2nd March (Issue 286)
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
Colony Capital It is reported in the Sunday Times that Colony Credit Real Estate (CCRE) has written down the value of loans it has advanced to a development site on the Dublin docklands amid concerns about the effects of the pandemic on the progress of the project and the property market. The fund has also indicated to investors it would prefer to exit the project. CCRE funded Ronan Group Real Estate (RGRE) and Colony Capital, a related company, in the 2018 purchase of a 4.6-acre plot located next to the 3Arena and Point Village. Last week RGRE applied to An Bord Pleanala to fast-track the planning to build a 45-storey residential tower on the site. This would be the tallest building in the country. CCRE holds a 61 per cent “co-lender interest” in a $310 million (€256 million) mortgage secured on the property, the last remaining riverfront development site in the docklands.
Two-and-a-half years into the loan, little progress has been made, and CCRE has flagged up concerns about the fallout from the pandemic. Last week it recorded “a fair value loss adjustment” totalling $58 million on the loans, representing a 30 per cent marking down of its interest. The Sunday Times, 28th February
Talbot Street, Dublin 1 Creditsafe, an online business credit reports provider, has relocated from Parkwest Business Campus to Dublin city centre. The company has committed to a 10-year lease assignment from head tenant, Smartbox, for the first floor in Block B, at Joyce’s Court on Talbot Street. Creditsafe has agreed to pay a rent in the region of around €26 per sq.ft and €2,500 per car space per annum for six car spaces, along with incentives. Creditspace have taken a floor plate in the building which extends to 5,995 sq.ft. The Irish Times, 24th February
Pembroke Road, Dublin 4 Colliers has brought 12 Pembroke Road in Dublin 4 to market guiding €1.35 million. The property is being sold with the benefit of vacant possession and is 2,281 sq.ft (€592 psf). The property is mixed use and in need of refurbishment. Given the location Colliers believe the property should appeal to professional practices looking for a boutique office in Dublin 4. The Business Post, 28th February
Model Farm Road, Cork Lisney, along with BidX1 are launching the sale of a suburban office: Block A, Cork Business and Technology Park, Model Farm Road for €1.9m. Block A’s main tenant is S3 ASIC Semiconductors (a subsidiary of Dialog Semiconductor, which employs 2,300 in 37 locations globally). They are entering into a new, ten-year lease from 2020 with a rent of €116k p.a (c.€16 psf) exclusive, with a break option in year six. The first floor has just been vacated and there is potential to increase the rental income in the building to €232k p.a. The Irish Examiner, 25th February
Monahan Road, Cork It was also reported in the Irish Examiner that a lease of 8,200 sq. ft at The Cube, Monahan Road was agreed with Microchip which they will use for a research and development centre. This will create 60 jobs initially and rising to a projected 300. The deal to the Arizona-based company at c.€20 psf, was managed via joint agents Savills and Lisney The Irish Examiner, 25th February
RESIDENTIAL / LAND
Santry, Dublin 9 Irish real estate investor Avestus Capital Partners has paid €38m for 120 rental apartments (€316.6k per unit) in Santry. “The Swiss Cottage scheme” was developed by Bernard McNamara and it is reported that the deal was agreed in 2019 but only closed over the last few weeks. The Swiss Cottage scheme comprises other ancillary residential facilities including communal open space, roof terraces, residents’ lounges, a concierge service, meeting rooms and a laundry room. The portfolio consists of a mix of 26 one-bedroom units, 91 two-bedroom units and 3 three-bedroom units within a single block ranging in height from three storeys to seven storeys. The Irish Times 24th February
Meath Site Joint agents CBRE and Bannons are guiding €2.5m for zoned land in Dunboyne Co. Meath. The site extends to 3.54 acres and is located at the centre of the town, to the rear of St Peter and Paul’s church and immediately adjacent to the new SuperValu development. Dunboyne train station is situated 1km from the property. The site is located in an area zoned “B1 town/village centre” under the draft Meath County Development Plan 2020-2026. Residential development is also permitted under the current zoning objective. The Irish Times 24th February
Foley Street, Dublin 1 Dublin city council has refused plans for a 12-storey shared-living project on the city’s northside, on the grounds it would constitute overdevelopment and because the number of residents per communal living area was deemed unsatisfactory. Red Rock Foley Street, a company connected to Keith Craddock, was the applicant for the development. The proposed 102-bedroom project provided total occupancy for 162 bed spaces. Amenities included a games room, coffee area and lounge on the ground floor and a gym on the first floor. Communal kitchen, living and dining areas were provided at each level from the second to the 11th floors. The Sunday Times, 28th February
INDUSTRIAL
Core Portfolio Just over three years after pulling back from an initial public offering, Core Industrial is hoping to benefit from the strong demand for industrial and logistics assets in the greater Dublin area by putting their portfolio up for sale which could be worth close to €100m. The sales process is being manged by CBRE and Eastdil Secured. The Core portfolio includes properties in Rathcoole, Clondalkin and Finglas. Its largest single asset is Naas Enterprise Park in Kildare. The Irish Times 24th February
M7 Real Estate M7 Real Estate has completed three leases on behalf of a major financial institution at logistics properties in or close to Dublin totalling 138,460 sq.ft. The largest of the three lettings sees Caulfield Transport taking all 113,000 sq.ft at the former Kildare HQ office and distribution facility of convenience store operator ADM Londis. The transport warehousing and logistics specialist has agreed to occupy the premises on a 10-year lease with a fixed rental uplift at the end of year five. M7 Real Estate had only acquired the building in August 2020 for €6.25m. M7 Real Estate has completed two further lettings at North Park, Finglas, where an existing occupier, Cyclone Couriers, has taken 12,500sq ft across two units to support its expansion. It has signed a five-year lease at €9.50 per sq.ft. A 12,960 sq.ft unit has also been let to air-filtration systems provider Camfil Ireland, at just over €10 per sq.ft on a five-year lease. The Irish Times 24th February
RETAIL
Retail Rents In its latest bimonthly report CBRE state that some retailers are negotiating up to 20% rent reductions as they continue to be affected by the Covid 19 restrictions with more substantial discounts being achieved by shops negotiating new lettings in certain locations. The CBRE report states that until the retail sector is back trading in a meaningful way, it will be difficult to gauge the full extent of the impact that Covid-19 has had on the high street and retail schemes throughout the country. The Irish Independent, 1st March
Clonsilla, Dublin 15 Savills has launched a filling station in Clonsilla for sale and are quoting €3.5m for the property, which is let to Petrogas Group Limited, a subsidiary of Applegreen plc. Its annual passing rent of €277,319 equates to a 7.21% net initial yield and its lease provides for open market or CPI upward only rent reviews in 2025 and 2030. Its lease has almost 14 year to run. Set on a 0.5-acre site, the property includes a retail building extending to a gross internal area of about 1,454 sq.ft together with a forecourt and canopy, four double-sided petrol pumps, car wash, and parking facilities. The Irish Independent, 25th February
HOTELS
Dublin Hotels It is reported in the Irish Independent that two new hotels in Dublin with a total of almost 350 rooms have been appealed to An Bord Pleanála. A Dutch company CitizenM received approval from DCC for a 247-bedroom hotel close to St. Patricks Cathedral which will be its first hotel in Ireland. The proposed scheme was the subject of several objections including one from politician Mannix Flynn on behalf of local residents. Plans for a 98-bedroom hotel by Cathedral Leisure which owns the five-star Merchant Hotel in Belfast have also been appealed to An Bord Pleanála. Mannix Flynn is also an appellant to the Capel Street hotel plan. The Irish Independent, 28th February
Dalata Pat McCann, the chief executive of hotel group Dalata, is to step down from his role following a transition period. Dermot Crowley, currently deputy CEO, will succeed Mr McCann. McCann has been instrumental in growing Dalata, and its Clayton and Maldron brands, into a leading player in the hotel sector in Ireland and the UK. Having founded the business in 2007, he has successfully transformed Dalata, creating a listed business comprising 44 hotels, 9261 bedrooms and a pipeline of 13 new hotels with 3300 rooms. Mr Crowley was appointed as deputy CEO, business development and finance of Dalata in 2012 and played a key role in the flotation of Dalata in 2014 and led the acquisition of the Moran Bewley Hotel Group in 2015. The announcement was made as the group reported a loss after tax of €101m in respect of last year. The group said its “proactive” cost reductions and government support schemes protected employment and cash during periods of low occupancies. Dalata’s balance sheet includes hotel assets of €1.2bn. Revenue at the group fell by 68pc last year to €136.8m, as the tourism sector was particularly badly impacted by the Covid-19 pandemic. During the year the group had 31% occupancy, compared to 83% in 2019, according to annual results. The Irish Independent, 2nd March
OTHER
Midleton, Cork It was reported in the Irish Examiner that BlackBee has purchased an investment property at Watersedge in Midleton for c. €5m. The current rental income generated from the investment is €336k with the potential to increase this to €416k. The property includes a restaurant unit let to McDonalds, which is generating c. €80k p.a., as well 36 apartments, offices and retail space, on c.15 acres within the town. The sale was managed by Lisney, The Irish Examiner, 25th February 2021
Data Centres The Business Post report that Dublin’s position as a leading data centre location in Europe is facing increased competition. This is the findings from Cushman and Wakefield (C&W) in their 2021 Global Data Centre Market Comparison report. The C&W report is based on a global study and ranks Dublin as seventh in the world’s top 10 with 150 megawatts of active development under way. Dublin was also ranked number one in terms of the safety of its location due to the minimal risk from earthquakes, tornadoes or flooding. It comes as another report, from construction consultants Mitchell McDermott (MM), estimates that over €7 billion will be invested in the construction of data centres in Ireland over the next 5 years. MM’s report ranks Dublin as the largest data centre market in Europe with London its closest rival among the key FLAPD group (Frankfurt, London, Amsterdam, Paris and Dublin). The Business Post, 28th February
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