27th June (Issue 102)

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.




I Care Housing: The Sunday Business Post reports that David Hall is close to signing up to a c. €100m financing deal with British lenders, as part of his plan to purchase thousands of troubled mortgages in Ireland. He will deploy the funds for phase one of I Care Housing, a mortgage-to-rent scheme which he hopes to have fully operational by October. It is proposed that I Care Housing will purchase the properties of borrowers who qualify for social housing and then allow them to remain as tenants with rents subsidised by their local authority. Subject to certain conditions, the tenants would also be allowed to buy back their houses. Mr Hall, who has long been an advocate for distressed borrowers through the Irish Mortgage Holders Organisation, is also seeking funding of c. €250m for the second phase of the project, which will also involve buying distressed mortgages. He is in early stage negotiations with two unnamed British lenders for this phase, and is also in advanced negotiations with three financial institutions (reportedly including AIB) who are expected to sell of thousands of non-performing mortgages. The Sunday Business Post, 25th June

KBC Impaired Mortgages: KBC Bank Ireland’s chief executive Wim Verbraeken has indicated that the bank may sell some impaired mortgages in the future as it comes to the end of restructuring loans, and as banks face increasing regulatory pressure. Mr Verbraeken advised that the bank may sell non-performing loans (NPLs) if it concludes that there is no additional value to be extracted from restructuring NPLs. KBC has the highest level of impaired loans in Ireland among retail banks, with over 40% of KBC Bank Ireland’s c. €12.4bn primarily mortgage-dominated loan book classified as impaired. However, Mr Verbraeken advised that the high portion of impaired loans is a consequence of the bank applying the strictest classification towards NPLs in the country. Although the ECB has pressed domestic Irish banks to formulate plans to reduce NPLs in recent months, the chief executive expects that the ECB won’t engage with KBC until H2 2017, as the overall level of troubled loans in the wider KBC Group is below the Eurozone average. The Irish Times, 21st June



Department of Justice and Equality HQ: Savills are guiding €20m for 94 St Stephen’s Green, which currently houses the headquarters of the Department of Justice and Equality. The premises is being sold by the investment group SW3 Capital, and consists of a series of relatively modern buildings which were developed behind the former façade of the Centenary Church of Ireland. The property, which extends to 22,249 sq. ft., is let to the Office of Public Works (OPW) under two co-terminus leases which generate a combined rent of c. €1.02m p.a. (c. €46 psf). The Irish Times reports that investors planning to pitch for the property will be well aware of the redevelopment and extension opportunities which exist after the current leases run out in June 2018. The €20m asking price reflects an initial yield of just under 5%, and a capital value of €899 psf. The Irish Times, 21st June

Baggot Street: Esprit Investments, a private Irish investment company, has paid c. €7.1m for three modern office buildings at 117 – 119 Lower Baggot Street in Dublin 2. Based on the purchase price and the current rent roll of c. €380k p.a. (c. €26 psf), the property will provide an initial yield of c. 5.4%. The four-storey over-lower ground floor property extends to 13,296 sq. ft. and includes 10 car spaces. Tenants include Hooke & MacDonald, CBRE, Brompton Recruitment and the Irish Mortgage Corporation. The Irish Times, 21st June

Maynooth Business Campus: Savills, acting on the instructions of the receiver Grant Thornton, are guiding €4.65m for a partially occupied office building at the front of Maynooth Business Campus in Co. Kildare. Block C is producing net rental income of c. €388k p.a., however there is scope to increase this to over €600k p.a. once the remaining space on the ground floor has been fitted out and rented. Based on the current rental income, the net initial yield will be c. 8%, however this should increase to c. 10% once the block is fully let. Capita Asset Services occupy c. 70% of the property under two separate leases, with the company’s lease on the second floor running for 10 years from 2010 (including a five-year break option which was not exercised), while their lease on the first floor runs for 10 years from 2016, with a five-year break option. This gives a weighted average unexpired lease term of c. 3.8 years, based on the earliest termination, and c. 6.3 years based on lease expirations. Block C was built in the early 2000s and extends to 58,000 sq. ft. with 150 parking spaces. The Irish times, 21st June

The Exchange: The Food Safety Authority of Ireland (FSAI) is set to become the first tenant to occupy The Exchange, a new c. €80m office building currently under construction in Dublin’s IFSC. The FSAI will occupy 19,041 sq. ft. on the first floor of the six-storey over-basement building, which will have an overall capacity of 105,000 sq. ft. As the first tenant, the FSAI will pay a rent of c. €50 psf under a long-term lease, with a break option in the 15th year. The FSAI is currently located at the Abbey Court in the Irish Life Centre, where its lease is due to end shortly. Joint agents Savills and JLL are continuing to market the remaining space in The Exchange at a rate of €52.50 psf. The Irish Times, 21st June

Charlemont Place: The technology company ViaSat has agreed to lease the entire of a recently developed office block by Rohan Holdings at Charlemont Place in Dublin 2. ViaSat has agreed a 12-year lease for the 37,000 sq. ft. property, for a rent of c. €55 psf. However since ViaSat initially only requires c. 15,000 – 20,000 sq. ft. of space, it will sublet the remainder of the property. Rohan Holdings previously paid c. €6.5m to acquire the site, which was the former HQ of McConnells Advertising. The Irish Times, 21st June



Premier Inn Expansion: The Sunday Times reports that Premier Inn, the UK’s largest hotel chain, is planning to expand its presence in Dublin with up to 1,500 bedrooms. The three-star brand is reportedly in negotiations with owners of sites in Dublin 1 and Dublin 2, where the company wants to secure five or six properties through 25-year lease agreements. Sites with and without planning permission are being considered, and developers and investors have been invited to a launch event in Dublin on the 5th of July, when details of the company’s expansion plans in the city will be announced. The Sunday Times, 25th June 

JD Wetherspoon Hotel: Pub group JD Wetherspoon is set to spend c. €15m on the development of a 98-bedroom hotel and ‘superpub’ on Camden Street in Dublin city centre. Construction is set to begin on the site of the proposed development in February 2018, with the new property expected to open in early 2019. The pub will be set over two levels and will have a beer garden, while all hotel rooms will be equipped with disabled access. The Irish Times, 26th June

Cork City Hotel: Cork City Councillors have voted to sell 1 – 2 Deane Street and 7 – 9 Parnell Place to Tetrarch Capital Ltd, who has plans to redevelop the properties into a budget boutique hotel and a separate designer hostel. The properties, which the council previously acquired in 2015 and 2016, were home to Mahers Sports and Flor Griffin’s Electrical in recent years. The Irish Examiner, 26th June

Ormond Quay Aparthotel: Targeted Investment Opportunities ICAV have applied to Dublin City Council to construct a 100,000 sq. ft., 165-bedroom “aparthotel” on a 0.5-acre site on Ormond Quay in Dublin city centre. Under the proposal, the existing buildings, which include the old Bondi Beach Club, will be demolished to make way for the aparthotel. NAMA Wine Lake, 25th June

RIU Plaza The Gresham Hotel: RIU Group, the new owner of the former Gresham Hotel (now known as RIU Plaza The Gresham Hotel) has sought planning permission to convert part of the office facilities in the hotel into 18 further bedrooms. The hotel currently has 323 bedrooms and planning permission to build a further 140 rooms. The Irish Times, 20th June



Iveagh Trust Social Housing: The Iveagh Trust, the Dublin housing fund founded by the Guinness family, has secured funding for an additional two social housing projects. The trust, which launched the Annamore Court social housing scheme last week, plans to build 84 homes in Clongriffin and an additional 26 homes at Miller’s Glen in Swords. Both builds will be Part V affordable homes and will be on sites belonging to Gerry Gannon. The trust has been building social housing in Dublin for over 125 years, and plans to add 650 homes to the existing 1,350 it owns or manages by 2020. The Sunday Business Post, 25th June

Galway Student Accommodation and Retail Investment: A private investor has paid €3.35m for a student accommodation and retail investment in Galway, which was put on the market with a guide price of €3.2m last September. The current rent roll is c. €272k p.a., offering a net initial yield of c. 7.8%. The complex consists of 20 student apartments in four blocks (12 three-beds and eight two-beds) and four commercial units. The student accommodation has achieved c. 90% occupancy in recent years, and additional lettings are made to tourists in the summer after the academic year is over. Three of the four retail units are rented to Domino’s Pizza, Subway and the Irish Nurses Organisation, with one ready-to-rent office unit suite currently vacant. The complex is c. 2km from Galway city centre, and within walking distance of NUI Galway and University College Hospital Galway. The Irish Times, 21st June

Greystones Site: Agar is inviting offers of €2.2m for Carraig Eden, a landmark property with vacant possession in Greystones, Co. Wicklow. The 0.83-acre site is located close to the sea and the local DART station, and is zoned town centre in the local development plan, which permits a range of uses including institutional, boutique hotel, B&B, offices, residential and educational. Included in the sale is a large detached, unlisted period property with 21 bedrooms, five apartments, caretaker accommodation and catering facilities. There is also a related L-shaped bungalow and sports pavilion structure. The Irish Times, 20th June

Planning Permission Statistics: The latest figures from the Central Statistics Office (CSO) show that c. 4,650 planning permissions were granted for dwelling units in Q1 2017, an increase of 50.4% on the corresponding period last year. One-off houses accounted for c. 27% of all new dwelling units granted. Dublin had the most planning permissions granted, with 1,403 permissions, while the midland region had the least, with 391 applications approved. Across the country 1,523 permissions were granted for new dwellings, while 1,767 were granted for extensions. The Irish Times, 23rd June

Donabate Development: Bernard McNamara’s Roxtip Ltd has received planning permission from Fingal County Council for 31 homes on a site in Beaverbrook, Donabate in north Co. Dublin. Mr McNamara had initially sought approval for 36 homes, however following concerns by local authorities and opposition from locals, he reduced the number to 31. The Irish Independent, 27th June

South Dublin Development: Dalkey could be set for another residential development as it has emerged that Twinlite, which is owned by Eugene Larkin and his family, is seeking planning permission for 50 apartments on a three-acre site on Castlepark Road in Dalkey, south Dublin. The Sunday Business Post, 25th June

Malahide Apartment Complex: Developer Padraig Drayne has agreed to remove one storey from a proposed luxury apartment development in the Dublin suburb of Malahide. Mr Drayne had planned to build a five-storey over-basement building containing 17 two-bedroom apartments and six one-bedroom apartments at Gas Yard Lane. However, Fingal County Council’s planning department raised concerns regarding the proposed development, stating that it would cause overshadowing and have an overbearing impact. As a result, new designs for the building have been submitted, which include the omission of the fifth storey of the building. The Irish Independent, 26th June



Northwest Business Park: William Harvey is guiding €3.25m for a modern detached warehouse and office facility in Northwest Business Park in Dublin 15. The 18,094 sq. ft. property contains 16 banana-ripening rooms which can either be used for refrigerated storage, or removed entirely by the new owners. The plant can also be let on flexible terms for c. €160k p.a. The Irish Times, 20th June



Porsche Showroom: Car dealer Joe Duffy is looking to invest c. €20m in a major new Porsche and Volkswagen showroom in Finglas, north Dublin. The new showroom, which is subject to planning permission, will be located on a 5.7-acre site next to the M50. The Irish Independent reports that the new showroom will capitalise on the small but growing appetite for Porsche cars in Ireland. The Irish Independent, 26th June



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