25th May (Issue 298)
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.
HOSPITALITY
Pub Sales As the pubs sector gears up for its big reopening next month, estate agents are predicting a rake of sales, with a number of off- and on-market sales progressing. Among the off-market sales in the pipeline in Dublin, according to sources, are MB Slattery’s in Rathmines, the Wellington on Baggot Street and Water Lounge in Dun Laoghaire. These follow a changing of hands for the Brazen Head in the Liberties for a reported €15 million to Attestor Capital, a London-based private equity fund working with the hospitality entrepreneurs Ray Byrne and Eoin Doyle. Other pubs to sell this year include the 108 in Rathgar, the Magpie Inn in Dalkey and the Cabra House. Agents are optimistic that the city centre pub will make a comeback. Louis Fitzgerald, who lists Bruxelles, Kehoe’s and the Stag’s Head among his 16 pubs nationwide, is interested in adding to his city centre portfolio. Fitzgerald invested nearly €4 million on renovations during the lockdown, including at the Quays in Galway and An Poitin Stil in Dublin. The Sunday Times, 23rd May
Premier Inn, Dublin Whitbread, owner of Premier Inn, Britain’s largest hotel business, is pressing on with its expansion plans in Dublin city centre with three of its five pipeline hotels currently under construction. The company is targeting 2,500 Premier Inn hotel rooms in Dublin as it responds to a recognised undersupply of branded budget hotel accommodation in the city. A 97-bedroom Premier Inn on South Great George’s street will be the first of its city centre hotels to open later this year. Other planned locations include Gloucester Street, Newmarket, Castleforbes and Jervis Street. The Business Post, 23rd May
RETAIL
Aldi, Sandyford The prospect of eight years of secure investment income from the supermarket sector is expected to see strong interest in the sale of German retailer Aldi’s store in Sandyford, Dublin 18. The long leasehold interest in the property is being offered to the market by TWM at a guide price of €10.75 million. This provides a return of 5.1 per cent after standard costs of 9.96 per cent have been deducted. The Aldi store is located immediately opposite the Stillorgan Luas green line stop and is part of the Rockbrook development of apartments and retail units. Aldi is located beside Rationel Windows and Doors and EZ Living. The ground-floor purpose-built supermarket extends to 1,879sq m (20,226sq ft) with 100 basement car-parking spaces with travelator and lift access. Aldi has traded from the Sandyford unit since 2011 and its lease expires in 2036. There is a tenant break option in October 2029. The current passing rent is €603,376 per annum and the next rent review is October 2021. Rents are reviewed in line with the consumer price index, are compounded annually, and are subject to a yearly maximum increase of 4 per cent. The Irish Times, 19th May
Sports Direct, Galway Sports Direct is to open a new “mega-store” at the Corrib Shopping Centre in Galway city centre later this year. The 65,000sq ft outlet comprises four floors and had been occupied by Debenhams prior to the closure of its 11-store Irish network in 2020. The new store, which is currently being fitted out, is likely to include some of the group’s other product lines including clothing brand, USC, as well as its Brand Max concept. Sports Direct is making a significant investment in its new Galway premises and has plans for the creation of over 100 new jobs. The Irish Times, 19th May
Grafton Street, Dublin 2 Canada Goose is to leave Grafton Street after opening its first Irish store last December. The company follows Tommy Hilfiger in leaving Dublin’s premier shopping street in recent months. The Canada goose store will close in March next year. A spokeswoman for the group said the original plan when opening the Grafton Street store was for it to be a six-month “pop up” and the decision to remain until March 2022 was due to the strong response when the store was open prior to the closure of non-essential retail at the end of December 2020. According to Dublin town, a body representing 2,500 city centre firms, vacancy rates on Grafton street were around 18% before Covid restrictions were eased last week. They also stated that footfall on Grafton Street last year was c55% of the level at the same time in 2019. The Business Post, 23rd May
OFFICE
Fitzwilliam St Upper, Dublin 2 Agent BNP Paribas Real Estate is guiding a price of €2.375 million for No 12 Fitzwilliam Street Upper in Dublin 2. Located next to Fitzwilliam Square in the city’s central business district and within walking distance of Government Buildings, St Stephen’s Green, Merrion Square and Grafton Street, the subject property comprises a four-storey over-basement Georgian building of 376sq m (4,047sq ft). The property also includes a two-storey mews building to the rear with two car parking spaces accessed via Pembroke Lane. While the building is laid out as an office currently, it retains numerous original features and could, according to the selling agent, be converted easily for residential use. No 12 Fitzwilliam Street Upper is being offered to the market with the benefit of full vacant possession. The Irish Times, 19th May
Navigation Square, Cork French property company Corum Asset Management, on behalf of its fund, Corum XL, has agreed to buy the NSQ1 building at O’Callaghan Properties’ Navigation Square development in Cork city docklands. The deal, which is understood be valued at about €60 million, brings Corum’s overall investment in the Irish market to date to just under €290 million. The NSQ1 building in Cork is the first of four buildings which make up O’Callaghan Properties’ 360,000sq ft Navigation Square, the city centre’s largest office development. Two blocks are already built and construction of the third is expected to commence by the end of the current year. Navigation Square is a 2.25 acre site bounded by Albert Quay to the north, Victoria Road, Albert Road and Albert Street. The project will be capable of hosting some 3,000 employees when fully occupied. The development includes roof terraces with spectacular views of the city and port and has 100,000sq ft of basement parking for cars, bicycles and motorcycles. Corum’s acquisition of NSQ1 was described as “a really positive endorsement for Cork and for the city’s docklands” by Brian O’Callaghan, managing director of O’Callaghan Properties. The Irish Times, 21st May
Peleton, Cork Peloton is weighing plans to take on up to 70,000sq ft (6,503sq m) of office space in Cork to facilitate a major expansion of its European operations. The at-home fitness company is understood to have issued a request for proposal (RFP) through the London office of CBRE in recent weeks to several commercial real estate advisers in the city with a view to accommodating up to 700 workers there. While Peloton currently offers customer support to its indoor-cycling members through outsourcing specialist firm Voxpro in its headquarters at City Gate in Mahon, its initiation of a search for office space of its own will be welcomed by Cork’s commercial property sector and the city’s wider business community. The Irish Times, 19th May
Canal Road, Dublin 6 The Construction Industry Federation (CIF) and the Construction Workers Pension Scheme (CWPS) are understood to have secured about €23 million from the sale of the CIF’s headquarters on Canal Road in Dublin 6. The building and its site have been purchased by the international property developer, Osborne + Co, with property veteran Tom Hamilton in place as the company’s managing director in Ireland. Osborne’s acquisition of the site, known as ‘Canalside’, represents its second deal to date in the Irish market. Osborne’s plans for its latest acquisition meanwhile will see the demolition of the CIF’s 1980s headquarter building, and its replacement with 147,000sq ft of Grade A office space. Some 17,000sq ft of this will be contained in a new building to be retained by the CIF under the terms of the deal. The vast majority of the space – 130,000sq ft – will be contained in a second office building which is expected to come to the market in early 2024. A planning application for the development is set to be submitted in November of this year. The masterplan architects on the project are Reddy Architecture and Urbanism. The Irish Times, 19th May
Hibernia REIT Commercial property company Hibernia Reit has entered an agreement to issue €125m of new unsecured US private placement notes. The issue comprises equal amounts of 10- and 12-year notes with an average fixed coupon of 1.9pc. The notes have been placed with five institutional investors, all new lenders to Hibernia. The new funding has been earmarked to fund the development of their new office clusters at Clanwilliam Court and Harcourt Square. Hibernia Reit’s weighted average debt maturity at 31 March was 3.4 years and cash and undrawn facilities, net of commitments, amounted to €110m, according to a statement from the group. Adjusting for the new notes, the weighted average debt maturity at the same date is extended to 5.2 years and cash and undrawn facilities, net of commitments, increases to €235m. The Irish Times, 21st May
INDUSTRIAL
Yew Grove Stock market-listed property investor Yew Grove Reit is buying an industrial building in Dundalk and two office properties in Dublin for a combined total of €19m. In Dundalk, the company has exchanged contracts on Tanola House on Coes Road. This is a recently constructed industrial building of 86,451 sq ft over two adjoining blocks. The premises comes with 120 car-parking spaces and is tenanted by a US multinational under two leases, which together have a weighted average unexpired lease term (WAULT) to first break of approximately 8.4 years and a WAULT to expiry of 18.4 years, according to a statement from Yew Grove. Tanola House was acquired for around €8m, with a current annual rent of €601,000 increasing in approximately four years across both leases to €631,000. This represents a net initial yield of 6.9pc, rising to 7.3pc at the increase. Yew Grove has also exchanged contracts to purchase Blocks E&F, Citywest Dublin, for €11m. On completion of these deals, Yew Grove will have a portfolio of 24 properties with a proforma gross asset value of approximately €162m, which will rise to an estimated €172m on completion of a forward funding transaction in Athlone, according to the group. The company has a current annualised rent roll of approximately €12.9m. Irish Independent, 22nd May
Mountpark, Baldonnell Home Store + More and Mountpark Logistics have reached an agreement on a lease for Unit C at Baldonnell Business Park in Dublin 22. This is the second letting by Mountpark to the house wares retailer in two years. Unit C is under construction and will extend to 8,210 sq. m (c88,000 sq. ft) with completion scheduled for December 2021. Home Store + More also has a long lease on Unit B, which was officially opened in September 2019 and supplies all 22 of its branches in Ireland from this national logistics centre. The Business Post, 23rd May
RESIDENTIAL / LAND
Dublin Docklands An Bord Pleanala has refused Johnny Ronan planning permission for his planned 40-plus storey tower scheme for Dublin’s docklands. The appeals board has refused planning permission for Mr Ronan’s 1,005 unit apartment Waterfront South Central scheme after concluding that it is precluded from granting permission after a High Court ruling last November. The appeals board found that as a result of the High Court ruling by Mr Justice Richard Humphreys, the board does not have jurisdiction to materially contravene the North Lotts and Grand Canal Dock Planning Scheme under Strategic Housing Development legislative provisions. The scheme imposes strict height limits and the 44 storey and 45 storey heights proposed were well in excess of what is allowed in the area. As part of a 63 page planning report lodged with An Bord Pleanala, the planners stated Mr Ronan’s scheme represents overdevelopment and is “an inadequate design response to this sensitive site, would be of insufficient architectural quality, and if permitted would result in a poor placemaking outcome”. Irish Independent, 21st May
Marlet Sale The sale by developer Pat Crean’s Marlet Property Group of its Castle residential platform is preparing to move into the second round of bidding following the receipt of numerous offers in excess of the €1 billion that sole adviser Cantor Fitzgerald had been seeking when they brought the portfolio to the market in March. Upwards of a dozen parties are understood to have expressed their respective interest in acquiring the private rented sector (PRS) platform in advance of its delivery by the developer between July 2021 and March 2024. Upon completion, the Castle portfolio will comprise some 2,000 apartments and duplexes distributed across six sites in the capital. The Irish Times understands the list of those to have expressed their interest includes Kennedy Wilson, Axa, Blackstone, Union Investment, Angelo Gordon, Cortland, Nuveen Real Estate, Lone Star, Greystar, and a joint venture involving Orange Capital Partners and GIC. The Irish Times, 19th May
Carrickmines, Dublin 18 Developers and investors looking to take advantage of the ever-present demand for housing in south county Dublin will be interested in the opportunity presented by the sale of a residential development site in Carrickmines. Located just off the Glenamuck Road and to the rear of the established Cairnbrook scheme, the subject property comprises 3.07 hectares (7.53 acres) of residential zoned land, and is being offered to the market by agent Colliers at a guide price of €9 million. A feasibility study prepared by architects O’Mahony Pike suggests the site could accommodate 149 residential units (€60.5k per site) comprising a mix of 54 terraced houses, 87 apartments and eight duplex units arranged in a single three-storey block. The subject site is located just 11km from Dublin city centre and is readily accessible thanks to its close proximity to both the M50 motorway and N11, and the Luas green line stop at Ballyogan Wood. The Irish Times, 19th May
Galway Site Strong interest is expected from home builders and developers at both a local and national level in the sale of prime residential lands on the outskirts of Galway city. Located on the Ballymoneen Road in the western suburb of Knocknacarra, the subject site comprises 9.079 hectares (22.43 acres) and comes with full planning permission for the development of 238 residential units, retail space and a crèche on its southern portion, and with potential for an additional 58 units on its northern portion, subject to the receipt of planning permission. The lands are being offered to the market by agent DNG Maxwell Heaslip & Leonard at a guide price of €11.5 million (c€513k per acre). Situated in an area which has undergone significant residential development, the approved scheme includes a mix of semi-detached houses and duplexes together with a number of apartment blocks which the selling agent says will have “commanding views over the city to Salthill and Galway Bay”. The Irish Times, 19th May
MIXED-USE
Little Island, Cork Unit 34 GB Business Park in Little Island, Cork is being brought to the market by Cork auctioneers Casey & Kingston quoting €4m. The building is let to BioTector Analytical Sustems/Hach on a 10-year lease with a fixed rent of €240k pa with no breaks. The detached building extends to 2,866 sqm on a secure site of 1.55 acres. The space is divided between offices, a production area (with temperature controlled Hepa filtration) and warehousing, which has a grade level roller shutter door and a separate dock leveller. The Business Post, 23rd May
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