28th June (Issue 353)
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
Shannon, Co Clare Irish real-estate investor and operator Fine Grain Property has acquired a 124,000 sq. ft. five-floor office building in Shannon’s Westpark Innovation Campus from global company AXA Partners. With a value estimated by market sources to be c. €20m, the purchase of Building 7000 represents Fine Grain’s largest sale-and-leaseback deal in Ireland to date and consolidates its ownership of all the properties at the 40-acre business campus. AXA Partners will continue to operate from two floors of the building through its leaseback agreement. The purchase of the Shannon business campus capped a three-year run of investments by Fine Grain in which it spent €175m on properties distributed across Galway, Athlone, Limerick, Dublin and Cork. The Irish Times, 22nd June
Shannon, Co Clare French investor Corum Asset Management has increased its overall investment in the Republic and Northern Ireland to more than €300m with the acquisition for €14.725m of Dromore House, a prime regional office property in Shannon, Co Clare. Located in the East Park business campus, the subject property comprises c. 80,000 sq. ft. of office accommodation, which has been actively managed and upgraded since its acquisition by Clyde Real Estate. Dromore House has a strong tenant line-up that includes Intel, Digital River and Wipro. Intel accounts for 76% of the total annual income. The Irish Times, 22nd June
South Circular Road, Dublin 8 A private Irish investor is set to secure a NIY of 6% following their acquisition for €3.5m of Bloomfield House just off Dublin’s South Circular Road. The subject property comprises a distinctive two-storey redbrick office building dating from the 1930s. The property extends to 8,203 sq. ft. with 12 car-parking spaces situated on a 0.26-acre site. Bloomfield House is fully let, producing c. €231k pa across two tenancies. The ground floor and mezzanine levels of the property are let on a 10-year lease from September 1st, 2014, to marketing agency Boys + Girls, which has extensively modernised and refurbished its offices. The annual rent, which was reviewed in 2019, equates to €160k pa. This letting includes eight car-parking spaces. The first floor of the property is let on a five-year lease from July 1st, 2021, to mechanical and electrical building services company Delap and Waller. The annual rent, which was agreed on a stepped level, averages out at €71.25k pa over the five years and includes three car-parking spaces. The Irish Times, 22nd June
Blackrock Business Park, South Co Dublin CBRE is seeking a tenant for the ground floor office unit at Block 1, Blackrock Business Park off Carysfort Avenue in south Co Dublin. The Block 1 office space has a floor area of c. 5,360 sq. ft. with 15 designated car spaces and a kitchen. This office space is available immediately by way of a flexible new lease on competitive terms. The Business Post, 25th June
HOSPITALITY
South Docklands, Dublin Aviva Investors has bought a hotel scheme in the centre of Dublin, on behalf of its European Real Estate Long Income (E-RELI) Fund. The property is under construction by Red Rock Developments and scheduled to complete at the end of 2022. Premier Inn has prelet the asset on a long-term lease. The building is at the junction of Gloucester Street and Princes Street South, within the South Docklands business district of the city Centre. The acquisition is E-RELI’s first transaction in Ireland. React News, 23rd June
O’Connell Street, Dublin 1 A Green Party TD has vowed to appeal against a council decision allowing a large expansion of a city hotel that will result in the closure of a beer garden which connects three pubs. Dublin City council granted permission to JMK Group, a British real estate company, to expand the Holiday Inn Express at its premises on O’Connell Street, adding 89 new guest rooms. JMK Group had originally applied for a seven-storey extension, but that was refused following concerns from the council about daylight loss for surrounding buildings on Parnell street. Instead, a slightly lower six-storey extension was granted. A beer garden at the rear of the Holiday Inn connects three popular bars: The Living Room, Fibber Magees and Murray’s Pub. The Sunday Times, 23rd June
Hospitality Sector Performance, Ireland The Irish hotel investment market continued its strong recovery from Covid in the first quarter of 2022, with a new report revealing transaction activity in the first three months of the year was up on pre-pandemic levels. According to Cushman & Wakefield’s latest hospitality Marketbeat report for Ireland, transaction activity hit €73.1m in the first quarter of 2022. This activity level represented a “significant improvement” on the €9.8m recorded in the first quarter of last year but also showed an increase on the level recorded before the pandemic, when transactions were just shy of €60m in the first quarter of 2020. The largest transaction of the opening quarter was Dublin Loft Company’s sale of the Hendrick Hotel Smithfield. The boutique hotel was acquired by US investment firm TPG for c. €37.5m. At the end of the first quarter, c. 5,630 hospitality beds were under construction, with 5,000 being built in Dublin. The Irish Independent, 26th June
RETAIL
Tallaght, Dublin 24 Tadg Riordan Motors is offering its motor showroom on the N81 Tallaght bypass road, Dublin 24 for sale (€1.5m) or rent (€100k). The offer follows the Toyota dealer’s move to a new larger showroom on Airton Road, Tallaght. The N81 bypass premises is a purpose-built retail motor showroom extending to c. 9,070 sq. ft. on c. 0.3 acres. Car storage and valeting facilities at basement level can accommodate c. 10 vehicles. Externally, the property offers additional display and customer parking for between 30 and 40 cars. The Irish Independent, 23rd June
Grafton Street, Dublin 2 Canada Goose is understood to have signed a deal for the old Monsoon Accessorize store at 64 Grafton Street in recent weeks. The luxury coat brand had run a temporary store at No. 83. A listing on the Commercial Leases Register says 64 Grafton Street has been let on a ten-year lease at an annual rent of €500k. The Sunday Times, 27th June
STUDENT ACCOMMODATION
Washington Street, Cork A new €35m 50-apartment development is set to open on Washington Street in time for the next academic year. Despite pandemic lockdowns and soaring construction costs, the privately-owned, purpose-built Bróga House will be delivered “on time and on budget” according to John Paul Construction, the main contractor on the project, at the 0.79-acre site of the former Square Deal furniture outlet. The 100,000 sq. ft. development ranges from two-to-six storeys. The apartments, mainly eight-bed modular clusters, with individual ensuite double bedrooms with desk and storage, and a shared living/dining/kitchen (LKD) space, average 1,400 sq. ft. in size. The purpose-built student accommodation (PBSA) will also include two internal courtyards and a 4,305 sq. ft. roof terrace which students can access. The development is backed by global real estate investment, development and asset management firm Round Hill Capital (Ireland). The Irish Examiner, 23rd June
HEALTHCARE / NURSING HOME
Co Mayo Assura, a London-listed healthcare building developer and manager, has entered the Irish market after acquiring a Co Mayo building worth €11m. According to a recent analyst call, Assura has acquired Castlebar Primary Care Centre. The Irish Independent, 26th June
RESIDENTIAL / DEVELOPMENT
Shanganagh, Co Dublin The Land Development Agency (LDA) has appointed the contractor for the development of 597 new homes at Shanganagh, Co Dublin, with work on site (22-acre) to commence in September. The project is being delivered in partnership with Dún Laoghaire-Rathdown County Council (DLRCC) and will be devoted 100% to affordable and social homes. On completion this will be the largest public housing scheme in the State, delivering on the LDA’s mission to unlock state land to deliver large-scale affordable housing projects. It will be a mixed tenure project with the breakdown as follows: 51% cost rental (306 homes), 15% affordable purchase (91 homes) and 34% social housing (200 homes). The first completed homes are expected at the end of 2024. Walls Construction has been appointed to lead the project. The development will offer a mix of accommodation suitable for single people, couples, and families with 99 of the new homes to have 3 bedrooms. Press Release, LDA
Mullingar, Co Westmeath A 12-acre land holding in Mullingar, Co Westmeath is being offered to the market by joint agents Bannon and James L Murtagh & Sons on behalf of St Finian’s Diocesan Trust at a guide price of €2.75m. The subject holding surrounds the diocesan office, which the trust is retaining for its continued use, and is distributed across two parcels of land extending to a combined area of c. 12 acres. The entire holding is zoned “Proposed Residential” in the Mullingar Local Area Plan 2014–2020 (as extended). The Irish Times, 22nd June
Drumcondra, Dublin 9 The appeals board refused planning permission for a five-storey BTR apartment scheme in Drumcondra. Cork-based firm Discipulo Developments Ltd had plans to demolish 42 to 44 Drumcondra Rd, including the former Quinn’s pub, to make way for the scheme. Along with the 50 BTR apartments made up of 11 studio units, 33 one-bedroom units and six two-bedroom units, the proposal also included plans for three ground-floor commercial units, including a bookmakers. The Irish Independent, 24th June
Capel Street, Dublin 7 An investment property on Capel Street with links to the arts and media sector has come to the market with a €2m guide price. The upper three floors of the 8,869 sq. ft. premises are being sold. The ground floor is owned by another person who is believed to have paid €1.5m for it which is not included in this sale. DNG is guiding €2m for the subject property. The combination of rents generated from the current tenants and the potential rent that could be generated from the top floor could amount to €154.8k pa. The Irish Independent, 23rd June
Kill Village, Co Kildare A 1.1-acre site with planning permission for 14 houses in Kill village, Co Kildare, sold at a recent auction for €1.32m (€94k per site) and c. 26% over the €1.05m price guided by Sherry FitzGerald Brady O’Flaherty. After outbidding four other bidders, a local Kildare building firm indicated its intention to start building work in the autumn. Its planning permission allows eight three-bedroom houses and six two-bedroom houses. The Irish Independent, 23rd June
Kinsale Road, Cork A subsidiary of butter giant Dairygold is to enter into a €237m property scheme. The ‘Creamfields’ development will include a 15-storey tower, one of 11 blocks, containing 609 dwellings on the site in Cork city. The major development will include 257 BTR apartments. The scheme which has been granted planning permission by An Bord Pleanála will include 189 one-bed dwellings, 338 two-bed dwellings, 48 three-bed dwellings and 34 four-bed homes. The Creamfields development is a vacant eight-acre site, the former home of CMP Dairies on Kinsale Road. It includes a residential apartment scheme with an associated primary care facility and other amenities including creche, gym, cafes and restaurants. The Irish Independent, 22nd June
Glandore, West Cork Up for sale is the former Marine Hotel in Glandore, now a mix of townhouses and apartments. The complex up for sale includes 17 lettings and holiday homes by the pier. Four of the units in the complex were sold to Cork County Council and a number of other are on long-term lets including HAP, earning €230k pa in overall rental income. Selling agents for the Glandore complex are Barry Auctioneers, jointly with Hodnett Forde, who guide at €4.75m-€5m. The Irish Examiner, 23rd June
Terenure, Dublin 6 The construction of a seven-storey, 364-unit BTR apartment scheme on former playing pitches at Terenure College in Dublin will help secure the future viability of the college, according to the head of the religious order in Ireland, the Carmelites, which own the site. Housebuilder Lioncor has lodged plans – which also include 21 houses – for the scheme that is the first to be lodged with Dublin City Council under the Large-Scale Residential Development (LRD) for Fortfield Road, Terenure. The development comprises four apartment blocks rising to seven storeys in height. It comprises 15 studios, 166 one-bed apartments, 174 two-bed apartments and nine three-bed units. The closing date for third-party submissions on the scheme is July 18th. The Irish Times, 27th June
Dún Laoghaire, South Co Dublin An Bord Pleanála will concede in a legal challenge against its permission for 102 BTR apartments in Dún Laoghaire, the High Court has heard. Mr. Justice David Holland was told on Monday that the planning board has indicated in correspondence between the parties that it will consent to an order quashing its fast-track approval for the strategic housing development (SHD) on lands at St Michael’s Hospital, Crofton Road. The Irish Times, 27th June
Help To Buy Scheme, Ireland A fundamental Government review that will determine the future of the Help to Buy scheme for first-time buyers ― which has cost c. €600m to date ― has been completed. The scheme was originally designed to help new home buyers meet the 10% deposit required by banks to obtain mortgages in the face of increased property prices. However, evidence suggests as many as a third of those who have availed of the scheme did not need it to meet the deposit requirement and instead used the scheme to create larger deposits. There were c. 8,000 claims for the scheme last year, up c. 50% on the first year. The overall cost to date for the scheme has been €559m, which is 43% above cost estimates. The maximum grant available is €30k and the average cost per grant has been €24.3k. 63% of claims last year were for properties valued above the national average price of €290k, with 70% of all grants being issued in Dublin and Cork. The Parliamentary Budget Office report said that evidence provided in a 2017 Indecon report and the 2021 tax strategy report suggested there has been “a very small increase in prices” attributable to the existence of the scheme. The Irish Times, 26th June
OTHER
Global Economic Outlook, Investec The ECB has turned more hawkish amidst increasing concerns over inflation. Market sources believe the Deposit rate could rise to 0.75% by the end of this year. However economic headwinds are rising and the ECB could pause normalisation over 2023. Investec believes that the EU19 could avoid a recession, but growth is expected to be subdued, with forecasts revised lower to 2.9% (2022) and 1.4% (2023). The big risk to this view lies with the energy situation and the threat of gas shortages over the winter. However, the ECB will also need to walk a very fine line between raising rates and preventing fragmentation risks given widening sovereign spreads. Investec, 22nd June
Vacant Site Levy, Ireland More than half of Ireland’s local authorities have failed to collect a single euro of the vacant site levy from landowners since its introduction in 2018, according to figures obtained from the Department of Housing, while only 8% of the money due last year was paid. An analysis of reports submitted by local authorities to the department shows that just under €1.3m was collected last year, although owners of vacant sites were liable to pay c. €17m. The analysis also highlights that less than €4m has been paid to date while another €37.2m is due. Councils now accept that some of the outstanding money will not be paid because of appeals, changes of ownership and development of the lands. Vacant sites listed on registers totalled 203 in 2018, before peaking at 346 in 2020. The total has since decreased to 298. The Sunday Times, 22nd June
Croí Cónaithe Scheme, Ireland The state’s timeline to deliver 5,000 apartments by 2026, through a €450m scheme to subsidise construction, was labelled “ambitious” by property industry and banking sector lobbyists as the programme was being devised last year. The Croí Cónaithe scheme, launched in May, will provide developers with subsidies of between €25k and €144k per unit to help subsidise the cost of building apartments. Newly released records connected to a Croí Cónaithe “stakeholder engagement workshop” held on December 10 last year show that those in attendance questioned the ability of the scheme to deliver thousands of units within four years and raised concerns about the overall demand for apartment living. Despite the plea for upfront payments, when the scheme was launched in May, the department stuck to its initial intention to pay developers the subsidy when the apartment is completely built and sold to an owner-occupier. The Business Post, 25th June
City Centre Refurbishment Scheme, Ireland Owners of city centre buildings in Cork, Dublin, Galway, Kilkenny, Limerick and Waterford have until the end of December 2022 to avail of the tax incentive programme known as Living City Initiative (LCI). Only refurbishment and/or conversion work carried out during the next six months will qualify for tax relief. Several city councils are disappointed that so few property owners and investors applied for the tax relief. Allowing investors to combine both the RL rental income and the LCI tax relief enabled some to minimise the risks and recoup more costs more easily and quickly. Under RL, investors can do deals with approved housing bodies or local authorities for long-term leases and loans up to €60k for the repair work in return for the property being made available for social housing for at least five years. To qualify, a property needs to have been vacant for 12 months or longer and in need of repairs. Investors benefit from guaranteed rents with no risk from arrears or vacancy costs. There are two rental income options: 80% of local market rent is paid where the local authority will undertake any maintenance work, or up to 95% if the owner does the maintenance. The Business Post, 25th June
Co Kildare An Bord Pleanála has indicated it will consent to an order quashing its permission for a €70m wind farm in Co Kildare, the High Court has heard. The court heard on Monday that the board would no longer be contesting the action. The developer North Kildare Wind Farm, a notice party in the proceedings, hopes to see its planning application remitted for fresh consideration and wants a short hearing for determination of this issue. North Kildare Wind Farm Group claimed the scheme would cost €70m to build and connect to the national grid, and any delay would adversely impact the project’s commercial viability. The Irish Times, 27th June
Mortgage switching volumes and values reached their highest level in at least a decade, according to data for May 2022 from the Banking & Payments Federation Ireland (BPFI). Remortgage/switching approval volumes rose by 111.5% YoY to 1,237 while the number of top-up approvals fell by 2.5% YoY to 277. Remortgage/switching approval values rose by 129.3% YoY to €329m while the value of top-up approvals fell by 12% YoY to €27m.
The latest figures show there were 5,355 mortgage approvals in May, valued at €1.5bn. Mortgage approval activity increased in volume terms by 14.3% YoY and in value terms by 25.3% YoY. Mortgage approval volumes for property purchase increased by 0.7% YoY to 3,841, valued at €1.1bn. Residential investment letting (RIL) mortgage approval volumes decreased by 2.5% YoY to 119. RIL mortgage approval values increased by 7.8% YoY to €20m. There were 54,710 mortgage approvals in the 12 months ending May 2022, valued at €14.2bn. The Irish Times, 28th June
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