31st October (Issue 421)
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
Merrion Road, Dublin 4 Having paid €190m in 2016 to acquire Elmpark Green, US property giant Starwood has engaged CBRE to find a buyer for its remaining interests at the Dublin 4 campus. The portfolio comprises eight commercial assets, including the Seamark and Vista buildings and is guiding at a price of €55m. While Starwood’s February 2016 purchase of the Elm Park scheme from Nama-appointed receivers Duff & Phelps gave it ownership of 10 buildings extending to approx. 750,000 sq. ft of commercial and residential space in total on a 17.3-acre site, it moved within months to dispose of two of the portfolio’s assets. In the first instance, the US-headquartered investor turned a profit of approx. €7.1m from the sale for €59m of 201 apartments at the scheme to Ires Reit. The second deal saw it secure an estimated €5m profit from the sale for €58m of the Irish headquarters of global financial services provider Allianz to Standard Life. The price paid for Allianz House reflected a capital value of just over €672 per sq. ft based on the eight-storey over-basement office building’s 86,272 sq. ft footprint. With approx. 319,000 sq. ft of space distributed across the portfolio now for sale, the capital value on this occasion is just €170 per sq. ft, which is considerably below replacement cost. The most significant of the assets being offered for sale at Elmpark Green is the Seamark building, extending to 184,000 sq. ft. The remaining assets include the 91,000 sq. ft Vista Building, which is leased to global healthcare company Novartis, producing an annual income of €1.8m, and six ancillary commercial units extending to a combined 44,000 sq. ft, which comprise a leisure centre, two coffee shops, a creche, a management suite and a conference centre. The Irish Times, 25th October
Cushman & Wakefield Quarterly Report Galway’s office market sector performance is more positive than that of Dublin and rents have been rising in Galway’s office market according to the latest quarterly report from Cushman & Wakefield. By relative standards Galway’s office market performed strongly in the first nine months of 2023 with more than 197,000 sq. ft of space taken-up in 17 deals. The report shows that Galway office availability has remained close to 247,570 sq. ft over the last number of quarters as its vacancy rate reduced from 10.2% in September last year to stand at 6.9%. That’s about half the vacancy rate in Dublin. Meanwhile, Galway office rents increased to €27.96 per sq. ft in Q3, up from €26.94 for prime existing stock since the first quarter of 2022 and are now up from €34.84 per sq. ft to €40.04 per sq. ft for new build. The Business Post, 28th October
HOSPITALITY
The Dean Hotel Group, the owner of a prime collection of hotels in Ireland, has agreed to sell a majority stake in its business to an investment vehicle led by former directors of Ennismore and backed by US investor Elliott. A dedicated investment vehicle fronted by Lifestyle Hospitality Capital (LHC) Group and supported by funds advised by Elliott Investment Management is buying a majority position in the lifestyle hotel platform built up by Paddy McKillen Jnr. Financial details have not been disclosed. However, market sources said the enterprise value of the deal is believed to be approx. €400m and it contains a significant capital expenditure component to aid with future expansion plans. Dean Hotel Group founder Paddy McKillen Jnr and the McKillen Company will retain a minority stake and remain involved in the business, with the deal expected to close in the final quarter. The hotels portfolio – which will continue to be managed and operated by The Dean Hotel Group under its own brands – includes three of the fashionable Dean branded hotels, the Clarence, the Mayson, the Devlin, the Leinster and Glasson Lakehouse. React News, 31st October
Bolton Street, Dublin 1 Cork-based property investor and developer Clopen Capital has secured planning permission from Dublin City Council for a new 90-bedroom hotel in Dublin City Centre. Located on the site of a former garage at no. 21-24 Bolton Street, the new hotel will range in height from four to seven storeys over basement level and extend across a total area of 30,623 sq. ft. The hotel’s guest accommodation will be located from ground- to sixth-floor level. The Irish Times, 25th October
Milltown, Co Kildare Agent Coonan Property is inviting best bids by November 30th for The Hanged Man’s pub and restaurant in Milltown, Co Kildare which is guiding at a price of €1.1m. Positioned on a high-profile roadside site of 2.5 acres on the banks of the Grand Canal, the subject property briefly comprises a fully licensed bar and restaurant with capacity for 100 customers along with a fully fitted kitchen, a function room and a two-bedroom apartment at first-floor level. An additional two-bedroom, two-bathroom cut-stone apartment adjoins the main building. The existing property comes for sale with the benefit of full planning permission for a 20-bedroom boutique hotel and all associated works. The Irish Times, 25th October
MIXED-USE
Dame Street, Dublin 2 Cheyne has provided €80m of debt for a Dublin office which is home to WeWork, as the flex giant fights to solve its precarious financial position. WeWork, which occupies the majority of the asset’s floorspace, announced that it would be completing its fit-out of the asset in the first half of 2024. Located in the centre of Dublin, Central Plaza offers 100,000 sq. ft of floorspace, of which 73,000 sq. ft is leased to WeWork. JLL had been mandated to replace an existing construction facility with a longer-term loan of €90m-€100m. The site was initially purchased for approx. €70m and Hines is understood to have invested more than €100m in renovating the asset. Formerly home to Central Bank of Ireland, the asset also has 65,000 sq. ft of food & beverage and retail space. Spread across five buildings, it is currently let to 13 tenants. React News, 31st October
Duke Street, Dublin 2 17 Duke Street has come up for sale at a guide price of €2m with Finnegan Menton. The four-storey-over-basement period building is located just off Grafton Street, across the street from Marks and Spencer and the Duke Public House. The building extends to a net internal area of 2,673 sq. ft and a gross internal area of 3,550 sq. ft. No. 17 is in commercial use as an art gallery on the hall and first floors, with ancillary storage on the second floor, a partially refurbished but currently unused third floor and a former wine bar at basement level, which has separate street access and a small rear yard. The title is freehold and it is being offered with vacant possession of the entire. The Business Post, 29th October
RETAIL
Grafton Street, Dublin 2 Private investors looking to gain a foothold on Dublin city centre’s most sought-after shopping street along with a secure return on their investment will be interested in the sale of no. 55 Grafton Street. The subject property’s ground floor and basement level extend across a total area of 685 sq. ft and are being offered to the market by agent Colliers at a guide price of €2.5m (NIY 5.46%). The investment comes for sale following its recent letting to Claddagh Jewellers on a new, 10-year lease from July 2023 and is subject to a reserved rent of €150k pa. The Irish Times, 25th October
INDUSTRIAL / LOGISTICS
North City Business Park, North Dublin Industrial and logistics specialist Rohan Holdings has commenced construction of a new facility for Dublin Fire Brigade at its North City Business Park development. Upon completion in autumn 2024, the 50,000 sq. ft high-bay warehouse and office building will provide Dublin Fire Brigade with accommodation for the management and maintenance of its vehicle fleet. The main contractor, Costello Construction, began work on site earlier this month. Dublin Fire Brigade will join a number of recent arrivals at North City Business Park. These include Ammega Group, which is currently fitting out its new facility; Control Equipment Ltd; Creative Technology; Bio-Techne Inc; Harvey Norman; and the Office of Public Works (OPW). The Irish Times, 25th October
Parkway Business Centre, Dublin 24 Parnells is aiming for further growth across Europe and Scandinavia following its acquisition of a new and larger headquarter premises at Parkway Business Centre on Ballymount Road in Dublin 24. HWBC handled the €3.25m purchase of Unit 6A, a 23,000 sq. ft facility from the receiver, PwC. With Parnells planning to move to their new premises in early 2024, their existing premises at units 1 to 4 South City Business Park in Tallaght will be coming to the market with the benefit of vacant possession through HWBC at a guide price of €1.95m. The units extend to a gross external area of 11,300 sq. ft with 24 car spaces and are capable of being divided if required. The Irish Times, 25th October
Cushman & Wakefield Quarterly Report Galway’s industrial property has had a quiet year to date with no deals to take up space because of a shortage of supply although over 19,375 sq. ft of additional supply became available in two properties at Briarhill Business Park recently. Industrial vacancy at the end of Q3 2023 stood at 3.1% which was slightly higher compared to the 2.9% a year earlier. This equates to 163,073 sq. ft available but looking at the breakdown of available space, only one unit of more than 54,000 sq. ft was available at the end of Q3. Industrial rents have also risen. They now range between €9.5 per sq. ft for logistics and €10 per sq. ft for advanced manufacturing – an increase from €7.90 to €9.30 per sq. ft in Q1 2022. They also compare with prime Dublin logistics rents of approx. €12.54 per sq. ft. The Business Post, 28th October
RESIDENTIAL / DEVELOPMENT
Cherrywood, South Dublin Hines is seeking a total of €5m for two development sites at Cherrywood in South Dublin. Located in close proximity to the recently approved town centre element of the wider Cherrywood scheme, the subject holdings – sites M3A and M5 – extend to a total area of 3.09 acres and are zoned for a variety of uses including residential. While neither site has planning permission in place at present, both are situated within the Cherrywood SDZ (Strategic Development Zone), and as such will benefit from a fast-track planning process. Sites M3A and M5 are being offered for sale by Savills at guide prices of €2.25m and €2.75m respectively. The Irish Times, 25th October
Schoolhouse Lane, Dublin 2 CBRE is guiding a price of €4.5m for Molesworth Court Suites, a bespoke scheme of 12 self-catering apartments and penthouses on Schoolhouse Lane in Dublin 2. Purpose built as extended-stay accommodation for business and other longer-term visitors to the capital, the development comprises a stand-alone building consisting of four floors over a reception hall along with dedicated and secure car parking. The Irish Times, 25th October
Stradbrook Road, South Dublin Tetrarch Residential, a development company run by the owners of the Citywest and Mount Juliet hotels, has applied to bring judicial review proceedings against An Bord Pleanála over its refusal of a €50m apartment development in South County Dublin. In August, the planning board refused permission for the 108 build-to-rent apartment scheme on a 1.1-acre site beside Blackrock College rugby club on Stradbrook Road. The development would involve the demolition of an office building and the apartment blocks would range in height from three to seven storeys. The board received 80 observations in relation to the planning application. Tetrarch had intended to build the scheme for senior living use, aimed at people over the age of 65. The Sunday Times, 29th October
Ires Reit Margaret Sweeney, the chief executive of Ires Reit, will step down from her role next year after six years at the helm of the biggest private landlord in the state. In a trading update, the firm said that Sweeney, who also serves as an executive director, will retire from her position in April 2024, but has agreed to continue with the business beyond her six months’ notice period if necessary, to ensure an “orderly transition” in leadership. The search for her successor will commence immediately and will be lead by the nomination committee, the firm said. It comes following a turbulent few months at Ires Reit, with shareholders making a move against management, citing frustration over its direction. The announcement comes as Ires reported 99.6% occupancy rates across its portfolio as of the end of September, with the company on track to deliver a “broadly stable” net revenue interest margin for 2023, “reflecting ongoing initiatives to mitigate cost inflation and leverage the company’s market-leading operating platform”, Ires said. The Business Post, 31st October
Property Prices The price of homes in areas outside Dublin increased by 3.1% in the 12 months to August, according to figures published by the CSO. The Residential Property Price Index (RPPI) also shows prices in Dublin decreased by 1.9% over the same period. It means there was a national increase in the RPPI by 0.9% in the year to August – the lowest increase since December 2020. In August 2023, 4,640 homes were purchased – an 8% increase compared to the same month of 2022. The median price of a home purchased in the year to August 2023 was €320k. The Business Post, 24th October
Housing Policy The government has scrapped plans to strip developers of planning permission to build homes on land that they’ve failed to develop, in a significant reversal of national housing policy. Darragh O’Brien, the housing minister, has frequently touted the landmark ‘use it or lose it’ measure as an integral part of the government’s plans to overhaul the planning system and spur the construction of thousands of new homes in a bid to tackle the country’s chronic housing crisis. The construction industry, however, has mounted staunch opposition to the measure since it was first raised in 2019 with lobbyists for the sector saying it was “questionable” whether it would have any benefit. According to market sources, the Department of Housing has no active plans to introduce a use it or lose it clause in the new Planning and Development Bill, which government expect to be enacted before the end of the year. The Business Post, 29th October
Sandyford, Dublin 18 The Comer Group has appealed a mandate by Dún Laoghaire-Rathdown County Council to include more three-bed apartments in the redevlopment of the landmark Sentinel building in Sandyford. Last month, a company owned by billionaire Galway brothers Luke and Brian Comer was granted planning permission to complete the 14-storey south Dublin building as an apartment block. The approval was given to the Comer Group on the condition it would redraw its plan for the long-derelict building in order to double the number of three-bed units that will be in the block. The Comer Group has now appealed the local authority’s decision to An Bord Pleanála and criticised the strict conditions imposed on the development project. The Business Post, 26th October
Housing Completions Approx. 8,500 new homes were completed in the third quarter of this year, according to the CSO. This was an increase of 14.4% on the same period last year. Apartments recorded the biggest increase with 3,373 completed between July-September, 47% more than the same quarter last year. They represented approx. four in every ten new builds. Housing estates accounted for 3,627 new units, an increase of 1.5% on last year. There was a 4.7% decrease in the number of single homes to 1,439. In total, 22,443 homes have been built in Ireland this year according to the CSO’s New Dwelling Completions figures, excluding student accommodation. The statistics show that the greater Dublin area is driving the vast majority of new builds. More than four in ten homes (3,569) were built in the capital, an increase of 36.6% compared to last year. The Business Post, 25th October
Banking & Payments Federation Ireland (BPFI) Report Figures published by the BPFI showed a total of 11,614 new mortgages with a combined value of over €3bn were drawn down in the third quarter of 2023, a decrease of 21.8% in both volume and value compared to the same quarter 2022. While the overall level of new mortgage drawdowns fell in the period compared to a year earlier, demand among first-time buyers remains robust. The BPFI reports that first time buyers are accounting for approx. 80% of mortgages on new homes and 69% of second-hand properties in Q3 2023. Over the course of 12 months, the number of first-time buyers are on a new high with 30,184 mortgages being drawn down between September 2022 and September 2023. For the first time since 2005, the quarterly value of first time buyer drawdowns on second hand properties exceeded €1.3bn. The Business Post, 27th October
Ballincollig, Cork 70 new houses will be built in Ballincollig under a newly launched affordable housing scheme. The development will take place at Heathfield, Carriginarra, and comprise of 54 three-bedroom and 16 two-bedroom semi-detached houses and townhouses. The A2 BER-rated houses, developed by Cork City Council in partnership with Murnane & O’Shea Limited contractors, will be made available for sale approx. 20% below current market prices under Cork City Council’s Local Authority Purchase Scheme. The two-bedroom houses will be made available from €280k and the three-bedroom houses will be made available from €301k. The scheme’s houses will be available to purchase by those who qualify for the Affordable Housing Scheme, generally first-time buyers who do not already own a property, although exceptions will apply for ‘Fresh Start’ applicants. The Irish Independent, 30th October
OTHER
Tramore, Co Waterford Plans to build a major solar farm near the seaside town of Tramore have been lodged with the County Council. Tornado Electrical Ltd lodged plans on October 17th for planning permission to construct a Solar Photovoltaic Array at Pickardstown consisting of 769,619 sq. ft of solar panels exporting a maximum of 10 megawatts to the national grid. The plans involve the construction of single storey control buildings including an ESB substation, client-side substation, communications building, storage building, and four Inverters, ancillary equipment, fencing and an access road extension. The submissions deadline in respect of this application is November 20th, and a case decision is due by December 11th this year. The Irish Independent, 30th October
Leopardstown, Dublin 18 Leopardstown Race Course is too ¬valuable to the bloodstock industry to redevelop for housing and provides a significant economic boost to Dublin and its surrounding area, according to the head of Horse Racing Ireland’s (HRI) racecourses division. A new report by economist Tony Foley of Dublin City University (DCU) and commissioned by HRI puts the economic contribution of the racecourse at over €60m a year. The report, entitled “Economic Impact of Leopardstown Racecourse”, was commissioned earlier this year and calculates the annual economic value generated by the track at approx. €37.9m in direct on- and off-course spending and €26.5m of indirect value. The report suggests that total could increase to €80m to €90m by 2025. The LDA is known to have expressed an interest in at least some of the 220-acre Leopardstown site over the past year. The racecourse is now one of the biggest State-owned green field properties inside the M50 motorway. The Irish Independent, 30th October
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