28th February (Issue 85)

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.



Bray SuperValu: Friends First is to seek in excess of €8.4m for the 21,709 sq. ft. SuperValu store located in the Castle Street Shopping Centre in Bray, Co. Wicklow. SuperValu occupy the store under a 25-year lease (with upwards-only rent reviews) for which the current rent is €650k p.a., offering an initial yield of c. 7.4%. There are c. 13.5 years left to run on the lease. The Castle Street Shopping Centre contains 33 other shops, and has an overall retail area of 46,600 sq. ft., along with a 150-space car park. The centre serves an extensive catchment area in north Wicklow. The Irish Times, 22nd February

Stillorgan Buildings: QRE is offering three high-yielding retail buildings and an office suite opposite Stillorgan Shopping Centre in Co. Dublin for €3.1m. Numbers 8, 10 and 12 Lower Kilmacud Road have an overall floor area of 7,167 sq. ft. and produce rental income of €262k p.a. Tenants include Boyle Sports, a solicitor’s office, two restaurants and a takeaway business. The guide price offers a net initial yield of c. 8.1%. The Irish Times, 22nd February

Cavan Town Centre: Ten buildings in Cavan town centre on a site of 2.42 acres have been put on the market through Knight Frank with a guide price of over €3.25m. The portfolio extends to 45,000 sq. ft. and contains eight retail units, eight apartments, a house, a former B&B, two pubs, offices, a school, a car park and a development site. The total annual rent roll is c. €357k p.a., offering a net initial yield of 11% before any asset management opportunities (e.g. letting vacant space) are introduced to increase rental income. Current tenants include Boots, CCVEC Cavan Institute, Cavan County Council and the HSE. The site is zoned ‘town core’ under the Cavan Development Plan 2014 – 2020, which encourages new building. The Irish Times, 21st February

Waterford City Shopping Centre: An Bord Pleanála has granted permission for a new shopping development in Waterford city centre, which will contain c. 108,000 sq. ft. of retail space, a c. 6,800 sq. ft. café / restaurant area and a four storey car park. The centre is expected to contain one major anchor store, five medium-size units, 10 smaller units, three restaurants / cafés and 385 car-parking spaces. Most of the site for the new development is currently occupied by industrial style buildings, which were previously used by Waterford IT, but have since fallen into disrepair. In granting permission, An Bord Pleanála attached a number of conditions, including an archaeological assessment of the site and certain environmental measures. The Irish Times, 23rd February



Ericsson Athlone: Knight Frank is guiding offers in excess of €19m for Ericsson’s R&D facility in Athlone, Co. Westmeath. The substantial complex is rented at €1.8m p.a. on a 25-year lease with over 10 years left to run, offering a net initial yield of c. 10%. The lease provides for a minimum rental uplift of 10% or open market rental value, whichever is higher, and the next rent review is due this month, with a further review in February 2022. The complex stands on a site of 15.23-acres, and contains two main buildings with an overall floor area of 142,158 sq. ft. Facilities include a staff canteen, on-site car parking and a multi-purpose sports ground. The Irish Times, 22nd February

Facebook Offices: According to The Irish Independent, Facebook is close to leasing extra office space to add a further 1,000 staff in Dublin. The company is reportedly planning to lease a c. 110,000 sq. ft. building owned by the Comer brothers in Dublin’s north docks, between East Point Business Park and The Point Village. The company currently employs c. 1,500 staff at its Grand Canal Square offices. The Irish Independent, 22nd February



Irish Hotel Sales: New figures from Savills show that over €850m was generated from sales of Irish hotels in 2016, bringing the total value of hotel transactions between 2011 and 2016 to c. €2.4bn. Savills estimate that one in three Irish hotels have changed hands in the last five years, with most activity taking place in the larger cities. Up to 80% of hotels in Cork, 56% of hotels in Limerick, 47% of hotels in Dublin and 33% of hotels in Galway have changed hands during the period. The figures last year were boosted by two particularly large sales in Dublin, namely the former Burlington Hotel and The Gresham Hotel. The Irish Independent, 23rd February



AIB Mortgages: The Sunday Business Post reports that AIB is working on a strategy to dispose of thousands of non-performing mortgages secured by family homes. The paper reports that the bank is facing increasing pressure from regulators to resolve their non-performing loans, and is therefore seeking to remove the mortgage loans from their balance sheet. As the bank is 99% owned by the government, it is extremely unlikely that they will look to sell the loans to a so-called vulture fund. Instead, the bank will explore options such as the mortgage-to-rent scheme or creating a special purpose vehicle to remove the loans from their balance sheet. The Sunday Business Post, 26th February

Cork Development: Developer Michael O’Flynn has begun a c. €80m development plan for the suburbs of Cork City. Over the last four months, O’Flynn accumulated a number of sites near Kerry Pike and Carrigrohane, and will shortly commence the construction of 144 homes at Clonlara, Kerry Pike and 26 homes in SteepleWoods, Carrigrohane. The development of the homes will be completed by a JV entity between O’Flynn and Avenue Capital. The Sunday Business Post, 26th February

Parkside Development: Cairn Homes has formed a JV with NAMA to construct 71 new homes at the former’s Parkside development, located off the Malahide Road in north Dublin. NAMA has a minority interest in the JV, for which Cairn Homes will be the developer. It is expected that construction work on the site will commence immediately and should be completed by the end of the year. 52 units have already been sold for a total of c. €18.1m and the estimated gross sales value is c. €25m. Cairn Homes commenced development at Parkside in January 2015 and has currently built and sold more than 166 homes, with a further 150 under construction. The Irish Times, 22nd February

January Mortgage Approvals: The January 2017 report by the Banking & Payments Federation Ireland (BPFI) on mortgage approvals shows that the number of mortgages approved for the three month period ending in January 2017, based on moving averages, was 3,055. The value of mortgages approved for the corresponding period was c. €628m. Based on the value of mortgages approved, these figures represent an increase of 53.2% YoY (c. €410m January 2016) but a decrease of 2.0% MoM (c. €641m December 2016). Based on the value of mortgages approved, the first-time buyer segment recorded the most substantial growth YoY, rising by 64.8%. BPFI Mortgage Approvals January 2017



Swords Pharmaceutical Plant: The former Merck Sharp & Dohme (MSD) plant in Swords, Co. Dublin, is expected to be shortly put up for sale through JLL, with the guide price expected to be north of €25m. The plant, which is located on Drynam Road, close to the M1 and Dublin Airport, has over 400,000 sq. ft. of buildings on 33 acres, and is being marketed as a turnkey pharmaceutical facility. JLL expect the site to be of interest to pharmaceutical companies wanting to expand or consolidate existing operations in Ireland, given its walk-in condition, proximity to Dublin Airport and 15 acres of surplus zoned land, which would allow the campus to be expanded (subject to planning permission). The Irish Times, 22nd February


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