has said local authorities should be empowered to block the sale of apartment complexes to investment funds. In 2021, following controversy over the sale of a several housing estates in the Greater Dublin Area to investment funds, local authorities were granted powers to ring fence houses and duplexes in new housing estates for individual purchasers. The new laws, which do not currently cover apartments, mean that councils can essentially forbid the sale of homes in an estate to property investors and funds. Earlier this month, Darragh O’Brien, the Minister for Housing, told the cabinet that the measures introduced in May 2021 have ring fenced more than 31,000 houses and duplexes for individual buyers over the past two years. The Business Post, 22nd July

Housing Starts A fall in new housing starts this year is indicated by a new report despite recent Government figures on increased commencements. The new report, Construction Industry Forecast 2023-2025, expects the overall value of residential project starts to fall 5% this year to €3.96bn, after declining by 15% last year to €4.27bn. On the plus side, the value of residential project starts is expected to increase by 15% next year to approx. €4.55bn and rise a further 10% the following year to over €5bn. In contrast only last month the Government reported that 12,987 new homes commenced in the first five months of this year, a 7.4% increase on the similar period last year and the highest level in eight years. The €3.96bn investment in residential this year will account for more than half of all the €7.7bn invested in overall construction industry starts. The strongest growth this year is expected to be in the construction of industrial and logistics buildings with 15% growth to approx. €1.4bn. The Irish Independent, 19th July

Residential Construction Commencements Developers started construction on more than 15,000 homes in the first half of the year, new data from the Department of Housing has shown. Compared the first six months of 2022, the rate of new home commencements was up 10% this year. The Department of Housing said this rate of homebuilding in the first half of the year was a record when compared to similar periods since it started to collect the data in 2015. Last month, 2,574 units were commenced in Ireland by developers and people building one-off homes, up 25% on the same month last year. The Business Post, 20th July

Housing Assistance Payment (HAP) Only 50 properties in 16 areas were available to rent under the discretionary rate of the HAP Scheme if local authorities provided the maximum level of support, a report by a housing charity has found. The Simon Communities of Ireland’s quarterly Locked Out of the Market report, shows 50 properties were available to rent within a discretionary rate of the HAP Scheme over three dates in June. The report found 934 properties were available to rent at any price within the 16 areas over the three dates surveyed last month. This represents a 39% (262 properties) increase from the 672 properties that were available in the March 2023 Locked Out report. 74% of properties available to rent were located within the three Dublin areas studied. Just 5.4% of all properties available to rent in the study were available within the HAP rate. The Irish Times, 23rd July

The Land Development Agency, the State body charged with delivering affordable homes and social housing on public land, is to begin a programme of purchasing privately owned sites that can be utilised for quick delivery of public housing. The programme of land acquisitions will be open to all landowners, but will focus initially on large sites, with existing planning permission for 200-plus homes, near the five main cities of Dublin, Cork, Limerick, Galway and Waterford. It is expected to be of particular interest to developers sitting on large sites, either in anticipation of increasing value, or because they lack the finance or capacity to build them out. The agency has planning permission for more than 3,500 homes on State-owned lands with many projects already under construction. The Irish Times, 21st July

Blackrock, Co Dublin Having offered Rockbrook, the 91-unit high-end scheme Seabren Developments is developing in the south Dublin suburb of Blackrock to the market at a guide price of €59m last February, joint agents Cushman & Wakefield and Sherry FitzGerald are understood to have received several offers in and around the €54m mark for the portfolio. Seabren Developments is said to be weighing up its options in advance of the development’s practical completion in the final quarter of this year. Seabren acquired the 1.23-acre Rockpoint site for its part from Marlet Property Group in 2020 for approx. €7.5m. At the time of that sale the former Europa Garage lands had planning permission in place for a smaller development of 42 apartments and nine houses. Seabren went on to secure planning permission for the present scheme from An Bord Pleanála in 2021 in the face of objections from a number of parties. Aimed towards the upper end of the private rented sector market, the development will, upon completion, consist of a mix of one-bedroom apartments, two-bedroom apartments and three-bedroom units distributed across two blocks, along with 71 underground car-parking spaces. The Irish Times, 20th July

House Prices Dublin has seen the largest increase in house prices of any county in the Republic in the last 12 years, as the average price of a home in the capital has increased by 80%. A study conducted by self-storage company Storage World Self Storage has analysed data from the Property Services Regulatory Authority (PRSA) to track changes in average house prices between 2010 and 2022. The latest Residential Property Price Index released by the CSO earlier this week noted that property prices have increased by 2.4% in the 12 months to May 2023, although there was a small contraction of the Dublin market where house prices fell by 0.2% over the same period. The Irish Times, 19th July

VAT Reduction Government officials are weighing a VAT cut for home-building in a move that could boost supply and cut house prices, according to a new report. Builders have frequently called on Government to cut VAT on new home-building to 9% from 13.5% currently, arguing that this would reduce costs and spark an increase in residential construction. The Government’s Tax Strategy Group is considering the reduction and calculates that it could cost the State €400m a year, a report from the group published by the Department of Finance shows. However, officials question whether builders would pass on the reduction to home-buyers as tax law does not oblige them to do so. “There is a reasonable possibility that it would be used by contractors to improve their cash flow,” says the report. The Irish Times, 19th July

Terenure, Dublin 6W Planning delays have set back Lioncor’s plans for a 208 residential unit worth more than €100m for Terenure in Dublin by more than two years, the Dublin construction company has said. Lioncor welcomed An Bord Pleanála’s grant of permission for the 208-unit five block scheme rising up to six storeys on the ‘Carlisle’ site located to the north and east of the Ben Dunne Gym, at Kimmage Road West, Terenure in Dublin 6w. The LRD application – made up of 104 one-bed units and 104 two-bed units – by 1 Terenure Land Ltd was Lioncor’s second attempt to secure planning permission for the site. Lioncor secured planning permission for the scheme in 2022, which also contained 208 units for the same site, under An Bord Pleanála’s so-called fast-track process. However, that permission was challenged in the High Court by way of Judicial Review by the Kimmage Dublin Residents Alliance CLG. The Irish Times, 24th July

Newtownmountkennedy, Co Wicklow An Bord Pleanála has conceded in a challenge to its grant of permission for the construction of 179 homes in Co Wicklow. The High Court was informed that the board will not contest the application brought by two residents, seeking to quash the approval given to Dublin building firm Dwyer Nolan for 121 houses and 58 apartments at Newtownmountkennedy. The board accepted it referred to a local area plan that had expired by the time the planning permission was granted, the court heard. The Irish Times, 24th July

Holiday Homes for Refugees A Government scheme to encourage people to offer their holiday homes to Ukrainian refugees has fallen well short of its target. It had set a target of 20,000 holiday homes, or otherwise unoccupied houses and apartments, being pledged by individuals. The scheme was launched in November 2022 by Minister for Housing Darragh O’Brien and Minister for Children and Integration Roderic O’Gorman and backed up by an extensive media campaign. The Department said that as of the beginning of this week, 1,263 properties had been allocated, providing accommodation for approx. 4,000 Ukrainians who are beneficiaries of temporary protection in Ireland. In the run-up to the launch of the scheme an internal briefing document said there were more than 65,000 holiday homes in Ireland but most were being run commercially. The Irish Times, 20th July



Dundrum, South Dublin More than 200 Dundrum residents have attended a community meeting opposing Dun Laoghaire-Rathdown County Council’s redevelopment plans for the village and surrounding areas. The proposed changes in the Local Area Plan (LAP), will “kill off the village”, according to a group of local business owners. The plans will see restrictions on car access to the village, the introduction of new one-way systems and the extension of existing one-way routes, and a reduction in the number of access points to the Main Street. The Irish Times, 21st July

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

Origin Capital funds senior debt transactions in the CRE investment sector, typically in excess of €3m, and has lent over €200m to clients since April 2015.

Origin Capital is a wholly owned subsidiary of LeBruin, a leading provider of corporate finance solutions.

If you would like to discuss how Origin Capital can help with your funding requirements, please contact us on 01 662 9264.