30th November (Issue 325)

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.




The Novelty Portfolio, Dublin and Galway Agent Harvey expects to see strong interest in the sale of the “Novelty Portfolio”, a mix of industrial and office properties distributed across three locations in Dublin and Galway. The investment is being offered to the market individually or as one lot at a guide price of €48m. The portfolio comprises three assets, located in Cloverhill Industrial Estate, Clondalkin, Dublin 22 (guide price €17m), Mervue Business & technology Park, Galway (guide price €19.5m) and Swords Enterprise Park (guide price €11.5m). Taken together, the offering makes up c. 447,000 sq. ft. of accommodation and generates income of c. €3.15m, representing an overall net initial yield of 6%. Cloverhill Industrial Estate comprises c. 210,000 sq. ft. of industrial and warehousing accommodation. 85% of the property is occupied by Primeline VNE Ltd until April 2022. The remaining 15% of the scheme is occupied by Broderick Bros Limited on a lease that offers a rent review in November 2023 and a mutual break option in November 2025. Mervue Business & Technology Park occupies a prime location in Galway. Units 20-29 comprise one manufacturing unit and one office unit, which are leased to HID Global Ireland Teoranta and Avaya International Sales Ltd respectively. Swords Enterprise Park is a modern development comprising 61 units, 33 of which are light industrial units and the remaining 28 own-door office properties. The occupancy levels at the scheme are c. 93% and the selling agent notes that there is potential to increase rental income as vacancies and rent reviews arise. The Irish Times, 24th November

For lending terms on this asset please contact rossmetcalfe@origincapital.ie

Bishop’s Quay, Limerick Construction work has commenced on a new €80m office and residential development on Limerick’s Bishop’s Quay. The nine-storey riverside block, which has been officially named 1BQ, will be built on the site of the old ESB building and is led by the development company, Kirkland Investments. It is due for completion in the autumn of 2023. 1BQ will comprise 110,000 sq. ft. of office space and 34 luxury apartments, retail space for hospitality businesses and more than 100 underground car parking spaces. Cushman & Wakefield and Savills are the joint commercial agents on the development. The Irish Examiner, 24th November

Kennedy Quay, Cork O’Callaghan Properties has submitted a planning application for a €350m project that would see office and residential units constructed on Cork’s South Docks. The proposal involves a 1,000,000 sq. ft. development on a 4.2 acre site at Kennedy Quay, with a 122,000 sq. ft. 130-bed private rehab hospital run by the Orpea Group, 450,000 sq. ft. of office space and 80,000 sq. ft. of residential development. The plans also include the renovation and re-purposing of the Odlums Mills grain storage silo on the site. The main office complex will be spread over three buildings ranging in height from nine to 12 storeys, and the new apartment development with 80 build-to-sell apartments will be within an 11 storey tower block. React News, 24th November



Santry, Dublin 9 Agent Lisney is guiding a price of €3.5m for a parcel of prime industrial/enterprise land next to Dublin Airport. Located on the Swords Road in Santry, the subject site extends to 5.13 acres and is zoned GE (general employment) under the Fingal Development Plan 2017-2023. This allows for a range of uses including enterprise centre, high technology manufacturing, warehousing and logistics. The lands are situated 1km south of Dublin Airport and 8km north of Dublin city centre. The Irish Times, 24th November

Naas, Co Kildare Located immediately adjacent to Globe Retail park, a site on the outskirts of Naas, Co Kildare extending to 11.26 acres has been brought to the market by agent Lisney guiding €3m. The site has 145m of frontage on to the Monread Road and is zoned for industry and warehousing under the draft Naas Local Area Plan (LAP). Uses permitted in principle under this zoning include industry, motor sales, service station and warehousing. The Irish Times, 24th November



Hanover Quay, Dublin 2 Deka Immobilien is closing in on the purchase of the European headquarters of Airbnb in Dublin’s south docklands. While the sale of 8 Hanover Quay has yet to be completed, it is understood that Deka has agreed to pay in excess of the €41.5m joint agents BNP Paribas Real Estate and Savills had been guiding. The German headquartered investor entered the Dublin office market in late 2019 with the purchase of the Reflector office building on Hanover Quay for c. €155m. No. 8 is let in its entirety to Airbnb Ireland Limited under a full repairing and insuring lease, with a full parent company guarantee in place from Airbnb Inc. The next break option in AirBnb’s lease is in March 2030, giving 8 Hanover Quay an attractive term certain of 8½ years, and a weighted average unexpired lease term of 14½ years with the expiry in 2036. The Irish Times, 24th November

Office Letting, Ireland The final three months of 2020 saw the lowest levels of reserved space (in legals but not signed) in the last ten years, while the country was in lockdown. 12 months on, however, there is a significant increase in reserved space. The figure sits currently at 1,001,044 sq. ft., a level that has not been seen since Q2 2019. It is likely that it will take c. six months for this reserved space to convert into signed leases. With further demand expected, however, 2022 will see the first real signs of post Covid-19 recovery. 2023 could see activity rise to that of 2019 with take up getting back to the ten-year average of c. 3,014,000 sq. ft. per annum and single-digit vacancy rates. One of the main trends that has emerged this year has been the demand for “grey space”, or space that is being offered by tenants. Grey space take-up for year-to-date in 2021 now exceeds the total take-up of grey space in all of 2019, before the coronavirus pandemic. The most dominant sector experiencing this trend is technology, accounting for 32% of all grey space take-up in first three quarters. LinkedIn has reserved c. 75,347 sq. ft. in Park Place for signing in Q4, forming part of Wilton Park, a 600,626 sq. ft. campus being developed by Iput. There are significant deals in train relating to more than 39,826 sq. ft. at 124/127 St Stephen’s Green and a further 75,347 sq. ft. at One Park Place. These are due to be signed in Q4, which will continue the momentum of grey space activity. Demand is expected to continue in 2022. However, the availability of good quality grey space is diminishing, with the average size availability at less than 10,010 sq. ft. The Business Post, 28th November

Herbert Lane, Dublin 2 Quinn Agnew has launched 20 Herbert Place and 15 Herbert Lane, a Georgian refurbishment opportunity and mews in Dublin 2, for sale by private treaty seeking offers in excess of €1.35m. No. 20 Herbert Place is located on the west side of Herbert Place between Baggot Street Bridge and Mount Street Crescent overlooking the Grand Canal. No. 15 Herbert Lane is located to the rear of 20 Herbert Place which is accessed via Mount Street Crescent. No. 20 Herbert Place comprises a large, four-storey over basement Georgian building which will facilitate a bright office or home subject to planning permission. It has an overall floor area of 2,578 sq. ft. and requires refurbishment internally. No. 15 Herbert Lane comprises a two-storey mid-terraced mews in good condition and benefiting from two open-plan offices, kitchen and bathroom. It extends to 547 sq. ft. The mews is currently occupied by Fifty-Fifty Post on a term of ten years from May 2015 producing €15k per annum expiring in May 2025. The tenant has signed a Deed of Renunciation relinquishing renewal rights and is not affected by the sale. Externally, there is a railed garden to the front as well as a large garden between the main building and the mews. The property offers excellent potential for either residential or commercial use. The Business Post, 28th November


Usher’s Quay, Dublin 8 A hotel site with full planning permission to develop a 100-bedroom hotel has come to the market seeking €7m. The Usher’s Quay hotel site in Dublin 8 will extend to c. 43,550 sq. ft., with restaurant and bar facilities of c. 1,614 sq. ft. Warren Private and Greenleaf is reported to have acquired the Usher’s Quay site for €3.3m in 2019. The price paid represented a premium of 16.67% on the property’s €2.75m guide price. Despite the impact of the pandemic, the market for new hotels remains strong with c. 24 hotels, comprising 4,500 rooms, expected to be delivered in Dublin by the end of 2023. The Irish Times, 24th November

Smithfield, Dublin 7 A proposed hotel development at the Cobblestone pub in Dublin has been refused planning permission by Dublin City Council. Marron Estates Ltd had applied to the Council for planning permission for a nine-storey hotel at 77-80 King Street North in Smithfield. The proposal included the demolition of 78 and 79, and the retention and alteration of 77 and 80. Under the proposed plans, the pub would have been retained, however concerns were expressed over the scale of the development and the removal of an area beside the traditional Irish music pub. Over 700 observations were received by the Council’s planning department which ruled that the “development would be overbearing and significantly out of scale and character with the prevailing architectural context and would represent substantial over-development of this highly sensitive site”. In October, more than 400 people protested in the city centre over the proposed development while an online petition, Save the Cobblestone, has more than 34,000 signatures. Marron Estates Ltd has four weeks to appeal the planning decision. The Business Post, 29th November



South Docks, Cork The only hospital dedicated to rehabilitation outside of Dublin is earmarked for Cork City, as part of a €350m plan to develop the South Docks. The 122,000 sq. ft. 130-bed rehabilitation hospital will provide rehab for patients with stroke and acquired brain injury, as well as general neurological rehabilitation, and will be among the most modern in Europe, according to developers O’Callaghan Properties (OCP). A dedicated outpatient day hospital and restaurant and café services are also part of the plan. OCP is hoping to begin construction work on the hospital in the first quarter of 2023, subject to planning approval. The development is a significant one for the city, which had in the past been earmarked for a southern rehabilitation centre, to offset the pressures on the National Rehabilitation Hospital in Dun Laoghaire, in Dublin. The new hospital will be operated by French care giant the Orpea Group, which entered the Irish market in 2020 and now has c. 2,000 beds in Ireland. The Irish Examiner, 23rd November



Student Accommodation, Cork Planning permission has been granted for a c. €30m+, 243-bed student accommodation complex at Cork city’s Victoria Cross, on a former garage site which has been sold for €4.1m. It features several blocks, including one of ten storeys, facing UCC’s own ongoing Crow’s Nest 255-bed facility. It marks further high-density concentration of purpose-built student apartments and beds just west of the main UCC campus. This latest student accommodation site, at Victoria Cross, is to be delivered by Bellmount Developments’ Séamus and Pádraig Kelleher. The Kelleher brothers also have an adjacent site on the other side of Orchard Road on Victoria Cross Road with planning in place for a 137-bed development, in three blocks of up to five storeys tall. Combined, they now have scope to add 380 student beds to the immediate area. More recent large-scale player arrivals (excluding UCC itself) include the likes of Uninest with three sites (Brewery Quarter/Lee Point, Melbourn Point by the MTU, and the completed Amnis House on Western Road) as well as Round Hill Capital and NBK Capital Funds. The Irish Examiner, 24th November



Appian Way, Dublin 6 Dublin City Council has refused developer Johnny Ronan planning permission for a 10-storey-over-basement, 44-unit scheme of build-to-rent apartments on Appian Way in Dublin 4. The council said the scheme’s excessive height, scale and density on a small, visually prominent site would constitute overdevelopment. It found the plan for the site at the junction of Leeson Street Upper and Appian Way would have an unreasonably overbearing, visually dominant effect on adjoining sites. The authority also concluded that the proposed scheme, “with its unjustifiable height and density, fails to integrate or be compatible with the streetscape along both Appian Way and Leeson Street Upper”. The Irish Times, 24th November

Athy, Co Kildare A residential development site in Athy, Co Kildare with potential for 133 dwellings has been brought to the market by joint agents Lavelle Commercial Property and Corr Property Consultants guiding €2m. Located at Blackparks, it is within walking distance of the town centre and fronts a planned new distributor road. Extending to 9.4 acres with frontage to Fortbarrington Road, the site is zoned Objective C: “New Residential” which indicates an estimated residential capacity of 133 units for the site, equating to 14 units per acre. The Irish Independent, 25th November

Phoenix Park, Dublin 7 A small apartment block with development potential near the Phoenix Park in Dublin 7 has been earmarked for auction by agent Olivia Needham Property in partnership with IAM Sold Property Auctions with a €1.45m guide price. Known as 6-11 Villa Springs, Nephin Road, the two-storey block B extends to 3,010 sq. ft. and comprises six one-bedroom apartments. It is part of a small development with Block A comprising 1-5 Villa Springs at the entrance to the development not included in the sale. Block B, which is for sale at the rear of the development, is owned by one owner and sits on its own site of c. 0.15 acre. Block B will be sold with the benefit of vacant possession and the market rent for the six apartments is estimated to be €122k per annum giving a return of 8.4% with further uplift possible. Five of the apartments have not been rented over the past two years and therefore market rent can be changed. The sixth apartment is currently rented at €20.4k per annum. A €7.3k annual management fee applies for the entire block. The Irish Independent, 25th November

Residential Property Prices, Ireland Residential property prices in central Dublin will soar by a quarter to a median €476k by 2028, a comprehensive analysis of the housing market for Dublin City Council has found. The housing need and demand assessment (HNDA) by KPMG’s research consultancy said the average price of a home will increase from €437,868 to €575,251 between 2021 and 2028. KPMG said that the median home price would rise from €378,403 to €476,760 in the same period. It also showed that 75% of the homes in central Dublin will be priced above €367,252 in 2028, compared to €291,487 in 2021. In addition to a sharp rise in home prices, the HNDA has also forecast the median weekly rent in the council’s locality will surge from €411 a week to €603 a week by 2028, which will mean the median rental unit will cost c. €2,412 a month. Recent data released by the Department of Housing suggests there has been an increased rate of homebuilding following new state initiatives and forecasts that 27,000 homes could be completed next year. The government’s Housing for All plan has aimed to boost housing delivery up to an average of 33,000 homes a year between now and 2030. Despite the positive trends in the housing market, the KPMG analysis has forecast a rise in home prices of 4.27% in 2021. Its report said there will be continued inflation up to 2030, by which time it will have eased to 2%. The Business Post, 28th November

Build-To-Rent Scheme, Dublin Developers would be blocked from building new apartment complexes solely made up of rental units under new rules being drafted by Dublin City Council. Last week, the local authority entered the second stage of drafting its new development plan for the 2022-2028 period. The new version includes specific policies aimed at preventing over-concentration of build-to-rent accommodation in pockets of the city and increasing for-purchase homes. The measures, if adopted, would require developers to demonstrate that there is not an over-concentration of rental accommodation in an area when applying for planning permission. Large-scale apartment developments of more than 100 homes would also need to include a minimum of 40% of build-to-sell apartments. Furthermore, the council would like to “discourage” rental accommodation schemes of fewer than 100 units because it has found smaller build-to-rent schemes cannot provide “meaningful” communal facilities and services. The draft added that any rental accommodation should be concentrated in “prime inner city areas and also in areas of high intensity employment use such as within 500m walking distance of a high employment area”. A high employment area is classified as a zone with 203 employees per acre and within 500m of major public transport interchanges, such as Connolly Station, Tara Street Station and Heuston Station. The public and interest groups now have a final three-month window to request amendments to the development plan. The Business Post, 28th November

Clonskeagh, South Dublin US-owned Bain Capital is understood to have secured c. €40m from the sale of 72 high-end homes in the south Dublin suburb of Clonskeagh to a fund controlled by German investor Real IS. The deal, which was completed in recent days, sees the fund secure ownership of 63 two to four-bedroom apartments and nine penthouses developed by Bain and its partners Regency Homes at the exclusive Knockrabo scheme on Mount Anville Road. Completed in September 2020, the portfolio is distributed across four apartment blocks ranging in height from four to five storeys. The scheme, which is almost fully let has 93 parking spaces. The €40m price paid by Real IS represents an average of €555,555 per unit. The Irish Times, 29th November



Irish Commercial Property Outlook Improved outlooks across all sectors of the Irish commercial property market are expected by the Society of Chartered Surveyors Ireland (SCSI) according to the third quarter Ireland Commercial Property Monitor. The key factor driving the improvement was an acceleration in tenant demand for industrial space, rents for prime industrials are expected to rise by 6% in the year to come while secondary industrial rents could increase by c. 3.5%. Office demand appears to have stabilised. In the retail market, occupier demand continues to fall but its pace of decline has eased significantly compared with earlier in the year, according to the survey which is part of a global monitor conducted by the Royal Institute of Chartered Surveyors (RICS). Respondents foresee industrials strengthening from a 5% growth prediction in Q2 to 6% growth over the next 12 months. Prime office values are expected to rise by 1% in contrast to falls predicted in the previous quarter. However, secondary office values remain under a bit of pressure with expectations of a fall of c. 50bps. Nevertheless, this is still an improvement on Q2 expectations for a 400bps fall. The Irish Independent, 25th November

Property Funds, Ireland The Central Bank of Ireland has outlined proposals for the introduction of leverage limits for property funds and new guidance to prevent liquidity mismatch. The central bank is consulting on a 50% limit to prevent a build-up of excessive levels of debt in Ireland’s commercial property market. This would not be a fixed limit. The bank noted that in the event of adverse market shocks, it may temporarily remove the limit. Equally, it may be tightened if there is evidence of “growing exuberance”. A three-year transition period is proposed to give funds time to adjust. The plans have been drawn up amid concerns that some funds are carrying too much debt. Irish property funds currently have an average LTV of 46%, which is almost double the EU average of 25%, it added. In addition to limits on leverage, the CBI is also proposing new guidance for property funds on redemption terms to prevent liquidity mismatch. It will advocate a longer timeframe from the point when a redemption request is submitted and when funds would need to pay investors. The consultation will run until 18th February. React News, 25th November

Banking and Payments Federation Ireland Report Mortgage approvals fell in number and value in October but remained higher than pre-pandemic levels. Figures from the Banking and Payments Federation Ireland (BPFI) show a total of 4,568 mortgages were approved last month, down 4% on the previous month and 12% on the same month last year. 55% (c. 2,533) were for first-time buyers while mover purchasers accounted for 23.6% (c. 1,076). The value of mortgage approvals in October was just under €1.2bn, down 5% on last year. The Irish Times, 30th November

Rent Control Legislation, Ireland Landlords will be able to hike rents by multiples of new rent control caps if they have not increased rents in several years. New rent control legislation will allow landlords of homes in rent pressure zones (RPZs) to compound the cap from previous years. Housing Minister Darragh O’Brien will pass legislation through the Oireachtas in the coming weeks which will link annual rent increases in RPZs to 2% or to the Harmonised Indices of Consumer Prices (HICP), whichever is lower. However, landlords who have not upped the rent in previous years will be able to combine the rent increase cap, as it will be legislated for on a per annum basis. The legislation last week passed its Seanad stage and will soon be considered by the Dáil. It is part of two pieces of legislation brought by the Housing Minister to Government in recent months, with Mr. O’Brien also seeking to put in place tenancies of indefinite duration. According to the latest Daft.ie rent report, rents are now rising at an annual rate of 6.8%. The rent increases faced by tenants are linked to an “unprecedented” shortage of rental property in the Irish market. As of the beginning of the month, the report said that there were just 1,460 homes to rent on its property website, the lowest number since its quarterly series began in 2006. The Irish Independent, 30th November


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