26th April (Issue 43)

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.




Projects Emerald and Ruby: Last Thursday was the deadline for first round bids for NAMA’s Projects Emerald and Ruby, which have a combined par value of c. €4.7bn. It is understood that the initial bidders for the portfolios include Deutsche Bank, Lone Star, Cerberus and a joint bid from Goldman Sachs and CarVal. The portfolios are expected to sell for c. 10c in the Euro. The Irish Times, 22nd April



Childers Road: Irish Life look set to expand on their €2.5bn Irish commercial property portfolio after being chosen as the preferred bidder for Childers Road Retail Park in Limerick. Irish Life is understood to have bid just under €46m for the retail park, which is nearly €2m above the guide price. The underbidders for the retail park, which has an annual rental income of €3.22m, were a private individual and Savills Investment Managers. The Irish Times, 20th April

Stradbally Shopping Centre: Lisney has set an asking price of €3m for the nine year old Stradbally Shopping Centre in Co. Laois. The property consists of nine retail units, 15 apartments and 80 car spaces, however only ten of the apartments are included in the sale. The total rental income from the commercial units is c. €241k p.a., with Supervalu being the anchor tenant. The total rental income from the apartments is c. €44k p.a., with one apartment still in a shell and core condition. The €3m sale price equates to a net initial yield of 9.08%. The Irish Times, 25th April

Blanchardstown Shopping Centre: The shortlist of bidders for Blanchardstown Shopping Centre has reduced to two after second round bids were submitted last Wednesday. Both Blackstone and the Canada Pension Plan Investment Board have progressed to the final round. The shopping centre, which has an annual rent roll of c. €50m, is valued at c. €1bn. The Irish Times, 23rd April



12 / 13 Exchange Place: QRE has set an asking price of €4.3m for a four storey office block located at 12 / 13 Exchange Place in Dublin’s IFSC. The 11,351 sq. ft. office block is fully let and six car spaces are also included in the sale. At the current annual rental income of c. €291k, the sale price equates to a net initial yield of c. 6.5%. The tenants include Reuters, Elix Aviation and Willis Mitsui. The Irish Independent, 24th April

Markland Group Complex: CBRE is quoting €24m for a high quality office block and three former distillery buildings (converted for office and residential use) known as the Markland Group complex at Fumbally, Dublin 8. The complex will show an initial yield of 7.25%, and the new owners will have an opportunity to strengthen returns by increasing rents, leasing currently unoccupied space (which would drive the current rent roll of €1.7m to over €2m), and renewing planning permission for a further 16 apartments which lapsed in 2002. The current tenants include FCR media, CMC Coal Marketing company and Infineon Technologies. The Irish Times, 20th April

1SJRQ Building: Joint agents JLL and DTZ have begun seeking tenants for Hibernia REIT’s new 1SJRQ building, which is under development at 1-6 Sir John Rogerson’s Quay in the south Dublin docklands. The 110,000 sq. ft. building is scheduled for completion in mid-2018, and will form part of a quadrant of buildings Hibernia owns in the area around Windmill Lane. Nearby is another of Hibernia’s development projects, 1WML (120,000 sq. ft.), which is being developed in a joint venture with Starwood Capital. The Irish Times, 20th April

Setanta Centre: The Sunday Business Post reports that Larry Goodman is contemplating the sale of the Setanta Centre, which is located on Nassau Street in Dublin 2 and is understood to be worth c. €100m. The paper also reports that the Hardwicke Group has held preliminary discussions with Goodman about acquiring the asset. The Setanta Centre is a mixed use office and retail building which Goodman purchased in 2003 from Green Property for c. €85m. Should Goodman decide to dispose of the asset, then it will be his second time doing so, after he sold the property to Green in 1993. The Sunday Business Post, 24th April

Heather House: DTZ is managing the sale of Heather House, a multi-let office building in Sandyford, Dublin 18, which has a price tag of over €6.5m. There are currently eight tenants in situ in the four storey over basement building, which extends to 38,740 sq. ft. There are also 79 car spaces included in the sale. The current rent roll is c. €456k p.a., offering investors an initial return of 6.71%. The capital value of the property equates to c. €167 psf. The Irish Times, 20th April



Burlington Hotel: Blackstone has retained Savills to handle the off-market sales process for the former Burlington Hotel in Dublin 4, with offers in the region of €140m being sought. Blackstone acquired the hotel in November 2012 for c. €67m, and spent an additional €16m in giving the hotel a complete overhaul. The 501-bed hotel currently trades as a DoubleTree by Hilton, however potential bidders can acquire the asset with or without the DoubleTree management agreement. The hotel sits on a 3.8 acre site and was previously acquired by Bernard McNamara in 2006 for €288m. The Sunday Times, 24th April

Kilronan Castle and Lough Rynn Castle: The continued recovery in the hotel sector has been further evidenced by the sale of Kilronan Castle in Co. Roscommon and Lough Rynn Castle in Co. Leitrim, which have sold for nearly €6m above their asking price. The two hotels were placed on the market in 2015 with a combined price tag of €8m, however they have now been purchased by a group of Irish investors for almost €14m. Kilronan Castle has 84 beds while Lough Rynn has 44 beds. There are also 16 holiday homes included in the sale, with the homes based on the 260-acre Lough Rynn estate. The Sunday Times, 24th April

Montenotte Hotel: The Montenotte Hotel in Cork is to undergo a €5m refurbishment which will see all of its 107 rooms being upgraded. The hotel is also to be extended, and some of the new facilities lined up include a new bar and restaurant, a private cinema, a library and additional conference facilities. There will also be an outdoor terrace built which will cover the full length of the hotel. The hotel is currently owned by Choice Hotels, which is run by Frankie Whelehan. The Irish Independent, 22nd April

Fashion House: Goldman Sachs, along with their hotel operator subsidiary Tifco, is planning to expand their newly acquired Parliament Hotel, which is located on Lord Edward Street. Goldman Sachs is seeking to acquire the adjacent Fashion House to facilitate the expansion. Once the transaction is complete, Goldman Sachs will seek to convert the three-star, 64 bed Parliament Hotel into a four star, 127 bed hotel. Fashion House is currently owned by the Fitzgerald Group. The Sunday Business Post, 24thApril

Viking Hotel: JLL, under the instruction of the receiver Deloitte, is guiding in excess of €4m for The Viking Hotel in Waterford city. The three star, 98-bed hotel is located on the Cork Road, near the Waterford by-pass. The current operator of the hotel is the Prem Group, however the hotel is being offered for sale with full vacant possession. JLL are anticipating significant interest in the hotel given its strong cash flow and improving trading performance. The Irish Times, 20th April



Roslyn Park: Roslyn Park, one of the best remaining residential sites in Dublin 4, has come on the market with a price tag of €12m (€2.33m per acre). The 5.16 acre site in Sandymount fronts onto Seaford Avenue, Newgrove Avenue and Beach road, and is expected to facilitate a mixed development of high-end apartments and town houses. The site is currently owned and occupied by the Rehab Group. As a condition of the sale, developers are being asked to allow the Rehab Group to occupy their offices for four months following the closing of the sale. Joint agents Lisney and Savills describe Roslyn Park as one of the finest development opportunities to be offered for sale in the Dublin suburbs in recent years. The Irish Times, 20th April

Richmond Cheshire Home: An unnamed developer has paid over €5m (€2.14m per acre) to acquire the Richmond Cheshire Home near Monkstown Village in south Dublin. The Richmond Cheshire Home sits on a 2.34 acre site which could facilitate up to 48 apartments. The primary property on the site at present is a single storey complex with 18 bedrooms, and there are also five studio apartments to the rear. The seller is the Cheshire Foundation, who is following the HSE policy of moving service users with disabilities from a central location into the community. The Irish Times, 20th April

Mount Merrion Developments: Two new apartment complexes are being lined up in Mount Merrion, south Dublin, in what would be the first developments completed in the area in c. 30 years. The first scheme is a 42-unit, seven storey block, which will be built on the site of Flanagan’s furniture shop. The second development is proposed on the site of Union Café / Kennedy’s. The owners of this site are currently in discussions with residents to determine the most suitable scheme for the site, however it is envisaged that planning permission for c. 70 units will be sought. The Irish Times, 21st April

Residential Property Sales: Property funds have spent more than €1.9bn purchasing thousands of houses and apartments throughout the country in recent years. An analysis of transactions shows that almost 9,000 units have been purchased in 300 deals since 2010. The units were sold by a variety of interests, including receivers, the banks and NAMA. The vast majority of purchases (7,500) were in Dublin, Cork and Galway. The record year for sales was 2014, when €666m of transactions were completed, and €140m of sales have been completed so far this year. The background for these sales is the ongoing housing crisis, where last year only 12,000 new homes were completed, significantly below the 25,000 required to keep pace with demand. The Irish Independent, 23rd April



Smurfit Buildings: Knight Frank is quoting €6.25 million for two industrial buildings rented by Smurfit at Lower Ballymount Road, Dublin 12. The investment will show a yield of 10%. The two detached units extend to 27,000 sq. ft. and 59,500 sq. ft. The larger building is let to Smurfit Irish Paper Sacks under a 25 year lease from 2005 at c. €619k p.a. The smaller unit is currently vacant and is expected to rent for c. €95k p.a. when a suitable tenant is found. The Irish Times, 20th April

Mater Private: The German healthcare firm Fresenius is understood to have been chosen as the preferred bidder for the Mater Private group, and will pay c. €500m to complete the transaction. The Mater Private group is 51% owned by CapVest, with the remainder split between management (32%) and staff (17%). Fresenius is a publicly listed firm with 111 medical centres and seven hospitals in Germany. Their acquisition of the Mater Private group will be their first outside of Germany. The Sunday Business Post, 24th April

Commercial Property Returns: JLL’s Q1 2016 report on the Irish CRE market shows that commercial property values rose by 2.6% in the quarter. Prices at the end of Q1 2016 were 18% higher than they were 12 months ago. The best performing sector was industrial, where prices rose by 9.8% in the quarter and have risen by 32% in the past year. JLL also report that CRE rents increased by 3.5% in Q1 2016 and have now risen by 16% in the past twelve months. The best performing sector in the quarter was office, where rents rose by 4.4%. NAMA Wine Lake, 24th April



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 the €3m – €15m range. If you would like to discuss how Origin Capital can help with your funding requirements, please contact us on 01 662 9264.

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