29th March (Issue 39)
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
Castletroy Shopping Centre: The Limerick development company Urban Green Private has purchased Castletroy Shopping Centre in Limerick for €3.425m, significantly above the €2.2m asking price. The shopping centre lies on a 13 acre site, features 91,547 sq. ft. of retail space and 720 car spaces. The gross annual rental income of the shopping centre is €365k, however the net annual income is c. €200k. Currently c. 60% of the retail space is vacant and subject to significant service charge voids. SuperValu anchor the shopping centre and own their 43,000 sq. ft. unit. Tenants include An Post and there is also a drive-through McDonald’s. The Irish Times, 23rd March
Cashel Shopping Centre: Davy Real Estate, on behalf of one of their property funds, has paid over €6m for a shopping centre and adjoining petrol station in Cashel, Co. Tipperary. The shopping centre has a total floor area of 70,363 sq. ft. and provides 342 car spaces. The annual rent for the shopping centre is c. €658k while the annual rent for the petrol station is c. €164k. Tesco is the key tenant for the shopping centre, paying €565k p.a. on a lease which has over 11 years to run. Tesco is also the tenant for the petrol station and its lease does not expire for eight years. The investment will offer an initial return of c. 12.3%. The Irish Times, 23rd March
OFFICE
Harbourmaster Place: An unnamed Italian insurance firm has completed the purchase of 3 Harbourmaster Place in Dublin’s IFSC for over €40m. The property is fully let and currently generating annual rental income of €2.456m. Depfa Bank is the key tenant paying c. 50% of the rent, while Danske Bank pays c. 23% of the rent. The sales price equates to a capital value of €755 psf and the property offers an initial yield of 5.2%. The €40m+ sales price was more than €2.5m above the price sought by CBRE and Savills, who sold the property under the instruction of the receiver, Grant Thornton. The Irish Times, 23rd March
River House: Mercer Real Estate Partners has completed the purchase of a 13 storey office block known as River House in Belfast city centre for an undisclosed sum. The 88,000 sq. ft. property dates back to the 1960s and has 66 car spaces to the rear. While the sales price is unclear, it has been reported that it equates to a 10% yield. CBRE had brought the property to the market in May 2015, guiding GBP£4.25m. The property is 93% let to the business services group Concentrix and the PSNI. NAMA Wine Lake, 27th March
HOTEL
Sackville House: Tetrarch Capital has been granted planning permission by Dublin City Council for a seven storey, 158 bed hotel which is to be located behind the former Clerys department store in Dublin 1. The hotel is to be built on the site of the former Sackville House, which Tetrarch purchased for in excess of €4m in 2014. The projected cost of the development is c. €16m and once completed, Tetrarch intend to market the hotel as a “budget boutique hotel”. The Sunday Times, 27th March
Dalata Acquisitions: Dalata is understood to be close to completing three acquisitions in Ireland and the UK. The assets are a partially completed 120-bed hotel in Cork and two development sites; one outside of Dublin and another in the UK. The Cork asset is located on Beasley Street, has been partially completed for the best part of a decade and will require significant investment once the deal closes. The Sunday Times, 27th March
RESIDENTIAL / LAND
Mortgage Affordability: The latest reading of the EBS DKM Affordability Index has indicated that, on average, mortgage repayments have become more affordable for first time buyer couples over the past year. The figures reveal that on average, first time buyers use 19.1% of their net income to meet their mortgage repayments, down from last year’s reading of 19.5%. Dublin is the least affordable county to service a mortgage, with repayments requiring an average of 21.3% of a couple’s income. Longford on the other hand is the most affordable, as repayments typically account for only 5.9% of a couple’s income. The Sunday Business Post, 27th March
Abbey Glen Apartments: Knight Frank has completed the sale of the Abbey Glen apartments in Cabinteely, south Dublin for €10.5m, which was €2m above the guide price. Spread over two blocks, Abbey Glen contains 44 apartments. The development, which was completed in 2008, comprises 13 one-beds, 22 two-beds, 5 three-beds and 4 two-bed duplex apartments. The current annual rental income of the complex is €442k, however this can be increased to c. €690k upon full occupation. The Irish Independent, 27thMarch
Cairn Homes: After already spending over €550m acquiring development sites, the Irish homebuilder Cairn Homes looks set to spend as much as €165m purchasing additional sites. The most significant transaction is the purchase of the property group Argentum, which may cost up to €122m. Cairn are also expected to complete the purchase of two additional sites; one in the Dublin commuter belt area for c. €31m (which will provide up to 336 homes) and one in south Dublin for c. €12m (providing up to 133 homes). The Sunday Times, 27th March
Cash Buyers: The latest statistics from the Irish Independent / REA Average House Price Survey reveal that cash buyers now constitute 40% of home acquirers in Ireland. The proportion of cash buyers in Dublin City rose for the first time in two years, from 33% to 36%. For the Dublin market as a whole, cash buyers represent 31% of all purchasers. The Irish Independent, 28th March
Aungier Street Development: The Irish registered firm Kesteven Limited has sought planning permission for 300 student bed-spaces and 25,000 sq. ft. of retail space on Aungier Street in Dublin 2. Kesteven are proposing to demolish the existing property on their site and replace it with a seven storey development, which will include a 19,000 sq. ft. supermarket on the ground floor. The directors of Kesteven are Charles McManus and John Pryor. NAMA Wine Lake, 27th March
Fine Gael Proposals: As Fine Gael continues its efforts to form a new government, the party is set to publish a new policy paper outlining its proposals for alleviating pressure on the housing market. The measures proposed by Fine Gael include (i) temporarily reducing the VAT rate on new homes and apartments from 13.5% to 9% (ii) introducing a “Help to Buy” scheme for first time buyers and (iii) delivering 500 “rapid delivery housing units” to tackle the current homeless crisis. The Irish Times, 29th March
OTHER
Sweeney’s Bar: After recently going on the market for over €3.5m through CBRE, the building housing Sweeney’s Bar on Dublin’s Dame Street has already been subject to bids of over €4m. The six story over basement premises contains bars on the basement, ground and first floors, a kitchen and storage area on the second floor, and fifteen ensuites which form a small hotel on the top three floors. No preferred bidder has been announced yet. The Irish Times, 23rd March
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