29th June (Issue 303)
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
Patrick’s Street, Cork The owners of the Savoy on Cork’s Patrick’s Street have secured a tenant for the former Quills store. The Clarendon Group, owners of the complex, have lodged a fresh planning application to reconfigure the internal layout of the historic building, significantly enlarging the former Quills store, incorporating some of the smaller units that were located within the centre. A former barbershop, travel agent and juice shop would all be amalgamated into unit number two, resulting in a significantly larger retail unit. The Savoy Centre has been vacant for some years. Planning was granted in 2018 to merge the former A Wear unit fronting onto Patrick’s Street with the sports shop to the rear of the shopping centre to form one large JD Sports retail outlet. The identity of the future tenant has not been disclosed. Their arrival on Patrick’s Street is expected to provide a significant boost to an area severely impacted by the Covid pandemic. The Irish Examiner, 25th June
Chandos One of the state’s largest retail landlords is currently pursuing six high-street outlets through the courts and is seeking to settle rent disputes with these tenants through summary judgment. Chandos Investments, a real-estate fund set up in 2014 by Goodbody, owns the Bloomfield Shopping Centre in Dún Laoghaire as well as Kilbarrack Shopping Centre in Dublin 5 and retail parks in Dundalk, Co Louth, Blackrock, Co Cork and the Showgrounds Shopping Centre in Clonmel, Co Tipperary. Over the past year the fund has launched legal proceedings against six high-profile retail outlets: Heatons, The Art & Hobby Shop, Boots, Regatta, Easons and Bushgrove, a subsidiary of Euro General, the discount chain. Chandos have retained JW O’Donovan LLP, the Cork city law firm, to represent them in these cases. Financial filings for the company for the year ending June 2020 show the impact of the pandemic on the retail sector. Chandos now values its entire portfolio at €227 million down from €253 million, in the year ending June 2019. Its total rental income across the two sub-funds was €21.3 million; this is down from €22.2 million on the year previous. The Business Post, 27th June
INDUSTRIAL
Core Portfolio Having offered the Core portfolio to the market in April, CBRE and Eastdil are understood to have selected four international investors to advance to the next round of the sales process. It is understood that the remaining parties M7 Real Estate, Palm Capital, Arrow Capital Partners, and Ares Management have submitted offers of up to €150 million. While those numbers are below the €170 million figure the joint selling agents had been guiding when they offered the portfolio for sale, should a sale be completed at the lower level, it would still represent a significant uplift on the valuation Core had ascribed to its assets in 2018. In an announcement published in advance of its then-proposed IPO, the company said its 106 industrial assets and 167 acres of land (of which 36.7 acres were zoned for development) in the greater Dublin area had a value of €82.9 million in total as at November 30th, 2017. It is understood the portfolio now being offered for sale differs in terms of its composition. The Irish Times, 23rd June
Lexlip, Kildare German-headquartered logistics provider DB Schenker has acquired 14.2 acres of land at the Liffey Business Campus in Leixlip, Co Kildare for a new logistics facility. The site at the former Hewlett Packard campus will be used to accommodate a new 219,000sq ft unit comprising a 200,000sq ft of warehouse and 19,000sq ft of offices, along with room for a further 50,000sq ft expansion to support the growth of the company’s customers in the technology and healthcare markets. The new unit will occupy a high-profile position within the wider Liffey Business Campus, which the Swiss-based investor Stoneweg purchased from BlackRock Real Estate Assets and the O’Flynn Group for €100 million earlier this year. DB Schenker is understood to have agreed the acquisition of its 14.2 acre site from BlackRock and the O’Flynn Group for around €5.7 million prior to their sale of the wider campus. Agent CBRE has been appointed by DB Schenker as project manager for the new site, which has already secured full planning permission from Kildare County Council. The Irish Times, 23rd June
RESIDENTIAL / LAND
Farnham Court, Cavan Both private and institutional investors will be interested in the sale of a residential rental portfolio which is being offered for sale by online auction specialist, BidX1. The portfolio, which comprises 58 of the 60 apartments at the Farnham Court scheme in Cavan, is guiding at a price of €4.5 million or an average of €77,586 per unit. Distributed across the development’s two blocks, the portfolio is fully occupied (with one apartment kept vacant in order to facilitate viewings during the sale process) and is generating €458,400 in rental income per annum. The guide price reflects a gross yield of 10.2 per cent. Farnham Court occupies a landscaped site of almost 1 hectare (2.5 acres) amid mature woodland. The scheme is situated just 1km from Cavan town centre and 600m from Cavan General Hospital. The Irish Times, 23rd June
Blessington, Wicklow Agent DNG is guiding a price of €4.5 million for a ready-to-go residential development site in the long-established commuter town of Blessington, Co Wicklow. The subject property, known as Burgage Castle, comes for sale with full planning permission for 54 houses and two apartments on a site of 1.867 hectares (4.61 acres). The approved scheme, which has been designed by architects Kruger Lyons, comprises a mix of semi-detached and detached houses with generous living accommodation and options for additional bedrooms in the properties’ extended roof spaces. The Irish Times, 23rd June
Dublin Docklands Glenveagh Properties has sold a Premier Inn hotel site in the Dublin docklands to German investor Union Investment. The Dublin-listed company sold the planned 262-bedroom hotel site as part of an approximately €70m forward-funding arrangement that will result in Union Investment taking ownership of the hotel. In a statement, Glenveagh said The Premier Inn hotel will form a “key component” of a wider mixed-use development at Castleforbes in the docklands. This development also includes 1,256 apartments and 135,000 sq. ft. of office space known as the Freight Building. Construction of the hotel will begin next month, and it is scheduled to be ready for business in autumn 2023. The Irish Independent, 25th June
Thurles, Tipperary A residential development site in Thurles, Co Tipperary, has been brought to the market with a guide price of €2.1m. In May 2008, Tipperary County Council granted planning permission for the construction of 173 residential units on the site – 131 houses and 42 duplexes. This permission has since lapsed. The entire site extends to about 14.37 acres and is zoned Existing Residential under the Thurles Town and Environs Development Plan 2009 as varied in May 2017. It is situated within a 1km walk of the town centre, which provides a wide range of shops, restaurants and bars. Additionally, Thurles Shopping Centre, which is anchored by Dunnes Stores and accommodates 24 other shops, is also in close proximity. The Irish Independent, 25th June
Kinsealy & Delgany Three sites have been launched to the market with one being in Kinsealy, North Dublin and the other two in Delgany, Co. Wicklow. The Kinsealy site is located on Kinsealey Lane in close proximity to the village itself and 4km south of Malahide. The property comes with full planning permission for 32 four-bed detached houses, with each dwelling extending to 1,830 sq ft. The Kinsealy site is being offered for sale on behalf of a private client with a guide price of €4.5 million. The two sites in Delgany, meanwhile, have been placed on the market on the instructions of receiver BDO at prices of €1.9 million and €5.75 million each. The properties at Convent Road and Kindlestown House offer the potential for the delivery of 19 and 58 residential units respectively, according to the feasibility studies prepared in advance of the sale. Both sites fall under the Greystones, Delgany & Kilcoole Local Area Plan 2013–2019 (still in effect), and are zoned “existing residential”, the purpose of which is “to protect, provide for and improve residential amenities of adjoining properties and areas while allowing for infill residential development that reflects the established character of the area in which it is located”. The Irish Times, 23rd June
Whitehall, Dublin 9 An Bord Pleanála has rejected ‘fast track’ plans for a €200 million apartment complex scheme on Dublin’s northside. The appeals board has refused planning permission to Kieran Gannon’s Eastwise Group for the 475 apartments after concluding that the Strategic Housing Development (SHD) scheme did not meet the zoning objective of retaining 20% of the lands as accessible open space. The scheme – made up of seven blocks ranging in height from four to eight storeys – was to be located on the Swords Road between Drumcondra and Santry, Hartfield Place at Whitehall, Dublin 9. It was reported earlier this year that German fund Patrizia AG was closing in on the forward purchase of the development for a figure in excess of €200 million. RTE News, 28th June
OFFICE
Chatham Street, Dublin 2 Lioncor is to begin construction within the coming weeks of a new visitor centre and offices for the European Parliament on Chatham Street in Dublin city centre. News of the commencement of works on the site of the former Chatham House follows formal approval yesterday from the EU’s Committee on Budgets to acquire the new building for €42.7 million. Having purchased Chatham House for a reported €10.6 million in 2019, Lioncor looks to be in line for a significant return on its original investment even after the estimated €20 million cost of developing the EU’s new Dublin premises is factored in. While the new six-storey building, which is scheduled for completion in November 2023, will serve principally as the European Parliament’s liaison office in Ireland, it will also feature the Europa Experience, the aim of which will be to educate visitors in relation to the EU’s work. The Irish Times, 23rd June
MIXED USE
Applegreen, Dublin 6 An Applegreen petrol station on the Clonskeagh Road in south Dublin has been put up for sale. Located just minutes from both Donnybrook and Ranelagh villages, Belfield and Richview office parks, and UCD, the subject property is being offered to the market by agent Colliers at a guide price of €3.5 million. The investment, which comprises a petrol filling service station on a site of .21 acres, is held on a 21-year lease from July 2013 with just over 13 years remaining to lease expiry and no break options. The passing rent is €247,500 a year, with the next rent review in July 2024. The guide price equates to a net initial yield of 6.4 per cent, after allowing for standard purchaser’s costs of 9.46 per cent. The Irish Times, 23rd June
OTHER
Fortwell Capital Fortwell Capital, a British-based lender to property investors and developers, has launched its services in the Irish market with a €21 million construction loan to Red Rock Developments Ltd, the property company led by Irish developer Keith Craddock. Fortwell has teamed up with Dublin-based real estate investment, development and finance specialist Warren Private, which will act as Fortwell’s Irish partner in origination and underwriting. Fortwell is seeking to establish a €300 million Irish loan book and is structuring loan sizes of €10 million to €50 million to support the purpose-built residential, retirement living/care homes and commercial sectors, identifying experienced developers requiring leverage of up to 75 per cent loan-to-value or 85 per cent loan-to-cost. Loan terms will extend up to 36 months. Red Rock Developments will use the new Fortwell construction facility, which is also Fortwell Capital’s first loan outside Britain, to develop its inaugural hotel, a 113-bedroom scheme on Gloucester Street in Dublin’s central business district, pre-let to Premier Inn and offering panoramic views of the River Liffey and across Dublin city. The Business Post, 27th June
Athenry, Galway Apple, the technology giant, is set to make a second attempt to develop an €850 million data centre in Athenry, Co Galway. The US company has submitted a fresh application to Galway County Council seeking a five-year extension to the planning permission it was first awarded in 2016 to develop a data centre on the 490-acre site it owns at Derrydonnell. Planning permission for the centre is set to expire in September this year and Apple is seeking to extend planning approval to 2026, according to documents seen by the Business Post. Apple, the world’s largest technology company, abandoned its original plans to develop an €850 million data centre at the Athenry site due to delays in the Irish planning process after the project became mired in controversy and legal challenges. In April 2019, the Supreme Court dismissed an appeal by two local residents who had challenged An Bord Pleanála’s decision to approve the development of a data centre campus. Apple had already abandoned the project by the time the Supreme Court made its ruling. Instead, the US company said it would build a second data centre at an existing site it operated in Denmark. However, Apple never constructed a second data centre in Denmark and the company now looks set to try for a second time to develop the Athenry site. The Business Post, 27th June
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