30th January (Issue 432)
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
Elmpark Green, Dublin 4 Tetrarch and Marlet are among the final bidders vying for two large office blocks in Dublin 4. Last year, eight buildings in the Elmpark Green portfolio, owned by Starwood, the US private equity firm, were brought to market for a guide price of €55m by CBRE. The most prominent building in the sale is the Seamark Building, a 184,984 sq. ft office block that faces onto Merrion Road. The seven-storey building now has top ESG credentials following a €45m refurbishment of the property in 2018. Other assets for sale include a creche, leisure centre and the Vista Building, an eight-storey office block located behind the Seamark building. A property industry source told the Business Post that the property is not expected to fetch the guide price, with the final sale predicted to fall between €45m and €55m. The Business Post, 28th January
Fenian Street, Dublin 2 TikTok, the Chinese-owned video sharing platform, has backed out of a 70,000 sq. ft Dublin letting in the final stages of the deal. The social media giant had been expected to take additional space at Cumberland House, where it was involved in negotiations to sublease space from X (formerly Twitter). Those discussions, believed to have been at an advanced stage towards the end of last year, are now understood to have ended. TikTok’s decision not to push on with the letting deal is related to a slowdown in hiring activity, aiming to manage headcount within its existing Dublin office estate. The group has leased 80,000 sq. ft from Iput at the Tropical Fruit Warehouse and occupies approx. 200,000 sq. ft at Mapletree’s Sorting Office. React News, 25th January
Point Square, Dublin 1 The Penthouse at Point Square, immediately adjacent to the new headquarters of An Post and the 3 Arena, is available from this September. It comprises a total of 60,860 sq. ft of space distributed across levels 5 to 7 of the building. Floors 5 and 6 extend to 21,200 sq. ft each while the seventh floor measures 17,200 sq. ft. The office’s reception area accounts for the remaining 1,260 sq. ft of space. The Penthouse offices are being offered to let by Savills Ireland on either a single- or combined-floor basis and are expected to command a rent of approx. €48.50 per sq. ft. The Irish Times, 24th January
Earlsfort Terrace, Dublin 2 Dublin City Council has given the green light to property group Iput plc to demolish Deloitte House and Garryland House on Dublin’s Earlsfort Terrace and replace the buildings with a nine-storey office block. The council gave the go-ahead after Iput plc lodged revised plans reducing the height, scale and mass of the planned office block at 25-29 Earlsfort Terrace off Stephen’s Green in Dublin 2. The scaling down of the scheme reduced the gross floor area by 6,049 sq. ft to 333,573 sq. ft. The grant of permission came despite the Irish arm of aircraft leasing giant, Air Lease Corporation, and property group Hibernia Real Estate Group lodging separate objections to the scheme. The Irish Times, 29th January
MIXED-USE
Grafton Street, Dublin 2 The owners of Grafton Place and 60 Dawson Street, a newly built office, retail and leisure complex in Dublin city centre, are considering its sale for between €250m and €300m. The Sunday Times understands that BCP and Mark have gone to the market in recent weeks to ask estate agents, including Eastdil and CBRE, to pitch for the business of marketing the sale. It is understood that 80% of the building, which was completed last summer, is now leased. The American software group ServiceNow has signed a 12-year lease for the top four floors of the 60 Dawson Street offices at a rent of just over €6m a year. Last year the social media giant Pinterest agreed to take a 12-year lease on the second floor for approx. €1.9m. The ground-floor retail element, Grafton Place, has attracted Sandbox VR, a virtual-reality gaming company, as a tenant. Mark, an international private equity real estate investment manager, and the Dublin wealth manager BCP paid more than €90m for Nassau House in 2015 and bought neighbouring buildings to complete the scheme. The Sunday Times, 28th January
RETAIL
South King Street, Dublin 2 Zara, the popular Spanish fashion label, has announced a major expansion of its store on South King Street in Dublin city centre. It has had a retail presence on South King Street for 16 years. Now, its existing outlet, located opposite the side entrance to St Stephen’s Green shopping centre, is set to more than double in size from 13,993 sq. ft to 33,002 sq. ft, absorbing the adjacent former corner retail space previously occupied by H&M. The stores are located within the Chatham & King block development of offices, retail and residential units between Chatham Street and South King Street, which is owned and managed by Hines European Core Fund (HECF). The Business Post, 28th January
HOSPITALITY
Sandyford, Dublin 18 Whitbread PLC, the UK hospitality group, plans to open a new hotel in Sandyford Business District in Dublin following its acquisition of the long leasehold interest of a development site at Sandyford Business Park in Dublin. It will be located at a site currently occupied by The Wall Climbing Gym at 5 Arkle Road. Whitbread intends to submit a planning application for the 150-bedroom Premier Inn hotel on the site where the freehold is held by Dún Laoghaire-Rathdown County Council. Whitbread currently operates a network of four trading Premier Inn hotels in Dublin city centre as well as a large hotel at Swords, near Dublin Airport. The Irish Independent, 25th January
Temple Bar, Dublin 2 Hotels Properties, the hospitality and hotel management group headed by Sheila O’Riordan, has acquired the newly developed Wellington Hotel in Dublin’s Temple Bar for approx. €14m. The price paid for the boutique venue represents a 22% discount on the €18m which had been sought for the property when it was first offered to the market by CBRE in May 2022, and a lesser, 5% reduction on the hotel’s most recent asking price of €15m. The sale of the property was handled by joint agents Colliers and CBRE on behalf of receiver Kroll Advisory Ltd. The Wellington briefly comprises a 38-bedroom hotel complemented by bar and restaurant facilities extending to 3,660 sq. ft. The Irish Times, 24th January
Galway CBRE is guiding a price of €5m for the well-established Sleepzone Hostel in Galway city. Located on Bóthar na mBan and within a short walk of Eyre Square, Sleepzone Galway comprises a purpose-built four-storey accommodation facility with 180 bed spaces distributed across 35 rooms. The property, which sits adjacent to Corrib Shopping Centre car park, comes for sale in excellent condition having benefited from ongoing investment by the current owner. The Irish Times, 24th January
RESIDENTIAL / DEVELOPMENT
Swords, Co Dublin Ryanair has bought most of the homes in a new estate close to Dublin Airport to rent them to crew in a bid to combat the impact of the Republic’s housing crisis on its operations. The airline recently signalled that it would consider buying homes to rent them to staff as a lack of affordable accommodation here was hindering its ability to hire flight crews. Ryanair confirmed on Thursday that it had bought “25 new-built units in Fosterstown, Swords” to provide affordable rents for new cabin crew in Dublin Airport, where it operates up to 33 aircrafts. The company did not say how much it was paying, although property industry figures indicate it could be between €8.5m and €10m. Family homes in the area sell for €350k to slightly more than €400k. The new estate is approx. 3.5km from the airport, close to bus routes and is a 20-minute drive to Dublin city centre. The Irish Times, 25th January
Minister for Housing Darragh O’Brien said he was “frustrated” to see Ryanair buying up most of the homes in a new estate close to Dublin Airport, which the airline planned to rent to crew. However, he said the development predated changes in the planning laws that would no longer facilitate such a purchase. While he said he was frustrated by the purchase, the Minister said it represented only 25 homes of thousands being built in Swords, or approx. 1% of overall property transactions. The planning law was changed in May 2021, when a stamp duty charge of 10% on the multiple purchase of 10 or more residential houses was imposed. However, this does not apply to developments which got planning permission before this date. The Irish Times, 29th January
Irish Residential Properties REIT (Ires) The largest stakeholder in Ires has announced it will back the sale of the Irish firm’s €1.5bn property portfolio. Canadian property fund Capreit has revealed that it intends to support several proposals brought forward by activist investor Vision Capital, including the sale of the of the company. Capreit holds an 18.7% stake in Ires. React News, 26th January
Savills Report There was a major drop in the value of land transacted last year, according to a new report from Savills Ireland. In 2023 €515m worth of land transacted, of which, 62% was traded in the final quarter of the year, according to the report. This is down from over €751m of land deals transacted in 2022. One of the biggest deals last year involved the disposal of the former Jury’s Hotel in Ballsbridge to the US State Department for €152m, representing the price paid for a cleared site, Savills said. Residential lands constituted over half of sales volumes in 2023. There were acquisitions from both the Land Development Agency and Fingal County Council for sites in Clongriffin and Swords, at a price of €38m and €27m respectively. The Business Post, 25th January
Planning Permissions Ongoing delays within An Bord Pleanála to make planning decisions on more than 20,000 housing units has added €125m to the cost of these homes, a new report has estimated. The 2024 construction sector report published by Mitchell McDermott, an industry consultancy firm, has found there are currently 20,683 residential housing units submitted under the Strategic Housing Development (SHD) process in 2022 that are still awaiting a decision from An Bord Pleanála due to a significant backlog within the agency. The firm said planning decisions on these remaining SHD housing projects are now overdue by an average of 16 months and the ongoing delays had added an extra €125m in project costs – the equivalent of an extra €6k per home. Combined with the additional 8,139 planned housing units that are currently subject to judicial review proceedings, the report by Mitchell McDermott said there are approx. 29,000 homes caught in planning limbo. While the SHD process has not worked and been ended by the government, the Mitchell McDermott report said the new dedicated planning process for Large-scale Residential Developments (LRD’s) is showing early signs of functioning effectively. The report found that 98% of all LRD projects to date have been decided on time by An Bord Pleanála, and there are no outstanding judicial review challenges against projects in the system. The Business Post, 25th January
Banking Payments Federation of Ireland (BPFI) data released show that the number of mortgage drawdowns for first-time buyers in 2023 reached the highest level since 2007. However, overall mortgage activity was down slightly, as the number of people re-mortgaging dropped on the previous year by approx. 80%. In the last quarter of 2023, 11,584 new mortgages were taken out, to the total value of approx. €3.3bn, a decrease of 27.1% in volume and 24.4% in value from the last quarter of 2022. First-time buyers represented the largest segment of the market, at 62.7% of mortgages in that quarter, making up 63.9% of the value. Also released was the BPFI mortgage approvals report for December 2023, which showed that 60.6% of the 2,793 approved mortgages were for first-time buyers, with 22.8% representing mover purchasers. The Business Post, 26th January
House building in Ireland last year hit its highest level since the Celtic Tiger with more than 32,000 new homes completed. Of that, more than 10,000 were finished off in the last three months of the year, new figures show, a rise of 13% on the period in 2022. New figures from the CSO show new dwelling completions totalled 32,695 in 2023, which represented an increase of 10% on 2022. The final outturn of new homes was ahead of the Government’s Housing for All target of 29,000 units for the year. However, despite the higher than anticipated level of completions, supply remains well short of demand, which the ESRI and others have suggested is in excess of 50,000 homes per year. The Business Post, 25th January
Skehard Road, Cork Planning permission has been granted for 90 new homes on Cork’s Skehard Road on a site that was previously refused permission for a mixed-use development that was to include an Aldi supermarket. Developers Lyonshall have been granted permission that includes 26 one-bed units, 48 two-bed homes along with 12 two-storey townhouses. The planned development is located at ‘Villa Maria’ and its adjacent lands. In 2021 the company lodged plans for the same site for a scheme with 28 homes, an Aldi supermarket and a cafe. However, this was refused by City Hall planners. In June last year, Lyonshall lodged fresh plans for the current residential scheme. The Irish Examiner, 29th January
Tramore, Co Waterford A plan to build 20 new homes in Tramore, Co Waterford, has been approved. Kilkenny Investment Property Holding Ltd has been granted permission by An Bord Pleanála, after the matter was appealed. Waterford City & County Council had granted permission to the developers, but a third-party appeal saw it referred to the board. The development is located on a 1.80-acres site in Newtown, Tramore, and is accessed via the R675 Tramore coast road. It includes 20 independent living units. A third-party appeal was made by the owners of a property adjoining the southern site boundary.
Separately, a planning application for 19 new houses in Kilbrittain, Co Cork, has been lodged. Cork County Council has received an application from Peppard Investments Limited for the construction of 19 new houses. The development would be located along Meadow View Road, and includes improvements to the junction of the R603 and the L6105. Also in Cork, planning has been granted for the development of an Italian delicatessen in Youghal. The Irish Examiner, 26th January
Mortgage-To-Rent Scheme (MTR) Australian bank Macquarie, two other private-sector groups and two approved housing bodies have been selected by the Government to offer MTR solutions for lenders and borrowers dealing with loans that have no prospect of being repaid, according to sources. MTR solutions allow defaulting borrowers to remain in their homes as renters after agreeing to surrender ownership of the property. The Department of Housing and the Housing Agency has also selected an entity called Irish Homes. The third private-sector entity is Fresh Start Homes. Meanwhile, the two entities selected for the non-private-sector element of the new mortgage-to-rent plan are iCare and fellow housing body Foscadh Housing. Irish mortgage default cases have fallen from a peak of approx. 13% of owner-occupier home loans in 2013 to 4.1% as of the end of September, according to the Central Bank of Ireland. However, approx. 7,900 borrowers were more than five years in arrears. The Irish Times, 30th January
OTHER
According to QRE’s Q4 2023 Market Update, 28 deals totalling €442m were completed with an average lot size of €15.75m. Industrial sector accounted for 58% of this while Office and Retail accounted for 18% and 14% respectively. 80%+ of the spending was concentrated in the Greater Dublin Area. The top 10 transactions accounted for 86% of all investment turnover. The total investment spending for 2023 was €1.85bn, the lowest in 10 years. Notably, no PRS transactions were completed in Q4 2023. QRE Report, 29th January
Blackrock, South Co Dublin An office building in Dublin is to be turned into a grinds school. The owners of the Dublin Academy of Education have applied for planning permission to turn the five-storey Frescati House in Blackrock into a school. The building is owned by the Slazenger family, owners of the Powerscourt Estate in Co Wicklow. The family put the building on the rental market last year. A planning notice published last week said permission was being sought for 22 classrooms, offices, a study hall, common areas and staff facilities. The Sunday Times, 28th January
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