31st May (Issue 48)
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.
LOAN / PORTFOLIO SALES
Project Oyster: Ulster Bank has hired PwC to oversee the sale of the Project Oyster loan portfolio. Project Oyster is a portfolio of distressed loans with a par value of €2.5bn. Approximately two-thirds of the loan portfolio is secured against business loans, for which the majority of debtors are SMEs. The portfolio also includes c. €875m of residential mortgages, with 33% of the mortgages secured by 900 family homes. Roughly 95% of the family home mortgages have been in arrears for at least two years and all of the family home mortgages have been the subject of legal action. The Irish Times, 25th May
RETAIL
McDonald’s Temple Bar: Savills is inviting offers of €6.25m for a property on Temple Bar Square in Dublin 2. The property is let to the fast-food chain McDonald’s under a long term lease. The 8,500 sq. ft. property has three storeys and dates back to the 1880s. McDonald’s occupy the property under a 20-year lease from April 2013, with the annual rent set at €350k. While there is a break option on the lease, this is not until April 2023, offering investors certainty of income in the short to medium term. The Irish Times, 25th May
Arena Centre: After announcing their intention to sell six investment properties in February 2016, Green REIT has advised that five properties have either been sold or else a sale has been agreed. The one property for which a sale is yet to be agreed is the Arena Centre in Tallaght, Co. Dublin, which has a guide price of €65m and an annual rent roll of c. €4.6m. The properties which have either been sold or sale agreed are the Ormond building in Dublin (c. €17m sale / c. €1.2m rent p.a.), Classon House in Dundrum Business Park, Dublin (c. €20m sale / c. €1.26m rent p.a.), Parnell Car Park in Dublin city centre (c. €12m sale / c. €700k rent p.a.), the Globe Retail Park in Kildare (c. €25m sale / c. €1.7m rent p.a.) and the Parkway Retail Park in Limerick (c. €25m sale / c. €2.02m rent p.a.). The Irish Times, 25th May
OFFICE
La Touche House: In a sign of the recovery in the property market in recent years, an office block purchased in 2013 by a Luxembourg company backed by a Credit Suisse fund has now doubled in value. In April 2013, the company acquired La Touche House in Dublin’s IFSC for €35m. The December 2015 accounts for the company now place the value of the property at €70m. The current rental income of the six-storey property is c. €4m p.a. and tenants include Zurich Bank and Dexia Credit. The property was developed in 1993 and was initially purchased by Bank of Ireland for €38m. The Irish Independent, 26th May
Tetrarch Portfolio: Tetrarch Capital is seeking to raise €100m for a new equity fund which will be used to acquire twelve office properties already controlled by the group, while also providing a liquidity event for Pimco, one of Tetrarch’s main backers. The fund will acquire six office properties in Dublin 1 (347,000 sq. ft.) and six office properties in Millennium Business Park in Naas, Co. Kildare (142,000 sq. ft.). Tetrarch has asked Merrion Capital and Leon Partners to identify potential equity investors, and these firms will reportedly target high net worth individuals, pension funds, institutional funds and international investors. Pimco has also provided Tetrarch with funding for the Citywest Hotel, Jacob’s Hostel and other Millennium Park offices. Pimco’s investment in these assets will be unaffected by the liquidity event. The Irish Times, 27th May
One Spencer Dock: The Irish Independent reports that a sale has been agreed for One Spencer Dock in Dublin’s IFSC for c. €240m. This would mark the second occasion where a sale has been agreed, after Hines had previously agreed to acquire the block for c. €240m earlier this year. However this deal failed to materialise and a buyer was sought a second time for PwC’s HQ. The proposed acquirer of One Spencer Dock is unclear, however it is reported that it is not Alan McIntosh or IPUT, who were previously interested in acquiring the property. The property is being sold by NAMA, with EY acting as receivers. Savills and CBRE are the joint selling agents. The Irish Independent, 26th May
Telephone House: An unnamed investor has paid c. €17m (c. €5.5m over the €11.5m guide) for Telephone House on Marlborough Street in Dublin 1. The inflated sales price was driven by intense bidding amongst a number of investors who were all seeking to convert the 1970s office block into a hotel. Telephone House has a floor area of 80,773 sq. ft. and is spread over nine storeys. HCL occupy the property under a 10-year lease (break in year five) signed in 2015, with the annual rent set at €968k. HCL is also paying €2k p.a. for each of the 61 car spaces on site. The Irish Times, 25th May
Bracken Court: The developer McGarrell Reilly Group has paid c. €3.3m (c. €550k over guide) for Bracken Court in Sandyford, south Dublin. The four-storey office block has a floor area of 26,270 sq. ft. and there are 59 car spaces at surface level. The property is currently 50% let to Prima Management, Infinite Technology and Irish Welcome Tours. The current annual rental income is c. €102k. The sales price equates to a capital value of c. €125 psf. McGarrell Reilly has already sought planning permission to upgrade the property. The Irish Times, 25th May
26 Fitzwilliam Square: Colliers has set a guide price of €2.35m for 26 Fitzwilliam Square in Dublin 2. The Georgian property has a floor area of 4,500 sq. ft. and there are six car spaces available to the rear. The property is currently being used for office space and the current annual rental income is €92k. While the existing tenants include Grafton Recruitment and Adare Cosmetics, Grafton are due to vacate in September, which would free up 2,820 sq. ft. of space. Colliers estimate that this potentially vacant space would command an annual rent of c. €110k. The Irish Times, 25th May
HOTEL
Dalata Kevin Street: Dalata look set to expand their hotel portfolio in Dublin following the announcement that they have purchased a ready-to-go 0.36-acre hotel site on Kevin Street for €8.1m (€22.5m per acre). In November 2015 An Bord Pleanála granted planning permission for the development of a new 137-bed hotel over five floors on the site. Dalata hope to commence construction on the site in Q4 2016 with a target completion date of mid-2018. The total anticipated cost of the hotel is €26m and Dalata intend on trading the new hotel under the Maldron franchise. The Irish Independent, 27th May
Tulfarris Hotel: The Prem Group has completed the purchase of Tulfarris Hotel & Golf Resort in Co. Wicklow for over €8m. The group is already very familiar with the hotel, having managed it for the past seven years. The group now own, lease or manage 43 properties throughout Ireland, the UK and Europe, and have set themselves a target of owning 50 properties by 2017. The Irish Times, 30th May
North Wall Hotel: Chirita Ltd has sought planning permission from Dublin City Council to convert a warehouse in Dublin’s North Wall Quay into a 93-bed hotel. The directors of Chirita are Paddy McKillen and Matthew Ryan. The application proposes that the shell of the warehouse is kept and a further five storeys are added, so that the new hotel will have a floor area of c. 50,000 sq. ft. and will stand at eight storeys tall. NAMA Wine Lake, 29th May
Radisson Extension: Padraig Rhatigan’s Luxor Investments Ltd has sought planning permission for a 103-bed extension to the Radisson Blu Hotel on Golden Lane in Dublin 8. The application seeks approval to demolish two warehouses which lie next to the four star, 150-bed hotel and replace them with the 103-bed extension. The extension would have a total floor area of c. 65,000 sq. ft. spread over eight stories. NAMA Wine Lake, 29th May
RESIDENTIAL / LAND
House Prices: The latest figures from the CSO on the Irish property market show that for the twelve months ending April 2016, property prices increased by an average of 7.1%. While the overall increase was 7.1%, there was a large disparity between Dublin and the rest of the country, with prices outside of Dublin rising at a much faster rate during the period. Property prices outside of Dublin rose by 9.5% during the period while Dublin prices only rose by 4.6%. On a national level, property prices rose by 0.3% in April 2016, following a month of zero growth in March. Based on the national index, property prices are now 33.3% lower than their 2007 peak. The Irish Examiner, 26th May
St Augustine Street: An unnamed European investor has paid €25m (c. €3m over guide) for a block of 110 apartments in Dublin 8. The apartments are located at 42 – 76 St Augustine Street and the sales price reflects an average value of over €227k for each unit. The block has been fully leased to the rental company Staycity, who pay an annual rent of €1.3m. There is c. 8 years remaining on Staycity’s lease, with no rent reviews contracted. The Irish Times, 25th April
INDUSTRIAL
Parkmore Business Park West: Savills has set a guide price of €3.75m for Building 5 in Parkmore Business Park West which is located to the east of Galway City. The entire property is let to the medical technology firm Medtronic who is paying an annual rent c. €414k. The weighted average unexpired lease term of Medtronic’s leases is c. 2.3 years. The 53,884 sq. ft. property consists of a mix of warehouse and office space and sits on 2.6-acre site. The €3.75m guide price reflects a net initial yield of c. 10.6% and a capital value of c. €70 psf. The Irish Times, 25th May
OTHER
Primary Care Centres: A €70m loan from the European Fund for Strategic Investments (EFSI) will part fund the development of 14 new Primary Care Centres (PCCs) in Ireland. The Prime Balfour Beatty consortium has been awarded the contract to build the PCCs and construction is expected to commence shortly. The EFSI loan is for a 25 year term and represents 49.5% of the total funding required. The project will be co-funded by Talanx Asset Management and Bank of Tokyo-Mitsubishi. The PCC’s will spread throughout Ireland and the locations include Mayo, Tipperary and Waterford. The first PCCs are expected to open in mid-2017. The Sunday Business Post, 25th May
Allsops Auction: An online Allsops Auction on Wednesday May 25th saw c. €11m of property sold. A total of 70 commercial and residential properties went under the hammer, with buyers found for all but 13 of the lots. One of the most noteworthy sales was an office / residential property in Navan town centre. After having a reserve of €400k – €450k, the property eventually sold for €860k. A period house on Northumberland Road was amongst those which failed to sell. The property consisted of three one-bed apartments and had a reserve of €560k – €590k. The Irish Times, 26th May
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