31st August (Issue 312)
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
Revenue Commissioners Office, Dublin 2 A combination of secure rental income and long-term redevelopment potential is expected to see significant interest in the sale of the offices at 84-93 Lower Mount Street. The building is being offered to the market on behalf of UK property company Henderson Park Capital at a guide price of €36 million and comprises 4,605sq m (49,569 sq ft) of office accommodation over lower ground, ground and three upper floors and has been let in its entirety to the Office of Public Works (OPW) on behalf of the Revenue Commissioners since February 1981. While the OPW’s original agreement had been due to expire, it was extended recently for a further 10-year period to June 2031, with a tenant break option in June 2028. The passing rent equates to a relatively modest level of €34.95 per sq ft offering the buyer a net initial yield of 4.60 per cent after standard purchaser’s costs, excluding car parking. A feasibility study prepared for the sale by architects Henry J Lyons suggests the existing building could be demolished and replaced by a part five, part six and part seven-storey development extending to a gross floor area of 9,931sq m (106,896 sq ft). The Irish Times, 25th August
RETAIL
Manor West Shopping Park, Tralee US investor Marathon Asset Management has instructed agent Cushman & Wakefield to bring another of Ireland’s foremost regional retail assets to the market. Located in Tralee, Co Kerry, the scheme comes for sale fully occupied by a strong selection of international and Irish retailers at a guide price of €55,175,000. The sale of the property at that level offers the new owner the opportunity to secure a net initial yield of 8.81 per cent based upon the current rent roll. The amount being guided also represents a 6 per cent discount on the €59 million the current owners paid to secure the scheme in 2015. Manor West Shopping Park is anchored by Harvey Norman and Woodies DIY. Other notable tenants include Tesco, TK Maxx, Next, Homestore & More, Smyths, Currys PC World, Petmania and Halfords. The park is 100 per cent occupied, with Danish home group JYSK and pet shop Maxi Zoo two of the more recent tenants. The total current rent receivable is €5,342,460 per annum and the weighted average unexpired lease term (Wault) is 6.3 years to break options and 7.2 years to expiry. At 32,549sq m (349,403sq ft), the park sits on a site area of about 11.74 hectares (29 acres), with in excess of 1,000 surface car parking spaces. The Irish Times, 25th August
Eyre Square Shopping Centre, Galway Developed originally by the McInerneys in 1991, the landmark retail scheme is being offered to the market by agent Colliers on behalf of US investment giant Marathon Asset Management at a guide price of €12.75 million. The sale itself comprises eight retail units and control of the centre together with the freehold common area units. The eight retail units boast a strong tenant lineup, including JD Sports, Great Outdoors, Specsavers, Diesel, Starbucks and Vero Moda. The units are currently producing rental income of €869,200 per annum with a weighted average unexpired lease term of 6.24 years to break. The incoming investor will have an opportunity to immediately increase the rent roll on letting the two vacant units. The guide price of €12.75 million equates to a net initial yield of 7.34 per cent and a reversionary yield of 8.64 per cent, after allowing for standard purchaser’s costs. The building forms part of a combined shopping centre with both Corbett Court and Edward Square Shopping Centre, with access provided directly from Eyre Square, Williamsgate Street and Castle Street. Anchored by Dunnes Stores and Penneys, the centre enjoys a strong mix of local, national and international retailers and ordinarily has a footfall of some 270,000 visitors a week. The Irish Times, 25th August
Tallaght, Dublin US private equity giant Oaktree has successfully secured an extension to the maturity date of €186m of debt advanced by AIB to help fund the 2018 acquisition by the company of The Square shopping centre in Tallaght from Nama. It comes as the shopping centre – as with other retail venues – saw footfalls shrink during 2020 as Covid lockdowns were introduced. Newly-filed accounts for the Luxembourg company used by Oaktree to acquire the shopping centre from Nama – OCM Luxembourg Square Retail – confirm that on June 25 this year, the maturity date of the senior and mezzanine facilities granted by AIB were extended to June 2023. The accounts for OCM show that in 2020 it has a senior facility agreement with AIB totalling just under €160 million. There was an additional €28.3m mezzanine facility with AIB, which carried an interest rate of 8pc, plus the three-month Euribor rate. The Independent, 26th August
Dealz, Ireland Dealz, the discount retailer, said it plans to open several new stores across Ireland with a particular focus on regional areas. These include Galway, Donegal, Mayo, Tipperary, Wicklow, Leitrim, Meath, Kildare, Kerry, Clare, Louth, Sligo, Limerick and Waterford, as well as the suburbs of Dublin. The retail chain said that the investment could lead to the creation of between 500 and 750 new jobs. Dealz said it is working with Cushman & Wakefield and William Fry as it scopes potential sites to expand its portfolio. The retailer said it hired more than 120 staff in Ireland in the past few months. The chain opened a new, 930sq m location in Carrickmines, Co Dublin in April and expanded its location in Cavan due to increased demand, the company said. Dealz is part of Pepco Group, a London-headquartered European retail group which has more than 3,300 stores across the continent. Pepco floated on the Warsaw stock market in May 2021 and is valued in the region of €7 billion, according to the company. The Business Post, 30th August
HOTEL
Central Hotel, Mallow Plans are being drawn up for the redevelopment of the dilapidated former Central Hotel in Mallow, following confirmation that the landmark town centre premises has been purchased by local property developer Pat Shine. A source has said the new owner will be working closely with Cork County Council over the coming months to draw up ambitious plans for the building, with a view to lodging a planning application for a programme of works sometime next year. It is believed provisional plans include re-opening part of the building as a hotel with a roof top terrace restaurant overlooking Mallow Town Park and the incorporation of a mix of ground floor retail units facing onto Davis Street. The Independent, 26th August
Foley Street, Dublin 1 Red Rock Developments has submitted new plans to build an aparthotel on Foley Street in Dublin after its proposed co-living complex on the same site was refused permission. Last year, the development company, applied for permission to develop a 12-storey co-living block on the northside site. The complex would have included 102 bedrooms, a games room, coffee area and a gym. Last February, Dublin City Council welcomed plans for the site to be used for a residential project, but ultimately refused planning permission for the project. In a new submission to the council, planners acting on behalf of Red Rock have now argued for an aparthotel on the site. It added that the aparthotel, which would be located near businesses such as PwC, Facebook and Google, could provide much needed accommodation for those travelling for work to stay in during their time in Dublin. The proposed 11-storey aparthotel would contain 91 rooms and suites. The development would include studios, one-bed suites, two-bedroom suites and three-bedroom suites. The total occupancy would be 262 bedspaces. The new proposed development is one-storey fewer than the failed co-living scheme. Dublin City Council previously said it has “serious reservations” about a 12-storey building on the site because it “would constitute overdevelopment”. The Business Post, 29th August
INDUSTRIAL
Newbridge, Kildare Jordan Auctioneers, Newbridge, together with joint agents Lavelle Commercial Property, Naas, is offering for sale a fully serviced development site of 23.6 acres (9.56 hectares) zoned Objective H – “industrial and warehousing” within the Newbridge Local Area Plan 2013-2021. The guide price is €6 million (approximately €250,000 per acre). Located within Great Connell Business Park, the lands are situated on the north-east side of the Great Connell Road, 1.5km south east of Newbridge town centre. The surrounding area is a mix of industrial, residential and agricultural uses with adjoining occupiers including Pfizer, KDP Ireland (Keurig Dr Pepper), Murphy Ireland, and the recently developed Lidl Distribution Centre is also close by. Lands to the east are reported to have been recently acquired by the IDA. The lands extend to approximately 23.6 acres (9.56 hectares) and provide a serviced industrial zoned land bank in a strategic location ideally suited for future commercial development. The estate road is proposed to form part of the Newbridge South Orbital Relief Road providing easy access to the M7 Motorway at Naas South (Newhall) interchange, the M50, Dublin city centre and other major cities via the motorway network. The Business Post, 29th August
RESIDENTIAL / LAND
Glenveagh, Ireland Glenveagh reported pre-tax profits of €4.3 million for the first six months of 2021, which is a significant improvement on the €27.3 million pre-tax loss for the same period last year when public health restrictions forced the closure of the construction sector for an extended period. Glenveagh posted an operating profit of €21.4 million for the first half of 2021 on the back of healthy profit margins of 16.7 per cent. Overall, the company reported a threefold increase in sales for the first half of the year to €127.5 million. Glenveagh said it paid €52 million in the first half of the year to acquire nine suburban sites for future development, which it estimates will deliver 2,000 housing units in total. Glenveagh said the average selling price of homes across its portfolio stood at €298,000 in the first half of the year, which was down marginally on the same period last year. However, the company said the rate of house price inflation increased to 5 per cent in the first six months of 2021 and warned that this cost inflation would become evident in 2022 as housing projects are completed. The Business Post, 26th August
Blackrock Road, Louth BWH Investments Limited has applied to Louth County Council for 29 residential units at The Loakers, Blackrock Road and Bother Maol. The proposed development is for 2 three-storey blocks of apartments, comprising 9 two-bedroom apartments and 3 three bed apartments in each block (24 apartments in total); 4 semi-detached two storey, three-bedroom dwelling houses and 1 detached two storey, three-bedroom dwelling house. The N52 Inner Relief Road to the site entrance on Bothar Maol will be used for emergency and service vehicle access in the event of flooding on the Blackrock Road preventing access to the site via The Loakers development. The Independent, 25th August
Newtownmountkennedy, Wicklow Rockfield New Homes Springmount Ltd have submitted a planning application with the Planning Section of Wicklow County Council for 57 new residential units. The application consists of plans to construct three-storey detached four-bedroom dwellings, two-storey semi-detached four-bedroom dwellings, two-storey semi-detached three-bedroom dwellings and detached four-bedroom dormer dwellings. Planning permission is also being sought for the provision of an entrance to the development via the previously granted Rockfield, connection to existing services, together with all ancillary site works necessary to complete the development. The Independent, 25th August
Castleforbes Business Park, Dublin Eagle Street Partners, the real estate and asset management firm, announced that it signed a contract to acquire a 4.6-acre property at Castleforbes Business Park in Dublin’s city centre from Glenveagh Properties. The €78.5 million transaction is expected to be completed at the end of this year. The company was founded in December 2020 by Justin Bickle, the former chief executive at Glenveagh, and Shane Scully, who worked as chief development officer at Glenveagh Living. Eagle Street said the Castleforbes site, at Sherriff Street, benefited from full planning permissions and was capable of delivering 702 residential apartments and a 219-bed hotel. Eagle Street estimated that the gross development value of the transaction is in excess of €500 million. The investment company said that when delivered, the residential units would represent one part of Resident Space, Eagle Street’s vertically integrated Irish private rented sector (PRS) platform, which will be launched this year in conjunction with major international real estate investors. Eagle Street said it was aiming for Resident Space to become one of Ireland’s leading PRS players, targeting the delivery of at least 5,000 purpose-built residential units in Dublin over the coming years. The Business Post, 26th August
The Brick Yards, Dublin 1 Having assessed interest among developers and investors earlier this year, agent Savills Ireland has brought a landmark 3.2-hectare (8-acre) site in Dublin’s north docklands to the market at a guide price of €80 million. Located on the East Wall Road, the Brick Yards comes with the potential to accommodate a scheme of 1,051 apartments, according to the feasibility study prepared for the sale by MCA Architects. The proposed development would, subject to planning permission, comprise 458 one-bed units, 489 two-bed units, 104 three-bed units, along with 20,780sq m (223,674sq ft) of commercial space. The site currently comprises several low-rise industrial buildings, which the selling agent says could provide the purchaser with an opportunity to benefit from short-term income while seeking planning permission for a development scheme. Assembled originally by a joint venture involving the Westmeath-based Bennett Group, the “Merchants Gate” site, as it was known previously, was last offered to the market in 2006 at the much-higher guide price of €150 million. The Irish Times, 25th August
OTHER
Mortgage Approval, Ireland There has been another surge in the numbers approved for a mortgage as potential buyers scramble for a limited supply of homes. More than 5,000 mortgage applications were given the green light last month, with most of them for first-time buyers, according to new figures from the Banking and Payments Federation (BPFI). This is 1,600 more mortgages than were approved in the same month last year. The overall number of mortgages approved fell by 3.3pc last month when compared with June, but was up around 50pc on the same period last year. Mortgages approved in July were valued at €1.283bn, with first-time buyers accounting for 55pc of these and mover purchasers accounting for €382m. In the year to July, 53,511 mortgages were approved, valued at €13.17bn – the highest level since the data series began. Average amounts approved for home loans have also risen in the last year, the banking body said. The average approval amount last month was €255,000, up €16,000 from July 2020. The Independent, 27th August
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