25th October (Issue 370)
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
IFSC, Dublin 1 Having paid €65.3m to acquire New Century House in Dublin’s IFSC from Hibernia Reit in 2018, Credit Suisse has secured 96% occupancy at the fully refurbished and now-renamed Dockline building. The 80,000 sq. ft. property commands rents predominantly in the range of €53.50 to €54 per sq. ft. Workday is the largest tenant with 54,000 sq. ft. of office accommodation across the first, second, third and fifth floors of the building. The company signed a 10-year lease in July and is currently in the process of fitting out its new space. Swedish multinational Sandvik is the second-largest occupier, after signing a 15-year lease in April for 13,335 sq. ft. of space on the fourth floor, while Swiss asset manager GAM Funds agreed in July to occupy 5,572 sq. ft. on the ground floor on a new 10-year lease. Bank of Ireland occupies part of the ground floor accommodation. The remaining 3,000 sq. ft. at the Dockline is available to let through joint agents JLL and CBRE at a quoting rent of €54 per sq. ft. The Irish Times, 19th October
Mount Street Upper, Dublin 2 Colliers is guiding a price of €2.5m for a Georgian building primed for either office or residential use in the heart of Dublin’s political beltway. No. 32 Mount Street Upper comprises an own-door, end-of-terrace, four-storey over-basement property with a two-storey mews at the rear of the site, extending in its entirety to 5,253 sq. ft. The main building measures 4,366 sq. ft. Planning permission was granted in August 2018 for the replacement of its “existing 323 sq. ft. substandard, single-storey prefabricated structure at basement level”. The rear mews meanwhile extends to 887 sq. ft. and has full planning permission for change of use from office to dwelling house. The Irish Times, 19th October
Kildare Street, Dublin 2 US real-estate firm Kennedy Wilson has signed three new leases covering a total area of 49,253 sq. ft. of office space at 20 Kildare Street in Dublin city centre. The newly refurbished property is now 76% occupied by law firm Dentons (19,175 sq. ft.), aviation lessor Aircastle (15,861 sq. ft.), and US investor Davidson Kempner (14,217 sq. ft.). The redevelopment is expected to generate a yield on cost in excess of 7% once the remaining 16,000 sq. ft. is leased and the project is fully occupied. The Irish Times, 19th October
Wilton Place, Dublin 2 LinkedIn has confirmed it is scaling back plans to expand its Dublin offices, as remote working reduces demand for space. The company had planned to open a European headquarters campus at Wilton Park, confirming in January 2020 it had signed a long-term lease with property company Iput for c. 430,556 sq. ft. of office space at the Dublin 2 scheme. That included Two and Three Wilton Park, which are located immediately beside LinkedIn’s existing European headquarter offices at Wilton Place, along with Four Wilton Park. The buildings are due to be completed in 18 months. The company will still move into One Wilton Park, a 150,694 sq. ft. building that was fully let to LinkedIn in 2018 but plans to expand beyond that have been curtailed. Although LinkedIn has not commented on future plans, it is understood the company will still occupy Four Wilton Park when it is completed, estimated to be 2025. The Irish Times, 21st October
RETAIL
Abbey Street Upper, Dublin 1 Fast-growing fashion retailer Tessuti is to open its first Irish store at the Jervis Shopping Centre in Dublin. The company, a subsidiary of the JD Group, has agreed a deal for the 21,500 sq. ft. space formerly occupied by Topshop. The new store, which is set to open for business in early 2023, will stock a range of designer brands for men, women and children including Polo Ralph Lauren, Emporio Armani, Billionaire Boys Club, Mallet, Moose Knuckles and Versace Jeans Couture. The Irish Times, 19th October
HOSPITALITY
Rising Costs One of the country’s largest hotel chains is adding €10 per room per night to cover the cost of its soaring energy bills and about the same again to cover wage inflation and increased food and beverage costs. Sean O’Driscoll, co-founder and a director of Cliste Hospitality, said its energy bill would double this year to €4.2m when compared with 2019, its last full year of trading before the pandemic. Mr O’Driscoll said the group had also experienced increases of 15-20% in its food and beverage costs and “substantial” wage inflation. “For a hotel to stand still, it probably needs to add at least €20 in rate [per night] just to cover the inflation environment at the moment.” The Irish Times, 19th October
INDUSTRIAL / LOGISTICS
Clondalkin, Dublin 22 KKR and Palm Capital have purchased Cloverhill Industrial Estate in Clondalkin, Dublin 22 for €17m. The sale represents the third and final disposal of the assets offered for sale last November as part of the €48m “Novelty Portfolio”, a mix of industrial and office properties distributed across three locations in Dublin and Galway. KKR and Palm Capital have secured ownership of c. 210,000 sq. ft. of industrial and warehousing accommodation. At the time of being offered for sale by Harvey, c. 85% of the facility was occupied by Primeline VNE while the remaining 15% was occupied by Broderick Bros Limited on a lease that offers a rent review in November 2023 and a mutual break option in November 2025. The Irish Times, 19th October
Industrial Land Zoning Not enough land is being zoned for Irish logistics and warehousing, worsening a supply crunch and pushing up prices, a report has found. Data centres and foreign multinationals are crowding out indigenous industrial firms, particularly in south Dublin, consultants Octavian Economics said in a report. Despite massive population growth and record high exports, imports and jobs, there has been no growth in land zoned for “enterprise and employment” by local authorities. “With a third of a million more people since 2017, an economy that is 70% bigger and a rise in trade volumes equivalent to the preceding 40 years, a massive surge in economic activity is happening that is not being accommodated by zoning of new lands for enterprise and employment,” said Marc Coleman, founder of Octavian Economics. The population has grown by 361,671 since 2016, according to the census, twice the rate of the previous five years. Employment is now at a record 2.5m people. Goods exports amounted to more than €165bn last year, CSO figures show – a new high. The Irish Independent, 24th October
RESIDENTIAL / DEVELOPMENT
Parkgate Street, Dublin 8 Chartered Land is understood to be in talks with the Royalton Group, the UK-headquartered property investor and developer, in relation to the potential sale of the “Hickeys site” on Dublin’s Parkgate Street. News of the negotiations comes just weeks after it emerged that the German-headquartered investor Commerz Real had pulled back from its plan to provide c. €200m in forward funding for the construction of a 30-storey 322.83 ft. residential tower on the 1.65-acre holding. While a potential sale price for the Parkgate site remains unclear, Chartered Land paid in excess of €30m — or just under €18.2m per acre — to secure ownership of the property in 2018. The figure represented a premium of 50% on the €20m price agent Finnegan Menton had been guiding at the time. The Irish Times, 19th October
St Stephen’s Green, Dublin 2 A company owned by father-and-son property developers Charles and Max O’Reilly Hyland is planning to build a 130-bedroom hotel on St Stephen’s Green in Dublin. The developers bought Nos. 92 and 93, a pair of interconnecting Georgian properties backing on to Iveagh Gardens, for c. €18m last year. ORHRE SSG, the company controlled by the O’Reilly Hylands, has applied to Dublin City Council for permission to turn No. 92 into five apartments and to change the use of No. 93 from offices to a hotel, while also building a part-six-storey, part-eight-storey-over-basement hotel to the rear. If permitted, the hotel will include a spa and restaurant. The Sunday Times, 23rd October
Housing Construction More than 17,000 homes, which are connected to projects delayed for more than two years, would be available to the government if it pursues plans to buy up dormant housing projects, new analysis has shown. Since the beginning of 2018, 18,952 houses and 65,597 apartments – in large residential developments of at least 100 units – have been granted planning permission. During that same period, 17,813 student beds have been approved. The Dublin Democratic Planning Alliance’s (DDPA) research found that a significant proportion of those projects had not been commenced. Despite the legal obstacles faced by many housing developers who have proposed to build new residential developments, plans for a total of 60,213 homes are currently unaffected by judicial reviews. More than 17,000 of these 60,213 homes have been dormant for more than two and a half years. The DDPA research showed that developers had been granted planning permission for 28,504 houses and apartments between the beginning of 2018 and March 2020 but had only commenced 38% of them. In the same period, permission was granted for 10,437 student beds, but only 35% of the units proceeded to the development stage. The Business Post, 22nd October
Vacant Homes, Ireland Homeowners will have to show the Revenue Commissioners their electricity, gas and waste bills to avoid paying the vacant home tax on properties they own. Revenue has put in stringent requirements for householders who want to claim the available exemptions, such as a house being lived in for at least 30 days a year, being for sale or rent, or undergoing repairs. The vacant home tax, which will be three times the local property tax bill, is aimed at pushing owners to either renovate or sell their empty properties. The Business Post, 22nd October
Crumlin, Dublin 12 An Bord Pleanála has given the green light to a fast-track,145-unit residential scheme in Crumlin in south Dublin despite local opposition. The scheme, to the southwest of St Agnes Road in Dublin 12 is being developed by Seabren Developments which is led by Michael Moran of Moran’s Red Cow hotel. It consists of two apartment blocks ranging in height from four to six storeys containing 145 apartments. The Irish Times, 21st October
Malahide, Co Dublin A ready-to-go residential site in Malahide, Co Dublin has come to the market with planning permission for 47 houses. Located in Streamstown to the south-west of Malahide village, the green-field site extends to 6.55 acres. CBRE is guiding over €8.75m (€186k per house) for it. The Irish Independent, 20th October
Dundrum, Dublin 16 The Hammerson and Allianz Real Estate joint venture, Dundrum Retail Limited Partnership (DRLP), has commenced construction work on 122 apartments along with other facilities on a site at Sandyford Road next to Dundrum Town Centre. To be known as The Ironworks, it will also include co-working space, a residents’ lounge, gym, panoramic terrace and a new coffee shop. The development is due to be completed by 2025. The Ironworks apartments will include only one studio. The others will include 50 one-bedroom units and 56 two-bedroom units at the Ironworks site while the remaining 15 will be one-beds located in Dundrum Town Centre. In addition, c. 2,000 sq. ft. will be devoted to co-working space, 4,000 sq. ft. to a residents’ amenity and lounge space and 2,000 sq. ft. to a terrace. The Irish Independent, 20th October
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