3rd October (Issue 417)
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
St Stephen’s Green, Dublin 2 Having failed to find a buyer when it was offered for sale for €27m during the Covid-19 pandemic in October 2020, no. 90-91 St Stephen’s Green has returned to the market through CBRE at a new and lower guide price of €18m (NIY 5.56%). The sum being sought on this occasion represents a significant discount of 33.3% and reflects a capital value of €677 per sq. ft. The property, in a prime position overlooking St Stephen’s Green to the front and Iveagh Gardens to the rear, comprises a four-storey over-basement office building extending to 26,590 sq. ft and distributed over-average floor plates of 5,307 sq. ft. The building is fully let to Standard Life on a 10-year FRI lease from September 15th, 2011. The tenant extended their lease to September 2024 and the current passing rent is €1.1m annually (€41 per sq. ft). The Irish Times, 27th September
HOSPITALITY
Cardiff Lane, Dublin 2 Hotel group Dalata’s €22m expansion of its Dublin Docklands location has been greenlit to allow for 117 more bedrooms at its site near Sir John Rogerson’s Quay. Dublin City Council approved plans for a 10-storey extension of the existing Clayton Hotel beside the Ferryman pub on the corner of Cardiff Lane to increase the number of hotel rooms to 421. The development involves the demolition of buildings at 3-5 Cardiff Lane, which are currently occupied by Starbucks and Arena Kitchens. As part of these conditions, Dalata must also pay €425k in development fees for the hotel’s expansion, and an additional €163.5k in supplementary fees as part of a contribution scheme towards the Luas Red Line which operates nearby. The Business Post, 26th September
Aungier Street, Dublin 2 The asking price for The Lucky Duck pub on Aungier St, Dublin 2, which is being sold by Oakmount, has been reduced from the €2.5m quoted 12 months ago to €2m. The pub had been closed for a number of years before being acquired in 2017 primarily as a restoration project with the intention to offer it for sale once the business was established. The Irish Independent, 28th September
Hospitality Sector Demand for hotel accommodation in Dublin is likely to remain robust amid a strong forecast in visitor numbers alongside a simultaneous slide in future hotel room supply. Recent development activity for new hotels in Dublin’s North City Centre has failed to temper the strong demand for hotel rooms. According to CBRE, hotel occupancy levels in Dublin averaged 82.5% in Dublin in the first eight months of the year with the daily rate averaging €180 during the year to the end of August. The latter is a drop on the record-breaking €209 per room per night recorded in the period to mid-May. Meanwhile Tom Barrett of Savills welcomes how latest August occupancy levels reveal a bounce back to normal from the 54% seen in 2021 and 29% in 2020. While he acknowledged that STR (which provides market data on the hotel industry worldwide) forecasts only 76.5% for 2024, he believes that is weak “considering the flights and passenger numbers expected at Dublin Airport.” In relation to supply, Barrett says “there is some new supply opening later this year, but that is small compared to previous years, so I think Dublin occupancy will be about 80% next year.” The Business Post, 30th September
MIXED-USE
Racecourse Road, Roscommon Agent Moore Larkin is seeking offers of €2.1m for the Roscommon Business & Enterprise Park on Racecourse Road in Roscommon, a retail/warehousing/office and yard facility on a 4.74-acre freehold site in Co Roscommon. There are 60 car park spaces with ancillary parking, loading areas and yard space at the side and rear of the property. The property extends to approx. 105,174 sq. ft, including approx. 64,475 sq. ft on the ground floor; another 14,100 sq. ft of space at mezzanine level and just over 27,986 sq. ft of secure yard space. The annual net rental income stands at approx. €214.63k with anticipated rental increases at rent reviews and lease renewals. There is also vacant accommodation to be leased. The tenants include Euro Car Parts, P&G Cards, O’Hara’s Bakery, Circet and Roscommon Windows, among others with individual leases expiring from 2024 up to 2030 in one instance and other leases have expired and are rolling over. The Business Post, 30th September
INDUSTRIAL / LOGISTICS
IDA Industrial Estate, Co Waterford CBRE is guiding a price of €17.85m for the former Cartamundi Ireland production facility in Co Waterford. Located in the IDA Industrial Estate on Cork Road, the property extends to 246,646 sq. ft and incorporates ancillary office accommodation of 11,010 sq. ft. Prior to its recent closure, the property had served for many years as the Irish production facility for board games such as Monopoly, Trivial Pursuit, Connect 4 and Cluedo under three different owners, namely MB Games, Hasbro and most recently, Cartamundi. The Irish Times, 27th September
RETAIL
Ulster Bank Branches Cushman & Wakefield is inviting offers for the third and final tranche of properties in Ulster Bank’s former bank branch network. There are 15 premises available for sale in this phase of the process, which is taking place as part of the bank’s ongoing withdrawal from the Irish market. Thirteen of the properties are freehold/long-leasehold while the remaining two buildings are leasehold. The 13 freehold/long leasehold interests range in value from approx. €100k to more than €850k for the bank’s prominent branch building on Winthrop Street in Cork City Centre. The two leasehold interests meanwhile have passing annual rents of €135k and €85k respectively, with the unexpired term of the leases being just under seven years on one and just under six years on the other asset. The leases will be marketed as available by way of assignment or sublease. The Irish Times, 27th September
RESIDENTIAL / DEVELOPMENT
Dunboyne, Co Meath JLL is guiding a price of €8.95m for a 72.87-acre residential land bank in Dunboyne, Co Meath. The lands comprise a single-storey derelict house with a number of farm buildings including approx. 26.78 acres zoned A2 New Residential under the Meath County Development Plan 2021-2027. While the balance of the lands extending to 46.09 acres is not zoned, the selling agent is of the view that they will be rezoned in the future owing to their proximity to Dunboyne town centre. The lands are available for sale in two separate lots. Lot 1 comprises the residential holding while lot 2 is made up of the unzoned lands in their entirety. The Irish Times, 27th September
Lombard Street and Townsend Street, Dublin 2 Located at 19/20 Lombard Street and 112/114 Townsend Street, a 0.165-acre brownfield site is being offered to the market by JLL on behalf of a private investor at a guide price of €5.5m. The property is zoned Z5 under the Dublin City Development Plan 2022–2028. A broad range of uses are permissible under this designation including hotel, residential and purpose-built student accommodation. The Irish Times, 27th September
Irish Residential Properties Reit has completed the sale of approx. 200 residential units in West Dublin to Tuath Housing for more than €72m. The sale of the properties, which includes apartments, houses and duplex units, was completed ahead of schedule and brings an “attractive return” on the original acquisition costs for the development. The proceeds will be used to strengthen the company’s balance sheet and retire its higher cost debt under its revolving credit facility. The deal included the sale of 91 units in Hansfield Wood in Dublin 15 for €38.1m, with an additional 103 apartments, including Piper’s Court, and a small eight-unit apartment building in Hansfield Wood raising approx. €34m. Originally announced in August, the deal is part of Ires’s €100m asset disposal programme, which now stands at €96.5m delivered. Ires currently owns 3,734 apartments and houses for private rental in Dublin and Cork. The Irish Times, 3rd October
Residential Zoned Land Tax (RZLT) A large majority of landowners, including some of the state’s biggest developers, have failed in their appeals contesting the government’s new land hoarding tax. An analysis of appeals lodged against the new RZLT has shown that An Bord Pleanála has rejected approx. 80% of appeals to date. The planning authority has received 608 appeals challenging the imposition of the new land hoarding tax, which is due to come into effect in February 2024 and will charge owners of vacant land a 3% levy on the site’s market value. Decisions have been made on 322 of these cases, with An Bord Pleanála rejecting 257 of the appeals. An Bord Pleanála’s decisions have prompted some landowners to explore legal challenges in a bid to overturn the planning body’s decision. The Business Post, 27th September
Respond, the affordable housing association, has signed heads of terms with developers to deliver €2bn worth of residential projects. The deals will involve the charity and its development partners commencing construction on approx. 3,400 new homes in the next year, half of which will be cost rental homes at 25% below regular market rents. According to Declan Dunne, chief executive of Respond, the one-off housing projects will range in size from 200 to 725 units on individual sites and be worth a collective €2bn. The charity has 1,400 homes under construction at present. Dunne said the 3,400 new homes will be additional supply to the market and will not involve Respond competing with private buyers. The Business Post, 1st October
The Peter McVerry Trust (PMVT) is reviewing the delivery of its entire social housing programme as it looks to “minimise” its activity in the wake of revelations of financial problems at the homeless charity. The move raises questions over the delivery of hundreds of homes after PMVT said in 2021 that it aimed to deliver 1,200 social homes by 2025. PMVT currently owns, leases or manages more than 1,110 homes across the country. Following the revelations, the Approved Housing Bodies Regulatory Authority appointed inspectors to conduct a statutory investigation of the charity. It emerged that the trust is currently repaying €8.3m in tax debts to the Revenue. All repayments have been met to date, the spokeswoman for the charity said. The Business Post, 1st October
House Prices The latest property price index from the CSO showed that house prices outside the capital had risen by 3.8%, with the southeast of the county experiencing a 4.8% rise. A report from Daft.ie, the property website, for the third quarter of this year, reached a similar conclusion: house prices are increasing across the country but growth is subdued in Dublin. The Sunday Times, 1st October
Tax on Second-Hand House Sale Developers have called for homeowners to be slapped with a new levy on the sale of second-hand houses in a move that could add more than €5k to the cost of a property in Dublin. The Construction Industry Federation (CIF) is pushing the government to introduce a 1% levy in the upcoming budget which would be used to spread the cost of delivering transport and utility infrastructure more evenly. The policy suggestion comes as house prices continue to climb with the cost of a home outside of Dublin jumping by approx. 4% in July compared to 12 months earlier. The average cost of a second-hand home in Dublin currently stands at more than €525k, according to figures from the CSO. With approx. 38,000 second-hand homes sold in Ireland over the last year at an average price of approx. €320k, the introduction of such a levy would raise more than €120m in new taxes. If this funding was ringfenced for transport and utility infrastructure for new homes, CIF believes it will eventually reduce the cost of new homes by lowering costs for developers. The Business Post, 1st October
Derelict Site Levy Unpaid levies of approx. €6.8m are owed to Dublin City Council from the owners of more than 100 derelict properties, new figures show. More than 400 properties around the city are now under assessment by the city council for inclusion on the derelict sites register. The register currently includes 107 sites and buildings which “give out the impression of an area deteriorating, are a magnet for antisocial behaviour, and take valuable housing stock out of circulation”, the council said. More than 12,000 homes and commercial properties are vacant across Dublin, with 40% empty for more than four years – putting them at significant risk of dereliction, a new analysis revealed. The levy is charged at 7% of the market value of the property, with interest charged on unpaid levies at a rate of 1.25% per month. The council is owed outstanding levies of €6.8m but received a significant boost this year with €920k paid to date, up from €490k for the whole of last year, €417.4k in 2021 and, €402.3k in 2020. The Irish Times, 27th September
Housing Obstacles There are “significant obstacles” to providing the state with sufficient housing to meet demand, according to Brendan McDonagh, chief executive of Nama. McDonagh made the comments in his opening statement to PAC, where he cited these obstacles as causing delays in meeting demand. “One of these is the achievement of the appropriate planning approvals. Planning costs are significant and average approx. €3k per residential unit. Achieving a grant of planning continues to be a significant challenge, with many applications awaiting a decision from An Bord Pleanála (ABP) for almost 2 years,” McDonagh said. “In addition, our debtors and other housebuilders deem a judicial review almost inevitable when a planning approval is granted by ABP.” In figures McDonagh shared with PAC, he said that the cost of building an apartment rose by 18% in 2022 while the price of a three-bed house increased by 6%. The Business Post, 28th September
Docklands, Dublin Nama made a €550m profit from its activities in the Dublin docklands Strategic Development Zone (SDZ), its chief executive told the Dail’s public accounts committee. Brendan McDonagh revealed that the state bad bank made big returns from the sale of developments in the North Lotts and Grand Canal areas of the docklands. Nama entered into a number of joint ventures with international investors to develop vast tracts of land. These sites delivered 4.2m sq. ft of commercial space and 2,183 residential units, accommodating 20k office workers and 5k residents in the area. McDonagh also revealed that Nama made a “loss” of €10m on the sale of its remaining 20% stake in the Poolbeg SDZ to Oaktree Capital and Ronan Group Real Estate. The state sold an initial 80% interest in Poolbeg to Oaktree and RGRE for €200m. It is understood that the total take from the former glass bottle factory site is €240m. The Sunday Times, 1st October
Goatstown, South Dublin Irish property investment group Tetrarch has lodged plans to build 114 residential units for “assisted living” on land owned by the Society of Sacred Heart (Irish/Scottish Province) order of nuns beside Mount Anville girls schools in Goatstown, South Dublin. Tetrarch’s large-scale residential development planning application with Dún Laoghaire Rathdown County Council is seeking permission to build 100 apartments (across seven blocks) and 14 houses on a 2.9-acre site known as the “old farm”, on the grounds of Mount Anville. In addition, there would be 76 car parking and 147 bicycle spaces, a gym area, a small cinema and medical and wellness areas on the site. Subject to planning approval, construction could commence in the fourth quarter of 2024, with the first units available for residents in early 2026. The Irish Times, 30th September
Goatstown, South Dublin An Bord Pleanála has rejected a plea by Charjon Investments Ltd for a site adjacent to the Goat Bar & Grill in Goatstown not to be liable for a new land hoarding tax. The appeals board ruled that the site known as the “Goat Pet Farm” on Lower Kilmacud Road in Goatstown, Dublin 14, be subject to the new Residential Zoned Land Tax (RZLT), which comes into force next year. The company had told the council that the site has previously been the subject of numerous other development attempts, most notably the Goat Strategic Housing Development (SHD) project. This €186m, 299-apartment scheme was refused planning permission in 2021. The Irish Times, 28th September
Housing Agency Audit An audit by the State’s spending watchdog has found a scheme run by the Housing Agency to build social housing on former council-owned land has made little to no progress developing half of the sites in its portfolio. A report by the Comptroller and Auditor General (C&AG) said “no viable development options” had been identified for 39 of the 73 sites the Housing Agency took over to build housing. The report said agency officials had assessed that more than 5,000 social housing units could be built on the land, but progress had been made on only a number of sites. The State body had sought expressions of interest from not-for-profit housing bodies to build homes on 15 of the sites, but the report said “no suitable proposals were received”. At present, 14 of the plots of land are leased to farmers, while one site is leased to a GAA club. To date, 676 social housing units had been built across 14 sites under the scheme, it said. The Irish Times, 29th September
Sandyford, Dublin 18 Dún Laoghaire Rathdown County Council has granted planning permission to the Comer Group to convert the Sentinel tower at Sandyford in South Dublin from its previously proposed office use to 110 apartments. While the group had already secured approval in 2017 to redevelop the Sentinel with 294 “office suites” with small work-live studio facilities, the proposed scheme never went ahead, largely due to access issues to the Sentinel’s basement car park, with the access ramp remaining in the ownership of the neighbouring Rockbrook apartment-scheme’s owner Ires Reit. However, the Comer Group recently bought the adjoining “RB Central” site from Ires giving them a majority share of the basement and allowing the Sentinel apartment scheme to progress. The RB Central site has permission for 428 apartments which are already under construction. 60 of the units at the building are set to be two-beds, while the remaining apartments will comprise a mix of 22 one-beds and 28 three-bed units. The Irish Times, 28th September
Mortgage Approvals The number of borrowers approved for home loans in August fell sharply, according to new figures from the Banking and Payments Federation of Ireland (BPFI). Data released shows that the number of mortgages approved fell by 4.5% MoM and by 18.2% compared with the same period last year. The figures published by the banking lobby group also indicate that first-time buyers (FTBs) remain the dominant cohort within the mortgage market with the number of approvals for the group topping 30,000 in the 12-month period to the end of August, a first since the data series began in 2011. Overall, a total of 4,534 home loans were approved in August, a decline of 4.5% from May, which was the busiest month for FTB approvals since 2011. Of the total, 62.4% or 2,829 of the loans approved were for FTBs. The overall value of mortgages approved in August fell 3.9% to €1.3bn, a 14.2% decline on the same period last year. The Irish Times, 29th September
OTHER
Kildare Street, Dublin 2 The National Library of Ireland (NLI) has lodged a planning application to substantially redevelop the west wing of its building on Kildare St in Dublin city. The proposed redevelopment would refurbish and adapt the existing structure to create public areas across the six levels of the building. The proposal also includes a six-storey extension in the building’s courtyard. Included in the application is a proposal to create exhibition and event spaces along with a café and retail spaces. Delivery of the project is being led by the NLI and the Office of Public Works. The Business Post, 27th September
Dingle, Co Kerry Interest in 1,000 acres of land and 400 acres of forestry on the Conor Pass in Dingle, Co Kerry, one of Ireland’s most scenic and famous locations, has been expressed by two parties, according to the auctioneer involved in the sale. Taoiseach Leo Varadkar has said the State would like to buy the land at a “reasonable price” but will not pay the €10m asking price. The site includes four lakes – Pedlar’s, Atlea, Beirne and Clogharee – along with a waterfall and mature forest. American owner Michael Noonan bought the land in parcels over the years and he farms it with grazing sheep. The Irish Times, 30th September
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