27th October (Issue 270)
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
Swords, Co. Dublin 230-240 Lakeshore Drive is being offered to the market with the benefit of full vacant possession by joint agents Lisney and CBRE at a guide price of €7.5 million. The subject property which is located in the Airside Business Park in Swords extends to 29,773 sq.ft. on a gross internal area basis (€252 psf) and benefits from 109 surface car-parking spaces. In addition, the current owners recently secured planning permission to develop a new double-height entrance along with a shower block to the rear of the building. 230-240 Lakeshore Drive had up until relatively recently served as the European headquarters of global cereal brand, Kellogg’s. The Irish Times, 21st October
INDUSTRIAL
Newry, Co Down A substantial 22 acre industrial development site on the edge of Newry, eight kilometres from the border, has come to market for sale through Belfast selling agent Inprio. The freehold site is being marketed at a guide price of £3.3 million, (c.€3.65 million) representing £150,000 (or €166,167) per acre. Outline planning approval was granted on January 30 last for industrial units and an associated access road. The 22-acre site is strategically located beside the A1 dual carriageway between Belfast and Dublin. The Business Post, 25th October
HOTEL
Dublin Hotel Sector Before the pandemic, JLL forecast that slightly more than 5,000 new hotel bedrooms would open in the capital by the end of 2022. Since then, the closure of construction sites has resulted in some delays to target opening dates. Furthermore, the economic shock being felt by the hotel sector globally has resulted in some schemes being abandoned and some being sent back to the drawing board for further consideration. Between March and October this year, JLL’s forecast for new hotel openings in the capital by the end of 2022 has fallen by nearly 25% from the previously estimated 5,000-plus bedrooms to c.3,850. Year-to-date (YTD) occupancy at the end of September for Dublin hotels was 34%, compared with 84% for the same period in 2019. In more recent months, occupancy levels were much lower than this – occupancy in Dublin in July was at 20%, at 30% in August and in September was 23%. These occupancy rates are just for the hotels that have remained open and trading. The Business Post, 25th October
RESIDENTIAL / LAND
Dublin PRS Market Hooke & MacDonald have highlighted the continued strength of Dublin’s private rented sector (PRS) market in the three-month period to the end of September 2020 with 1,016 homes sold for a total of €470 million to institutional investors. The sale of these residential units accounted for 67% of all investment sales in Dublin in the third quarter of 2020. In the first nine months of 2020 office PRS transactions accounted for 36% of all investment sales in Dublin. The largest transaction in the first nine months of this year across all categories of investment saw the Cosgrave Property Group secure c.€200 million from the sale of 368 apartments at Cualanor in Dún Laoghaire to Deutsche Bank subsidiary, DWS. The Irish Times, 21st October
Cork City An Bord Pleanála has given the green light for a 30-apartment student development between Victoria Cross and College Road in Cork, disagreeing with its inspector that it would negatively impact the area. The five-year planning permission for the student accommodation development at San Paula, Orchard Road, proposes the construction of a one to five-storey development including 30 student apartments in three blocks with a total of 216 bed spaces. The San Paula site was acquired in late 2017 for €1.9 million. The Irish Examiner, 22nd October
Irish Land Sales 11 land sales were completed between July and September 2020 with a combined value totalling c.€64 million between them. A CBRE Ireland report highlighted that this is a very significant increase on the previous quarter although the overall volume of transactional activity in the year-to-date has been severely impacted by Covid-19 and the economic backdrop. Over the year to end September 2020, the value of deals totalled c.€185 million, compared to €767 million at the same point in 2019. Average quarterly transaction levels in the market over the last five years has been c.€240 million per quarter. The Irish Independent, 22nd October
Irish Glass Bottle Site Nama has given Ronan Group Real Estate (RGRE) and their new partner, US private equity group, Oaktree, a four month extension, until December 18th 2020, on an original 30-day deadline to complete the €160 million deal on the former Irish Glass Bottle site in Dublin. RGRE had been selected with Colony in late July 2020 as preferred bidders for a controlling stake in the 37-acre site and given 30 days to complete. It is the largest vacant plot in Dublin and is earmarked to deliver more than 3,500 homes. The Irish Times understands that under bidders for the project had contacted Nama in September 2020 to express their continued interest in the site following the expiration of the original deadline The Irish Times, 24th October
Cork City A 105 acre landbank at Stoneview, just north of Blarney in Cork City has come to the market for Nama through agents Coldwell Banker with a guide price of €4.6 million (€43.8k per acre). The subject lands had previously formed part of a 2005/2006 proposal for up to 2,500 houses. The lands are fringing the N20 Cork-Mallow/Limerick road, as well as the main rail line linking Cork and Mallow/Dublin. The original Stoneview lands are understood to have extended to more than 250 acres with 178 acres being put up for sale in 2012. The 2012 lands were primarily zoned agricultural while there was planning for over 400 homes on a section, subject to conditions. The Irish Examiner, 22nd October
OTHER
Loan Portfolio Sale Permanent TSB (PTSB) is to sell a pool of interest-only buy-to-let mortgages with a gross value of €1.4 billion to US bank Citigroup, with the loans set to be refinanced on international bond markets. The deal involves 3,400 borrowers and the loans have an average balance of €375,000 and are classified as performing loans with an average remaining term of 10 years. The Irish Times understands that PTSB will receive the €1.2 billion net value of the portfolio from Citigroup’s Citibank NA London for the loans. Loan servicing firm Pepper will ultimately manage the loans on a day-to-day basis on behalf of bond investors. After the transaction, PTSB will continue to have €900 million of interest-only buy-to-let loans on its balance sheet. The Irish Times, 27th October
Sub-€20 million Market Conor Whelan of QRE Real Estate Advisers outlined in The Irish Times how the sub-€20 million investment market in Ireland has been performing. In Q3 2020, the total spend in the sub-€20 million market came to €60 million, with just 15 transactions taking place. When compared to the level of activity in the pre-Covid first quarter, this translates to a reduction of 65% in the total number of transactions, or €109 million less in capital allocation to the sector. Unless a vendor is under pressure to sell at a discount in the current climate, they will hold. Mr Whelan is of the view that most vendors believe the current dip will prove itself to be a temporary inconvenience, which will be reversed with the movement along the upward slope of “V curve” in 2021. The Irish Times, 21st October
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