2nd February (Issue 282)

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.




Chatham House, Dublin 2 Lioncor is set to receive €40m from the sale of the redeveloped Chatham House to the European Parliament. Lioncor purchased Chatham House for a reported €10.6m in 2019. The building is currently being developed and will be occupied by the European Commission’s representation and European Parliament liaison. Lioncor looks to be in line for a significant return on its original investment even after the estimated €20m cost of developing the EU’s new Dublin premises is factored in. The “House of Europe”, as the building will be known, will extend to a total area of 33k sq. ft. The Irish Times, 27thJanuary

2 Central Plaza, Dublin 2 Hines and the Peterson Group have secured another tenant for their redevelopment of the former Central Bank HQ on Dame Street. Japanese company Pokemon has agreed to lease 5k sq.ft across the 3rd and 4th floors. It is reported that they have agreed to pay rent of €60 psf which includes a break option on its lease. The Irish Times, 27th January

Leeson St, Dublin 2 QRE have launched the sale of the upper floors of 1-2 Leeson Street Lower. The accommodation extends to 2,400 sq.ft and is let to several professional tenants by way of a direct licence agreement with the landlord. The property is currently producing €88k of rental income but there is potential to increase this to €110k with the letting of the property’s two vacant office suites. They are quoting a guide price of €1.25m which reflects a gross initial yield of c.7.1%, with a potential reversionary yield in the region of c.9%. The Irish Times, 27th January

Heuston Quarter, Dublin 8 The HSE is taking 43k sq. ft of office space in Unit 1 Heuston South Quarter, which is close to the HSE headquarters. The accommodation which is on the 1st and 2nd floors, is in walk in condition and will be used for contact tracing. The terms of the lease were not made available; however, the agents were quoting €37.50 psf but it is believed that the lease is closer to €36 psf. The Irish Independent, 28th January

Deka Immobilien Deka Immobilien has become the third landlord to sue Easons over unpaid rents. Deka has filed papers initiating legal action in the high court against two Easons stores, one at the Whitewater Shopping Centre in Newbridge Co. Kildare and a second in the Mahon Point Shopping Centre in Cork. The Independent reports that sources say that Easons are paying a portion of rent on each of their units but that paying full rent is challenging given the trading restrictions due to Covid. The Easons group is already facing legal action with two of their other stores, Shop Street in Galway and a unit that they occupy in the Galway Shopping Centre. The Irish Independent, 30th January



Blackrock, Dublin Knight Frank has brought to the market a site located on the Deansgrange Road in Blackrock for €8.5m. The site has full planning permission for 120 apartments, along with five ground-floor commercial units, a crèche and a basement car park. It is expected that the site will operate as a rental scheme, even though it was initially designed as a build to sell scheme. The site extends to 0.75 hectares (1.85 acres) and currently comprises a motor dealership. The Irish Times, 26th January

Docklands, Dublin A report from estate agent Owen Reilly says rents have fallen an average of 13% in the docklands since March 2020 and by even more in the upper end of the market. One bedroom apartments have started to become less attractive to couples as they have too little space to work remotely. While the demand for short-term rental has fallen the supply of long term rentals has more then doubled. Owen Reilly’s average rental was €2,312 per month, 6.97% lower than 2019. The report did note that the outlook for the docklands residential market remains strong with the workforce expected to double over the next 2 years to 80k. The Irish Times, 27th January

Phoenix Park, Dublin IRES Reit have completed the acquisition of 146 apartments at the Phoenix Park Racecourse development for €60m. IRES Reit paid Flynn & O’Flaherty Construction an average of €411k per unit. The deal includes a mix of apartments, duplex units and houses, including 20 1 bed and 113 two-bed units. Most of the residential units were built between 2002 and 2007, with 26 constructed recently in a block overlooking the Phoenix Park. The deal takes IRES Reit, the State’s largest private residential landlord’s portfolio total to 3,834 units The Irish Times, 28th January

Residential Funds Residential Funds continue to be very active in the last year and now own a combined 15,500 homes in Ireland. According to CBRE these funds spent €1.75bn in 2020 buying residential units, which was down on the record year of 2019 but demonstrated again how robust the residential sector has been given the challenging environment. Institutional investors are now the main players in the majority of the new build apartments in Dublin. These funds order entire schemes off plans which makes the development viable for developers. These so-called forward-commit transactions accounted for 54% of spend in residential investment in 2020. The Irish Independent, 27th January

Cherrywood, Dublin 18 Housebuilder Quintain has been granted approval for its first phase to build 1,300 new homes in Cherrywood village by 2025. DLR has granted planning permission for 136 new homes at the Cherrywood site. The 136 homes to receive planning permission comprise 80 two-, three- and four-bedroomed houses and 56 duplexes, with construction due to start as soon as the Covid related lockdown on the sector is lifted. The Irish Times, 2nd February



Yew Grove Reit, Dublin Yew Grove Reit, the listed owner of office and industrial assets mainly outside of Dublin, are planning a €50m share raise this year. They had planned to raise these funds in 2020 but their growth strategy has been pushed out by 12 months due to Covid. Yew Grove’s focus on office and industrial assets let to State entities, IDA-supported companies and large corporates has resulted in the company collecting between 97% and 100% of rent collections since Covid struck the economy last March. The Irish Times, 28th January



Social Housing, Dublin Executives in Dublin City Council (DCC) have raised concerns over the price which DCC are being charged for residential units from private contractors for social housing. It was reported in a new Society of Chartered Surveyors Ireland (SCSI) publication that the local authority has paid building contractors roughly €100k more per unit than the private market rate to develop apartments. One of the reasons suggested for the price difference is the lack of contractors available to do a social housing project. The SCSI report also said that DCC paid between €44k and €54k in professional fees for each project. The Business Post, 31st January

Construction Information Services (CIS), Round Up There was a summary of a number of developments which has received or lodged for planning permission in the Business Post which included: (i) Lioncor receiving planning permission for a 628 BTR scheme in Dundrum, Dublin 16 (ii) Gleanveagh applying for a 140-unit €30m apartment scheme in Blackrock, Co. Dublin (iii) Hines applying for a 730-unit €50m BTR scheme at the former Player Willis site in Dublin 8 (iv) Westar Investments have applied for a 333-unit €65m scheme in Clane, Co. Kildare (v) Marlet received planning for a 224-unit €49m apartment scheme in Saggart, Co. Dublin (vi) Glenveagh applying for a 1,002-unit €220m scheme at the former Ford distribution centre in Cork The Business Post, 31st January

Irish Housing Market Housing Minister Darragh O’Brien has said for every week the country is in lockdown between 700 to 800 units will not be built. The government’s 2021 target was to add 12,750 homes to the public housing stock, 9,500 of which were to be new builds. The lockdown will result in the Ministers housing targets being short between 6,500 and 7,000 units. His department has campaigned to have the ban on construction lifted however the ban was extended to March 5th The Journal, 27th January

AIB Loan Sale AIB has sold a portfolio of underperforming loans to an ethical investment consortium, the first such transaction undertaken by a lender in Ireland. Project Iris which contains 620 owner occupier mortgages in long term arrears has been sold to the Home Solution Initiative group, which aims to find borrower friendly solutions to the outstanding arrears problem.  They aim to keep borrowers in their homes where possible. It is reported that the loan sale had an original value of €150m and 95% of the loans had been in default for longer then 5 years. The Irish Times, 29th January

Parnell Square, Dublin 1 The Sunday Times reported that Kenedy Wilson and Dublin City Council have wounded down a joint venture project that was to redvelop Parnell Square West into a new cultural quarter. The redevelopment project was to include a new city library, conference center, music center, educational facilities and exhibition space. It was estimated the cost of the redevelopment was going to be €60m. The funding of the project was to be raised through a philanthropic foundation managed by Kennedy Wilson and the council. It is reported that estimated costs increaed to €130m and fundraising targets were pared back leaving a greater cost burden on the council. The Sunday Times, 31st January

If you have an article which you would like to have considered for inclusion in our next weekly report, please contact us at info@origincapital.ie

Origin Capital funds senior debt transactions in the CRE investment sector, typically in excess of €3m, and has lent over €200m to clients since April 2015.

Origin Capital is a wholly owned subsidiary of LeBruin, a leading provider of corporate finance solutions.

If you would like to discuss how Origin Capital can help with your funding requirements, please contact us on 01 662 9264.