2nd August (Issue 57)
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.
LOAN / PORTFOLIO SALES
Project Gem: More information is beginning to emerge on NAMA’s Project Gem, which the agency hopes to bring to the market in late 2016. According to industry sources, the portfolio will have a par value of c. €3.4bn and will be secured by commercial properties linked to c. 160 borrowers. There have been no estimates yet on the market value of the assets. NAMA Wine Lake, 31st July
Project Abbey: NAMA is believed to have chosen Apollo as the preferred bidder for the c. €700m Project Abbey portfolio. Apollo reportedly bid just over €300m for the portfolio, which contains loans linked to Pat Doherty. The loans in the portfolio are secured by five Irish shopping centres, two Irish hotels, the Park West development in Dublin City and development sites in Los Angeles and Antigua. The underbidders for the portfolio were Oaktree, Starwood and Davidson Kempner / Deutsche Bank. NAMA Wine Lake, 31st July
Project Beara: Final bids have been submitted for NAMA’s c. €250m Project Beara loan portfolio. According to industry sources, the final bidders are Goldman Sachs, Avenue Capital, Deutsche Bank and Marathon Asset Management. Project Beara includes loans advanced to the Shipton Group, which was the development vehicle of Cork’s Love family. Among the assets in the portfolio is Douglas Shopping Centre in Cork. The Sunday Business Post, 31st July
RETAIL
Clerys Redevelopment: OCS Properties, which is owned by D2 Private and Cheyne Capital, has sought planning permission from Dublin City Council to redevelop the former Clerys department store on Dublin’s O’Connell Street. The c. €150m project would see the former department store replaced with a new six-storey retail and office scheme, with a bar and restaurant also earmarked for the property. The total floor area of the development would be c. 344,000 sq. ft. and would see new floors added to the existing property, along with a second basement. As part of the proposal, OCS also plan on developing a new seven-storey, 176-bed hotel. This hotel would be located behind the site of Clerys at Earl Place. The Sunday Times, 31st July
HOTEL
Gresham Hotel: NAMA has selected RIU Hotels and Resorts as the preferred bidder for the Gresham Hotel on Dublin’s O’Connell Street. RIU is understood to have bid c. €91m for the hotel. The closest underbidder, Tifco, bid c. €88m for the hotel. The 2014 accounts for the 4-star, 323-bed hotel show that it made an operating profit of c. €3.4m on sales of c. €18m. NAMA Wine Lake, 31st July
Lyrath Hotel: The sale of the five-star Lyrath Estate Hotel & Spa in Kilkenny looks to be reaching a conclusion, with reports emerging that Xavier McAuliffe and an overseas partner have been chosen as the preferred bidder. McAuliffe was the original developer of the hotel and is believed to have spent c. €50m renovating the hotel after he originally acquired it. Together with his overseas partner, McAuliffe is now expected to pay c. €20m to reacquire the hotel. When McAuliffe last controlled the hotel, he had loans with Bank of Scotland (Ireland) which were secured by the hotel. In 2012, the bank took control of the hotel and later sold the loans to a Goldman Sachs investment vehicle as part of a portfolio sale. The sale process is being managed by the receiver, KPMG. The Sunday Business Post, 31st July
Poolbeg Peninsula: Dublin Port Company is looking at building two hotels in the Poolbeg West strategic development zone in Dublin City. The first hotel would have c. 600-beds and be located on the Poolbeg Peninsula, while the second hotel would be situated near the 3 Arena. The Sunday Business Post, 31st July
Newcastle House: Hong Kong businessman Hau Yan Lee has obtained planning permission to convert Newcastle House in Co. Longford into a 40-bed hotel. There will also be a further 24 beds on the grounds in different buildings. Newcastle House is situated on a c. 42-acre site and dates back to the 17th century. The target completion date for the work on the property is late 2017. A key selling point for the hotel is that it will be located next to the proposed Centre Parcs holiday development in Longford. The Sunday Business Post, 31st July
RESIDENTIAL / LAND
Howth Development: An Bord Pleanála has given Grant Thornton planning permission for the development of 200 residential units, six commercial properties and 487 car spaces on a development site in Howth, north Dublin. Following the planning approval, the estimated value of the site is €25m – €30m. The site extends to 10.87-acres and consists of the former Techrete and Teeling Motors sites (6.58 acres) and lands which were previously known as Baltray Park. The planning application allows for the development of 145 apartments (one to three bed units), 51 houses (three and four bed units) and four houses for the traveller community. The commercial units will have a total floor area of 20,214 sq. ft. Grant Thornton is acting as receiver for the site, having been appointed by NAMA. The Irish Times, 27th July
CIÉ Cork Site: Clarendon Properties and BAM Construction have been chosen as the preferred developers for a site owned by CIÉ in Cork City. The 6.1-acre site is alongside Kent Railway Station and fronts onto Horgan’s Quay and Railway Street. CIÉ has agreed to a 300-year ground lease with Clarendon Properties, for which CIÉ will either receive a set annual rent or else 10% of the market rent, whichever is greater. There is no active planning permission in place for the site however it is zoned as a mixed-use site. According to the developers, the site could facilitate office, residential or leisure accommodation. The Sunday Business Post, 31st July
Glenasmole Valley: The Irish Times reports that The State is in advanced negotiations with NAMA to acquire the c. 5,000-acre Glenasmole Valley site in the Dublin mountains. Although NAMA has valued the land at c. €2.5m (c. €500 an acre), the final purchase price remains unclear, with some market sources projecting that the final selling price may be as low as €1m. The majority of the site lies within a special area of conservation and a special protection area, while also being surrounded by c. 494,000-acres of the Wicklow Mountains National Park. The Irish Times, 27th July
Lisieux Hall: Noel Smyth is reportedly seeking to develop 17 houses and 52 apartments on the site of his Lisieux Hall home in Leopardstown, Co. Dublin. The development would include two five-storey apartment blocks and the majority of the houses would have a floor area of up to c. 2,250 sq. ft. The Lisieux Hall site extends to c. 4.6 acres. The Sunday Times, 31st July
H1 2016 Sales Figures: An analysis of the Property Price Register by MyHome.ie shows that the number of residential properties sold in H1 2016 (20,447) was c. 8.2% lower than in H1 2015 (22,273). Most notably, the cities of Dublin (-13.4%), Cork (-3.8%), Galway (-11.6%) and Limerick (-10.8%) all reported decreases in the number of units sold in H1 2016 when compared to H1 2015. Waterford (13.2%) reported the largest increase in the number of units sold, although it was one of only five counties where the number of units sold in the county increased. The Irish Times, 28th July
Mortgage Lending: A new report by the Central Bank on household lending shows that net mortgage lending increased by c. €105m in June 2016. While this increase was the largest recorded since February 2010, net mortgage lending has decreased by c. €1.6bn in the past year. The report also shows that Irish households continue to be net funders to the Irish banking system, as banks hold c. €6.8bn more in household deposits than in loans issued. In early-2009, household loans were greater than deposits by c. €53.5bn. Central Bank of Ireland, Money and Banking Statistics – June 2016
CSO Property Prices: The June 2016 report by the CSO reveals that national residential property prices rose by c. 6.6% for the year ending June 2016. For the month of June, prices decreased by 0.1% after increasing by 0.2% in May. Residential prices in Dublin decreased by 0.7% in June however prices are still 4.5% higher than they were a year ago. Residential prices in Dublin are now 35.6% lower than their peak in February 2007. Similarly, residential property prices for the Rest of Ireland are 35.4% below their peak in September 2007. The CSO’s property price report is based on mortgage drawdown figures. CSO Residential Property Price Index, June 2016
OTHER
Center Parcs Longford: CP has been granted planning permission by An Bord Pleanála for a c. €232m holiday village in Ballymahon, Co. Longford. The planning permission granted has 21 conditions, including one stipulating that the developer must make a financial contribution towards public infrastructure in the region. The holiday village is to be situated on a 395-acre site and will include 470 lodges, 30 apartments, retail facilities and a “Subtropical Swimming Paradise”. Center Parcs hope to have the development completed by 2019 and the holiday village is expected to create c. 1,000 full-time jobs once completed. The Irish Times, 27th July
Mater Private: The owners of the Mater Private group are reportedly trying to refinance the group’s existing debt. The news comes as the sale of the medical group has been postponed for the second time in 14 months. The majority shareholder in the group is CapVest, who hold a 51% stake. The remaining shares are owned by management and staff. Earlier this year CapVest was believed to have been close to agreeing a c. €500m sale to Fresenius, however the deal was never completed. Approximately 14 months prior to that, CapVest had been in negotiations with Netcare over a potential sale. CapVest acquired their stake in the Mater Private in 2007, when AIB were their main funder. The Irish Times, 29th July
IPD/SCSI Index: The latest report by the MCSI shows that the total return from Irish property in Q2 2016 was c. 3.1%, a slight increase on the return of c. 2.9% in Q1 2016. The best performing sector in Q2 2016 was industrial, which had a total return of c. 5% in the period (income c. 1.8% and capital value growth of c. 3.2%). The office market improved by c. 3.1%, largely due to the Dublin office market rising by c. 5.5%. The return from the Irish property market in Q2 2015 was c. 4.2%. The Irish Independent, 28th July
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