28th February (Issue 386)
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
Press Up Hospitality Portfolio Irish hospitality group Press Up is considering the sale of a €275m portfolio of hotels. Eastdil Secured has been appointed to explore strategic options, including a sale of assets. Sources close to the process suggested a sale-and-leaseback structured deal, with Press Up committing to the sites on long leases, will be one of the main avenues explored. Such a deal would be expected to generate offers of €250m-€275m for the collection of assets. There are five hotels in the portfolio. The Dean on Harcourt Street as well as Dean-branded hotels in Cork and Galway form part of the sale, as does the Mayson and The Devlin which are both in the Irish capital. The portfolio has c. 450 keys. React News, 21st February
Kildare Town, Co Kildare The operator of Kildare Village and the Irish arm of Tesco are among the objectors against plans for a six-storey 158-bedroom hotel for Kildare town. Last month, Murlyn Capital Investments Ltd lodged plans with Kildare County Council for a hotel on a site at the junction of Nurney Rd and Monasterevin Rd at Kildare adjoining the Kildare Village site. A planning report lodged with the application contended that a hotel was “perfect for this site in terms of location and in what it can contribute to the tourism of Kildare Town and surrounding area”. However, the operator of Curragh Racecourse has made a submission to the council supporting the planned hotel. The Irish Times, 27th February
Ormond Quay, Dublin 1 The Morrison Hotel in Dublin, which is owned by the Hilton group, is planning to convert its meeting and wedding space into more rooms as cost inflation has rendered its events business not financially viable. The proposal to expand the Ormond Quay hotel, which currently has 145 bedrooms spread across four floors, would add an additional 16 rooms to the premises. Hilton acquired the hotel in 2021. It initially traded under the Doubletree by Hilton brand, but switched to the Hilton’s Curio brand when it was awarded five-star status late last year. The Business Post, 26th February
Dalata Financial Results Dalata, Ireland’s largest hotel group, has reported record revenue of €558.3m for 2022. It is the first time revenue at the company has exceeded half a billion euros, which the group said reflected a “strong performance in the period and the continued delivery of Dalata’s growth strategy”. Revenue from hotel operations at the company was €515.7m, up 20% compared to 2019, the last year before the Covid-19 pandemic. The group’s adjusted earnings before deductions was €183.4m, up 13% on 2019, according to annual results from the company. Meanwhile, Dalata’s revenue per available room was €106.39 last year, an increase of 14% on 2019. The group’s profit after tax of €96.7m is up 24% on 2019. The Business Post, 28th February
Waterville, Co Kerry Colliers is guiding a price of €1.6m for the Sea Lodge Hotel in Waterville, Co Kerry. Located in both the Ring of Kerry and the Wild Atlantic Way, the subject property briefly comprises a modern, purpose-built, full-service 12-bedroom hotel. Refurbished to a high standard at a cost of €3m in 2015, the hotel offers luxurious guest accommodation with impressive, uninterrupted views of the Atlantic Ocean along with a large bar, function room, bistro and foyer. The Irish Times, 22nd February
RETAIL
Harcourt Street, Dublin 2 Pret A Manger has kick-started its planned Irish expansion with the opening of a new cafe on Harcourt Street in Dublin’s city centre. The UK-headquartered food and coffee chain’s arrival to The Vaults at the Station Building comes just over five months on from the opening of its first location on nearby Dawson Street. The company has plans to open up to 20 cafes across Ireland and Northern Ireland over the next decade. Pret A Manger’s premises at Vault 1 extends to 2,100 sq. ft and occupies a position facing Harcourt Street. The Irish Times, 22nd February
Docklands, Dublin The CHQ building in Dublin’s docklands is set to undergo an extensive redevelopment for a licensed food market. Custom House Quarter, the owner of the property, has applied to Dublin City Council for planning permission to turn the ground floor of the listed 19th century building into 30 market units, as well as an exhibition, restaurant and event space on a mezzanine level. Food and alcohol will be served within the food hall and outside area, with a new central entrance from George’s Dock. The development, if given the go-ahead, will also include the construction of a five-storey, 40,000 sq. ft mixed-use building over an extended basement, which will include office space. The Sunday Times, 26th February
Henry Street, Dublin 1 Real estate giant Hammerson aims to “reinvigorate” Dublin’s Ilac Centre with Ireland’s largest Foot Locker store, which is set to open its doors this summer. The Ilac Centre is the smallest of Hammerson’s three Irish shopping centres. It also owns Dundrum Town Centre and Swords Pavilions. American sportswear retailer Foot Locker is to open a 13,000 sq. ft unit in the Ilac Centre, in Dublin’s north city, and will upgrade its existing unit in Swords Pavilions in north county Dublin. The Irish Independent, 23rd February
Dundrum, Dublin 16 Nike is set to open a new store in Dundrum Town Centre this summer, Hammerson has announced. The new 5,666 sq. ft store, which will occupy the former BT2 space on Level 1 of the facility, will be the first “Nike Live” concept in Ireland. It will offer a curated assortment of sport performance apparel, footwear and accessories. The Irish Times, 27th February
INDUSTRIAL / LOGISTICS
Cheeverstown, Dublin 24 Rohan Holdings has secured two lettings at its latest Dublin development, South-West Business Park, ahead of the delivery of its first phase. With formal completion expected to take place within the coming weeks, the company is understood to have agreed deals for a total of 80,000 sq. ft with international tool and hardware distributor Toolbank and a leading provider of equipment to the healthcare industry. Both lettings are understood to have been agreed for in excess of €12 per sq. ft and for fixed terms of at least 15 years. The remaining accommodation available within the first phase at South-West Business Park consists of two units of 60,000 sq. ft and 20,000 sq. ft respectively. The Irish Times, 22nd February
Celbridge, Co Kildare Coonan Property have brought a 5,500 sq. ft office/warehouse unit to market for lease within the M4 Business Park in Celbridge, Co Kildare. The unit is being leased with price on application. Unit A5 is a two-storey terrace unit, which the agent suggests would be suitable for an office/warehouse, with own-door access to front and rear. Unit A5 is presented in good condition throughout and would suit a range of potential users. The Business Post, 25th February
HEALTHCARE / NURSING HOMES
Construction Inflation Primary Health Properties (PHP), a London-based investor in primary health facilities which has operations in Ireland, has warned the government that rents at its properties will have to increase on the back of rising construction inflation. PHP owns a portfolio of 20 assets in Ireland valued at more than €250m. Leases to the HSE and other government bodies account for 74% of the group’s income in Ireland, and all of its rent reviews here are linked to the CPI. The group is planning to increase the size of its portfolio in Ireland to more than €450m in the next three to five years, according to Harry Hyman, its chief executive. However, rising construction cost inflation will affect the rents being charged – a factor PHP recently brought to the government’s attention, Hyman said. The Business Post, 27th February
OFFICE
Ballsbridge, Dublin 4 The family firm of Zara founder Amancio Ortega remains involved in a process to acquire Fibonacci Square, the 375,000 sq. ft office space that RGRE has developed as part of Meta’s new European headquarters in Ballsbridge. Sources familiar with the matter said that while the Spanish billionaire’s firm, Pontegadea, had effectively “pressed the pause button” on any potential deal, they dismissed suggestions that it had disengaged. Should Ortega’s family office proceed with the purchase of Fibonacci Square, it will begin collecting rental income of €22.6m from Meta in 2024 following the expiry of an agreed rent-free period of c. 18 months. The company signed a 25-year lease with Fibonacci Property ICAV, a joint venture between RGRE and its then funding partners Colony Capital, for Fibonacci Square in 2018. The Irish Times, 22nd February
St Stephens Green, Dublin 2 A private members’ club on Dublin’s St Stephen’s Green has lodged an appeal over plans to demolish the building that housed the former Anglo-Irish Bank HQ. The Kildare Street and University Club (KSUC) has lodged an appeal with An Bord Pleanála opposing the plans for Irish Life Assurance plc subsidiary, Stephen Court Ltd, to demolish 18-21 St Stephen’s Green and replace it with a seven-storey office block. The former Anglo-Irish Bank building is also seven storeys in height but the gross floor area of the new scheme would be 50% greater, going from 151,427 sq. ft to 228,400 sq. ft. Along with the KSUC appeal, a local property owner, Radiant Now Ltd, has also lodged an appeal against the Dublin City Council decision to grant permission. The Irish Times, 24th February
St Stephens Green, Dublin 2 Oakmount is in the process of assembling a major site at St Stephen’s Green in Dublin city centre. Having paid just over €17m last year to acquire UK fashion retailer Topshop’s former flagship premises at 6-7 St Stephen’s Green, Oakmount is understood to be closing in on the purchase of several other properties on either side of the building. In the first instance, Oakmount is pursuing a deal to acquire no. 8 St Stephen’s Green. The building, which was offered to the market by Cushman & Wakefield last September with the benefit of vacant possession at a guide price of €20m, extends to 28,418 sq. ft of lift-serviced office space. Oakmount is said by market sources to be closing in on the purchases of 4 and 5 St Stephen’s Green as well. In the case of no. 5, the developer is understood to have made an unsolicited approach to the building’s owner Aviva Ireland, as the building, while vacant, isn’t on the market. No. 4, a four-storey over-basement building, was offered for sale by JLL in October 2019 at a guide price of €4.25m. The Irish Times, 22nd February
RESIDENTIAL / DEVELOPMENT
Donnybrook, Dublin 4 UK-headquartered investor M&G has paid €99.5m for a portfolio of 148 high-end apartments in Donnybrook, Dublin 4. The price paid by M&G’s European Living Property Fund represents an average of €672.3k per unit. The apartments at Eglinton Place, which are in the process of being completed by Irish developer Richmond Homes, will target demand at the upper end of Dublin’s private rented sector. The scheme, a mix of one, two and three-bedroom homes, will be ready for occupation by the summer. The Dublin 4 scheme is the European Living Property Fund’s second acquisition since its inception in January of this year. The Irish Times, 22nd February
Construction Costs Builders are facing price hikes of 10% on the cost of concrete, blocks and aggregates from this week as Roadstone, a CRH company and Ireland’s biggest supplier of construction materials, increases the prices of all of its products. The 10% price increase is due to come into effect on Wednesday. The news puts a dampener on last week’s sentiment survey released by the Society of Chartered Surveyors Ireland, which found that construction inflation had calmed. It put the easing of inflation down to an abatement of energy and fuel price hikes. With a 5% levy on concrete products scheduled to come into effect in September, potential buyers may have to wait some time for the rate of increases in new house prices to slow. Latest figures from the CSO show that the price of new homes rose by 10% in 2022, faster than the rate for second-hand dwellings. The Sunday Times, 26th February
Sandyford, Dublin 18 An affordable housing body is building 65 apartments for social housing on the site of the former home of retired Chief Justice Susan Denham. Denham sold Whinsfield House, her two-storey home in Sandyford in Dublin, in 2016 for €3.5m and it was subsequently demolished to make way for the new development. Respond, the affordable housing association, is now building 65 apartments on the site with the aid of a state loan of €6.18m. The Business Post, 26th February
Development Land Prices There was an 11% rise in the value of Irish land sales last year, a new study has found. There were €751m worth of land deals in 2022, up from the previous year’s total of €677m, according to a new report from Savills Ireland. This is despite the company saying that viability is the main concern for investors, with many builders saying projects have become unviable due to rising costs. Although the number of land deals completed in 2022 was lower compared to 2021, the average value was 29% higher, at €8.1m compared to €6.3m. The largest deal last year was the €140m sale of 1 North Wall Quay, which is home to Citi’s current European headquarters. The number of small deals below €1m fell by 28%, yet the number of mid-size transactions at between €1m and €5m rose by 6%. There were also contractions in the number of deals valued between €5m and €10m, as well as €10m and €20m. Aligned with this was the reduction in the average land size sold, with this falling from 16 to 12 acres between 2021 and 2022. The Business Post, 24th February
Sherry Fitzgerald Research The stock of houses available for sale remains at a historically low level, according to analysis by Sherry FitzGerald Research. The real estate agent group found there was just over 15,000 second-hand properties listed for sale nationwide in January 2023 a fall of over 26% since January 2020. There were 53,909 such properties advertised for sale in January 2010, when Sherry FitzGerald first started monitoring this data. The total volume of properties advertised for sale in January 2023 represented 0.8% of the overall total private housing stock. Dublin is the only county nationally to record an increase in available stock, up 7% over the three-year period to 3,945 units. The Business Post, 27th February
Ires Reit, the country’s biggest private landlord, recorded a net loss of €12m last year after writing down the value of several of its properties. However, revenue at the company rose from €80m in 2021 to €85m last year, and the firm announced it will pay out a dividend of 2.91 cents per share for 2022. “Ires continued to experience strong demand, with occupancy across its portfolio increasing to 99.4% (99.1% at 31 December 2021), generating strong recurring cashflows,” the company said. The firm’s portfolio now consists of 3,938 residential rental homes, a rise of just over 100 compared to 2021, as well as some “ancillary” commercial space. However, it recorded an impairment charge of c. €46m due to a write-down in the value of several of its properties. The Business Post, 24th February
Rathmichael, South Co Dublin A development property with potential for 67 residential units in Rathmichael, near the junction of the M50 and M11 in South County Dublin, is being offered for sale. Savills Ireland are quoting a guide price of €4.95m. Known as Ferndale House, the property sits on a 6.16-acre site and is zoned A1 ‘to provide for new residential communities and Sustainable Neighbourhood Infrastructure’. The Irish Independent, 23rd February
CSO Figures Minister for Housing Darragh O’Brien has defended CSO figures on housing completions that indicated just under 30k homes were built in the State last year. Mr. O’Brien told an Oireachtas Housing Committee that questioning the CSO figures was “very dangerous” and was akin to questioning their figures on “births and deaths”. The CSO recently said 29,851 homes were built last year, basing its figure on the number of new dwellings connected to the electricity network. However, private firm Construction Information Services (CIS) last week argued that the National Building Control Office’s certification system was a better guide and that this produced a 23,751 total. The CSO disputed the methodology. The Irish Times, 23rd February
Construction Sector Housing starts, one of strongest indicators of future supply, rose significantly in January, suggesting the impact of construction inflation may be moderating. Commencement notices for the construction of 2,108 new residential homes nationally were received by the Building Control Management System (BCMS) last month. The Department of Housing, which publishes the data, noted that this was the highest number of commencement notices received in the month of January since the data series began in 2014. The monthly total was an increase of 17.4% on the preceding month and 13.3% on the same month last year. The department noted that over the past 12 months (from February 2022 to January 2023) commencement notices for 27,204 new homes were received. “Supply, which is key to improving our housing market, is increasing,” it said. To the end of December, more than 56,000 homes were either commenced or completed, the department said, while noting the number of completions in 2022 (29,851) was greater than the total for any full year since the CSO completions series began. The Irish Times, 23rd February
Blackrock, Cork MWB Two Ltd said the company was confident it would succeed in convincing An Bord Pleanála to grant planning for the 92 apartment complex on part of its 3.7-acre holding on the grounds of the former Bessborough Mother and Baby Home in Blackrock. MWB Two Ltd applied on November 17th, 2022, for planning for the project, which comprised one studio apartment, 42 one bedroom apartments, 30 two bedroom apartments and 18 three bedroom apartments and a creche, contained within two buildings ranging in height from five to eight storeys. Cork City Council had been quite specific when it refused planning permission for the project on December 19th, 2022, but the company was confident that these issues would be addressed by the company in its appeal lodged last week with An Bord Pleanála. The Irish Times, 23rd February
Ormond Quay, Dublin 1 The company that operates Dublin venue The Grand Social is objecting to new plans for an eight-storey mixed-use scheme near the Ha’penny Bridge. The scheme to the rear of The Woollen Mills restaurant has been proposed by SRM Book and Cook Ltd. It would include six three-bed apartments, a two-bedroom penthouse unit and a restaurant at ground floor level. Other objectors to the development include An Taisce and an independent member of Dublin City Council. SRM Book and Cook Ltd operates the Woollen Mills Eating House restaurant at Ormond Quay. A decision is due on the application next month. The Irish Times, 22nd February
Vacant Pubs Dozens of pubs long closed to customers are to be turned into homes under a scheme aimed at boosting much needed housing and reducing the number of vacant properties. Last year, Minister for Housing Darragh O’Brien set his sights on using disused premises around the country to help counter the deepening housing crisis, without disrupting the built fabric of rural towns and villages. The unused properties can be altered into living quarters without planning permission under the scheme. Figures show 53 pubs have applied for the exemption scheme over a 10-month period. They account for one-fifth of all commercial premises that applied for the scheme. The pubs that have applied for the scheme are spread across 24 local authority areas although Co Mayo has by far the largest take-up with 12 individual properties. Figures indicate the county has seen a quarter of its public houses close since 2005. To date, overall figures show an intention for the provision of 2,066 homes under the scheme. The Irish Times, 27th February
Coolock, North Dublin Dublin City Council has approved planning permission for the development of 853 new homes at Oscar Traynor Road in Coolock, north Dublin. Under a scheme developed with the council, Glenveagh Living, a subsidiary of one of the State’s largest building companies Glenveagh, will develop the new homes along with a number of parks and community facilities for the Coolock, Beaumont, Santry and Kilmore areas. The 17-hectare site will include 343 social housing units, 340 cost rental units and the remainder will be 170 affordable purchase units. The scheme will include 240 houses and 613 apartments and duplex units up to six storeys tall. Glenveagh was selected to partner the city council on the development following a tender by the local authority. Glenveagh has indicated it will be in a position to begin work at the site from the end of this year with a view to the first houses being completed by late 2024. The entire project is expected to be developed over four years. The Irish Times, 26th February
OTHER
Commercial Property Vacancy Vacancy in the commercial property sector reached a ten-year high at the end of last year, with 29,581 units in Ireland classified as empty, a new report has shown. Research published by GeoDirectory, the data intelligence unit of An Post, has said that 14% of commercial property in Ireland was vacant in the final quarter of 2022, up 0.1% on the previous year. The vacancy rate in the fourth quarter of 2022, which translated into 29,581 empty commercial units in Ireland, is the highest level recorded since GeoDirectory began collecting data in 2013. The new Commercial Vacancy Rates report, prepared by EY, showed that vacancy rates have remained stagnant in Dublin at 12.9%, but rose in 18 of the 26 counties nationwide. The GeoDirectory database tracked 181,129 occupied addresses in the state in Q4 2022. The Business Post, 28th February
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