2nd February (Issue 31)
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.
OFFICE
City Square: The Sunday Business Post reports that City Square, a seven storey office property located at 61 – 64 Marlborough Street in Dublin 1, has been sold for c. €21m. The sale price is c. €3m above the guide price quoted by joint agents DTZ Sherry Fitzgerald and Finnegan Menton. While the purchaser has not been officially announced, it is believed to be an Irish insurance company. City Square has a floor area of 36,855 sq. ft. and is let to An Bord Pleanála at €1.27m p.a., with c. 11 years remaining on the lease. The Sunday Business Post, 31st January
Custom House Plaza: Killeen Property, which is owned by the daughters of Tim Mahony, the founding chairman of Toyota Ireland, has purchased 2 Custom House Plaza in Dublin’s IFSC for over €15m. The 29,430 sq. ft., five storey office block has 29 car spaces and its tenants have a weighted average unexpired lease term of 5.19 years. The current rent roll of the property, which is fully let, is c. €990k p.a. Tenants include PTSB Finance, TD Global Finance and Calypso. The current rent for the property equates to c. €32 psf, which is significantly below the peak rents in the IFSC of c. €45 psf. The Irish Times, 27th January
The Exchange: The Irish property fund IPUT is to fund the development of The Exchange, a new €80m, Grade A office property in Dublin’s IFSC. IPUT purchased the site of The Exchange for €25m from the Cosgrave Property Group, who will oversee the development. The Exchange will have a floor area of 110,000 sq. ft. spread over six storeys, with 37 basement car spaces. The Exchange is expected to be completed by September 2017. The Irish Times, 27th January
One Earlsfort Terrace: Hibernia REIT has been chosen as the preferred bidder for One Earlsfort Terrace in Dublin 2 after bidding c. €19m, €3m above Knight Frank’s guide price. The 21,750 sq. ft. property is currently let to the law firm Eversheds at €630k p.a. (€25.85 psf), with c. 11 years until the lease expires. Under the terms of the lease the rent will rise to a minimum of €750k (€31.45 psf) in 2016 and €850k (€36 psf) in 2021. However should the open market rent be higher at the time of each rent review, then the revised rent will be set at that amount. Prime rents in Dublin 2 are currently set at €55 – €60 psf. The Irish Times, 27th January
Boland’s Mill: Joint agents JLL and Lisney are shortly expected to announce the commencement of the marketing campaign for the commercial units of the Boland’s Quay redevelopment in Dublin’s south docklands. The project will see the development of three new buildings which are expected to have c. 397,000 sq. ft. of office, residential, retail and cultural space. The total cost of the project is estimated at €150m. The Irish Times, 27th January
George’s Quay House: Fidelity International has agreed to lease 68,000 sq. ft. of office space from Green REIT over two leases in George’s Quay House in Dublin 2. Fidelity will pay a rent of €49 psf on each lease. The leases are for 26,500 sq. ft. and 41,500 sq. ft., with the space previously let to the Royal Bank of Canada, Invesco and Twitter. Green paid €375m in June 2014 to purchase George’s Quay and George’s Court from the Cosgrave Property Group. The Irish Times, 27th January
New Generation Development: New Generation has confirmed that they will shortly apply for planning permission from Dublin City Council for a development in Dublin’s south docklands which will provide 400,000 sq. ft. of office space and 200 apartments. The site owned by New Generation runs from Lime Street to Hanover Street East, with the development expected to cost c. €250m. Greg Kavanagh and Pat Crean of New Generation advised that they had already been approached by potential tenants for the office space, which is uncommon before planning permission is sought. The Irish Times, 29th January
HOTEL
Conrad House: The five star, 192-bed Conrad Dublin on Earlsfort Terrace is to undergo an €8m renovation as the owners look to build on a strong year of trading in 2015. Turnover for the hotel was close to €16m in 2015, which was in line with trading prior to the recession. Of the renovation, €4m is to be spent refurbishing the 192 bedrooms with a further €4m being spent remodelling the ground floor. Ownership of the hotel is split between Hilton Worldwide, an investment fund known as the Cashel Fund and Aviva. The Irish Times, 2nd February
Pillo Hotel: Savills are guiding €8m for the Pillo Hotel in Ashbourne, Co. Meath. The four star, 148-bed hotel is being sold on the instructions of the receiver KPMG, who was appointed by the former Anglo Irish Bank. The hotel is trading profitably and in an attractive location near Tayto Park and Dublin Airport. When the hotel opened in 2007 it operated under the Marriott brand, however its new owners will be free to trade under a new brand. The leisure centre of the hotel is also highly sought after with over 1,000 members. The Irish Times, 27th January
Dalata Acquisitions: Dalata’s recent spending spree continues following the announcement that they have reached an agreement to acquire the leasehold interest in four hotels which have a combined enterprise value of €40m. The four hotels are the Gibson Hotel in Dublin, the Croydon Park Hotel in south London, the Clarion Hotel in Cork and the Clarion Hotel in Limerick. Dalata is to undertake a major renovation of the four hotels at a cost of c. €14m over the next two years. Dalata will also rebrand the hotels as Clayton hotels. The deal will also see Dalata assume management of the Clarion Liffey Valley Hotel in Dublin under a short term contract. The total number of rooms of the Irish hotels is 960 while the Croydon hotel has 211. The Irish Times, 28th January
RESIDENTIAL
Howth Development: Despite a significant level of opposition from local residents, Fingal County Council has approved a planning application to develop 200 residential units and six commercial units on a 10.87 acre site in Howth, Co. Dublin. The existing buildings are to be demolished and replaced by five apartment blocks comprising 145 units, 55 houses and commercial units which include retail, restaurants / cafes and a gym. The application was submitted last August by Grant Thornton, who are acting as receivers over Ray Grehan’s Glenkerrin Homes. The Irish Times, 1st February
O’Flynn Transactions: Developer Michael O’Flynn has announced two projects in Cork. The first has seen the US fund Blackrock provide O’Flynn with a €5m contract to fit out the final 137 apartments of the 17 storey Elysian tower, which O’Flynn developed in 2008 for over €100m. Blackrock subsequently secured ownership of the tower after they purchased O’Flynn’s assets from NAMA in 2014. The tower comprises 217 apartments in total, with 74 currently rented and six already sold. In a separate transaction, O’Flynn has purchased a 42 acre site in Kerry Pike, where he is planning to build a minimum of 100 homes. The Irish Times, 30th January
Market Statistics: The latest figures from the CSO show that national property prices rose by 6.6% in the 12 months ending December 2015, following a 0.5% increase in the month of December. While prices in the cumulative Dublin market rose by 2.6% over the twelve month period, apartments reported the biggest rise, up 7.8%. Outside of Dublin, prices rose by 10.2% during the same period. Irish Independent, 27th January
OTHER
RTE Site: The board of RTE has agreed in principle to sell a portion of their 32 acre site in Donnybrook, Dublin 4. RTE are seeking to undertake a c. €50m capital expenditure programme over the next few years and intend to use the sale proceeds to part fund the programme. The Donnybrook site is believed to be worth c. €5m – €6m an acre. CBRE and KPMG were retained by RTE last year to advise on their strategic options, which included selling the entire site. The Sunday Times, 31stJanuary
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