28th June (Issue 52)
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.
RETAIL
Liffey Valley: The Irish Times reports that Liffey Valley may be the next shopping centre to be placed on the market. Market sources believe that its existing owners may look to capitalise on favourable market conditions, after both Blanchardstown and Dundrum shopping centres received strong interest from investors. Given that Liffey Valley currently has a rent roll of c. €30m p.a., it may sell for over €500m. The majority shareholder in Liffey Valley is HSBC Alternative Investments, with Hines and Grosvenor Estates also having shareholdings in the shopping centre. The shopping centre is currently undergoing a €26m expansion which should increase the floor area to c. 614,612 sq. ft. The Irish Times, 22nd June
Ennis Road Retail Park: An unnamed investor has agreed to pay c. €15m for the Ennis Road Retail Park in Co. Limerick. The park sits on an 11.45-acre site and features nine retail units which have a total floor area of 114,015 sq. ft. The annual rental income is c. €1.476m however two units are currently vacant, therefore the income should increase to c. €1.63m upon full occupancy. Tenants include Woodie’s, Showtime Cinema, Petmania and Smyths Toys. Lisney handled the sale of the park, after being retained by the receiver Kieran Wallace of KPMG. The Irish Times, 22nd June
Percy Place: Irish Life has completed the acquisition of a mixed-use development at Percy Place in Dublin 2, for just under €8m. The 0.25-acre site features Angelina’s restaurant (3,540 sq. ft.) and an adjoining café on the ground floor, with three floors of office space overhead (4,595 sq. ft.). The total rental income of the development is c. €450k p.a., offering Irish Life an initial return of c. 5.5%. There are also 12 high quality apartments in the Percy Place development, however these were not featured in the sale. The Irish Times, 22nd June
Beechmount Shopping Centre: An unnamed Irish investor has paid c. €4.1m to acquire the Beechmount Shopping Centre complex in Navan, Co. Meath. The complex comprises a 3.9-acre development site, a SuperValu supermarket, eight retail units and two office suites. With a rental income of c. €420k p.a., the complex will offer an immediate return of c. 10%. The Irish Times, 22nd June
Phibsboro Shopping Centre: MM Capital has completed the purchase of Phibsboro Shopping Centre in north Dublin. The key individuals in MM Capital are Derek Poppinga and Peter Leonard. MM Capital is now expected to begin negotiations with the tenants of the shopping centre and Tesco, who owns its unit, in a bid to allow them to redevelop the shopping centre. The Sunday Business Post, 26th June
Debenhams Examinership: After entering examinership earlier this year, Debenhams Retail Holdings (Ireland) Limited (DRHL) has applied to the High Court to have at least three of its leases repudiated. DRHL has identified its €36m annual payroll costs and €25m annual rental payments as the key reasons why the company is no longer sustainable. DRHL believes that its leases, many of which have c. 15 years to run and include upward-only rent reviews, “substantially exceed” current market rates. The leases of DRHL are guaranteed by their UK parent company. While the High Court can repudiate the leases, the guarantees by the UK parent cannot be repudiated. It is possible however, that the guarantor can enter into new leases at either an increased, decreased or unchanged rent. The Irish Independent, 26th June
OFFICE
London & Regional (L&R) Exit: Market sources believe that L&R looks set to dispose of its remaining Irish assets in the coming months, which would result in the fund becoming the first international institution to exit the Irish market. The first asset which L&R may seek to dispose of is the former Irish Nationwide HQ in Dublin’s Grand Canal. The office property is currently let to Amazon and is expected to have a price tag of c. €30m. L&R also own three office properties on Lower Mount Street and Clanwilliam Place in Dublin 2, with the three offices understood to have a combined price tag of c. €56m. The Sunday Business Post, 26th June
33 Lower Leeson Street: CBRE is inviting offers of €2m for a Georgian office property at 33 Lower Leeson Street in Dublin 2. The four storey, over-basement property has a floor area of 4,342 sq. ft. and comes with 12 car spaces. The Irish Times, 22nd June
Avoca River Business Park: Savills is guiding c. €10m for a 200-acre land bank near Arklow, Co. Wicklow. The partially completed Avoca River Business Park is most suited to users and investors in sectors such as energy, recycling and IT / data centres, as it features a natural gas supply line and a high voltage electricity supply. On the 200-acre site, there is 279,858 sq. ft. of office and warehouse space across c. 69 acres, there is also planning permission to develop a gas turbine power station on c. 10.5 acres (valid until 2019), while a further 102 acres are zoned for development. The Irish Times, 22nd June
Former MBNA Facility: The Digital Office Centre Group (DOCG) has completed the purchase of the former MBNA facility in Carrick Business Campus in Carrick-On-Shannon, Co. Leitrim. The property consists of c. 120,000 sq. ft. of office space, the majority of which is now available to rent at €12 psf. DOCG acquired the property from Apollo. The Irish Times, 22nd June
One Spencer Dock: A group of Middle Eastern investors have signed legal contracts which will allow them to acquire One Spencer Dock in Dublin’s North Wall Quay for c. €242m. AGC Equity Partners advised the investors on the transaction, for which contracts were signed on the day of the Brexit referendum. The property is the HQ of the professional services firm, PWC. PWC is understood to be paying an annual rent of over €11m (c. €50 psf), with c. 15 years remaining on their leases. The nine-storey property has a floor area of 226,624 sq. ft. and was developed in 2007. The Irish Times, 25th June
HOTEL
Leixlip Manor Hotel: The 29-bed boutique hotel Leixlip Manor and Gardens Hotel is for sale through CBRE, for which offers above €2.3m are being sought. The hotel is operated by the Towey Group and is open for 10 months of the year, from March to December. Weddings are a strong source of revenue for the hotel, with nearly 100 wedding receptions booked for 2016. The hotel is situated on a c. 27-acre site, of which c. 4-acres are formal gardens. The Irish Times, 22nd June
RESIDENTIAL / LAND
Mars Capital (MC): The latest accounts filed by the mortgage purchaser MC shows that the firm was able to acquire thousands of residential mortgages at steep discounts to their par value. MC acquired 1,462 mortgages from IBRC’s Sand portfolio for €154.7m, a 58% discount on the €363m par value. MC also acquired 1,866 mortgages from IBRC’s Project Pearl for 76% of the €329.7m par value. MC also acquired a third mortgage book from Springboard, a Permanent TSB subsidiary. MC paid 67% of the €463.7m par value on the 2,213 mortgages. The Sunday Times, 27th June
Mortgage Lending Figures: The latest report by the Banking & Payments Federation Ireland (BPFI) on mortgage approvals shows that for the three months ending May 2016, the number of mortgages approved, based on moving averages was 2,675 (value of c. €523m). The figures represent an 8.7% increase on the number of mortgages in May 2015 and a 16% increase on the April 2016 figure. BPFI Mortgage Approvals May 2016
EBS Mortgage Offer: EBS has joined Bank of Ireland and Permanent TSB in offering home purchasers 2% cash back on new mortgages. The offer will apply to both first time buyers and those moving homes. One of the attractions of the EBS offer is that there is no lock-in period, meaning that customers will not be required to stay with EBS for a minimum number of years to avail of the offer. The Irish Independent, 23rd June
Sandyford Site: A Dublin-based development company has paid c. €10m for a 4.265-acre development site (c. €2.34m an acre) at the entrance to Sandyford Industrial Estate in south Dublin. Lalco was the previous owner of the site, having paid c. €110m to purchase c. 5-acres in 2006 (c. €22m an acre). Over half an acre of the original site was sold for c. €16.5m in recent years to the Railway Procurement Agency to facilitate the Green Luas line. The purchaser of the 4.265-acre site is now likely to seek planning permission to develop a seven or eight-storey office development which could have a floor area of c. 300,000 sq. ft. The Irish Times, 22nd June
Greystones Development: The management team of Ronan Group Real Estate (RGRE), which is led by Johnny Ronan, has met with Wicklow County Council to discuss developing a village centre on lands owned by the council in Greystones, Co. Wicklow. RGRE is seeking to develop three residential complexes, a cinema, shops and restaurants on the site. Rather than acquire the site, RGRE is proposing to obtain a ground lease to allow them to proceed with the development. The Sunday Times, 26th June
Dublin Suburban Sites: Kelly Walsh is guiding over €7m for four Dublin suburban sites. The sites are located in Stillorgan, Crumlin, Clontarf and Dalkey. The Stillorgan site is located on Upper Kilmacud Road and is a 1.5-acre site. There is an expired planning permission on the site for 38 residential units. The Crumlin site is on Balfe Road and has planning permission for 16 terraced houses, the majority of which are three beds. The site in Clontarf includes Newcourt House on Strandville Avenue and extends to 0.21-acres. Newcourt House is currently let as office space with annual rental income of c. €19k. The Dalkey site is on Ardagh Road, within 500m of the DART station and extends to 0.3-acres. The Irish Times, 22nd June
Donnybrook Development: Purleigh Holdings Limited has sought planning permission to develop 71 apartments in Donnybrook, Dublin 4. The apartments are to be developed in five four-storey blocks on a three-acre site which is near Greenfield Park. NAMA Wine Lake, 26th June
OTHER
Brexit: Following the result of Britain’s referendum on EU membership, Dublin is among a number of European cities which stand to benefit should banks decide to relocate their operations from the UK. Lawyers advising banks such as Goldman Sachs, JP Morgan Chase, Bank of America and Nomura International say that they may need a new legal base, with Frankfurt, Paris and Dublin among the likely destinations. The Irish Times, 27th June
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