4th October (Issue 66)

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.




McDonald’s Temple Bar: An unnamed German investor has acquired the 8,500 sq. ft. property let to McDonald’s in Temple Bar, Dublin for c. €6.25m.  McDonald’s occupies the premises under a 20-year lease from April 2013 with a break option after ten years.  The rental income is €350k p.a. offering a net initial yield of c. 5.36%. The Irish Times, 28th September

Merchants Quay Shopping Centre: Cork city’s 27 year old Merchants Quay Shopping Centre has been placed on the market for sale with joint agents CBRE and Savills.  The sales price is expected to be in excess of €12.5m providing a net initial yield of c. 11.25% on the existing rent of €1.47m p.a.  The tenants include Laura Ashley (paying annual rent of €292k), Boots (€193k), Costa Coffee (€130k) and The Pantry (€68k).  The anchor tenants of the centre are Marks & Spencer, Dunnes Stores, Debenhams and Supervalu but they hold long leasehold interests.  There is planning permission for the redevelopment of a number of internal retail units which will increase the rent roll.  The Irish Times, 28th September

Manor West Neighbourhood Centre: Joint agents Cushman & Wakefield and Sherry FitzGerald Stephenson Crean are marketing Manor West Neighbourhood Centre in Tralee, Co Kerry for sale with a guide price of €4.5m.  The investment is 87% let, generating rent of c. €482k and providing a net initial yield of 10.3%.  The centre includes a service station, seven retail units, offices and a restaurant.  The service station is let to Topaz under a 20-year lease from 2001 at a rent of c. €324k p.a.  Other tenants include Boyle Sports and Kerry County Council.  The Irish Times, 28th September

Kildare Village: The Leinster Leader has reported that Value Retail Dublin is in pre planning discussions with Kildare County Council to further expand Kildare Village retail outlet centre.  The proposed scale is reported as similar to that of the second phase €50m expansion completed less than a year ago which comprised of 33 new shops and two restaurants.  The outlet attracted c. 2.5m visitors in 2015.  The Sunday Times, 2nd October



Charlemont Exchange: Knight Frank is inviting offers of €45m for vacant possession of the existing HQ of ACCLM/Rabobank in Charlemont Place, Dublin 2.  The five storey property comprises of three interconnecting office buildings around a central courtyard which were completed in 1997.  It has a net internal floor area of c. 73,000 sq. ft and 94 car parking spaces.  Developers are expected to look at the potential to refurbish or redevelop the premises.  The Irish Times, 28th September

Hume House: Irish Life has reacquired Hume House in Dublin 4 for c. €35m, a purchase price which represents a substantial discount to the c. €100m sales prices achieved for it in 2006.  Sean Dunne previously acquired the property from Irish Life as part of a larger transaction.  Mr Dunne’s assets were later acquired by NAMA, who sold Hume House to Blackstone in 2014.  The 81,804 sq. ft. Hume House sits on a 0.35-acre site with planning permission to develop a six, eight and nine storey complex extending to c. 182,000 sq. ft with 53 basement car parking spaces. The full redevelopment costs of Hume House is estimated at c. €50m, while a smaller project of refurbishing and extending it is estimated at c. €20m.  The Irish Times, 28th September

Sandyford: CBRE is guiding €14.2m for two office investments in Sandyford, Dublin 18 providing a net initial yield of 7.2%.  The first opportunity, Ravenscourt (90% occupied), extends to c. 62,200 sq. ft. with 119 basement car parking spaces and is guiding at €11m.  The rental income is c. €756k p.a. offering a net initial yield of c. 6.58%.  The weighted average unexpired lease term (WAULT) is c. 5 years and the tenants include Chill Insurance and Innopharma.  The second opportunity, Mercury House, extends to c. 29,520 sq. ft. with 52 surface car parking spaces and is guiding at €3.2m.  Mercury Engineering occupies the entire property under a 20-year lease from 2005, with the current rent at c. €311k p.a. offering a net initial yield of c. 9.3%.  The Irish Times, 28th September

76 Baggot Street: It is expected that Cushman & Wakefield will be shortly instructed to offer 76 Baggot Street, Dublin 2 for sale, guiding in excess of €30m.  The c. 40,200 sq. ft. five storey premises was recently refurbished and is fully let to US tech firms FitBit and Storyful who each occupy it as their EMEA HQ.  The terms of the leases are not reported.  The Irish Independent, 29th September

Georgian Building, Dublin 2: Colliers International has been instructed to sell a 4-storey over basement terraced Georgian building at 45 Mount Street Upper, Dublin 2.  The fully vacant office property (net internal floor area of 4,200 sq. ft. with three car parking spaces to the rear) is guiding €1.85m and has potential for a mixed use development.  The Sunday Business Post, 2nd October 2016



Trinity Lodge Portfolio: Three Georgian guest houses dating from the 1730’s with 26-beds in Dublin city centre have been placed on the market for sale with the benefit of vacant possession for in excess of €6.5m.  Two of the houses, nos. 29 and 30, are on the east side of South Frederick Street, while no. 12 is on the opposite side of the road.  It is estimated that the properties (c. 13,000 sq. ft. in total) could generate €1m p.a. in rental income.  29 South Frederick Street also includes a restaurant which closed c. three years ago but could be re-let at an estimated rent of c. €50k p.a.  The Selling Agent stated that the existing trade is “a highly profitable business”, and possible developments include an expansion of the existing food and beverage facilities, a guestroom upgrade and a conversion of the basement level.  The Irish Times, 28th September 

The Bram Stoker, Clontarf: The Bram Stoker (Clontarf Court Hotel) has been sold for c. €1.5m by CBRE on the instructions of receiver David Van Dessel of Deloitte.  The three storey 25-bed hotel had a guide price of €1m and is currently let at €90k p.a. on a four year, 9 month lease from June 2012.  The Irish Independent, 29th September 2016

Dalata Burlington: Dalata has announced that it has agreed a lease to operate the former 502-bed Burlington hotel in Dublin city centre from the German fund Deka, which is set to acquire it from Blackstone for c. €180m shortly.  Dalata advised the stock exchange that it agreed a conditional deal to take on a 25-year lease for a payment of €2.5 million.  The hotel is expected to be renamed under Dalata’s Clayton brand.  The hotel had revenues of c. €29.5m and profits of c. €2.2m in 2015.  The Irish Times, 30th September

Fitzpatrick Lifestyle Hotels: Fitzpatrick Lifestyle Hotels has confirmed that local investors John Malone, John Lally and Paul Higgins have acquired its Beacon, Morgan and Spencer hotels in Dublin.  It is believed that the investors paid in excess of €150m to acquire the hotels.  The 165-bed Spencer is located in the IFSC, while the Morgan and Beacon are located in Temple Bar and Sandyford.  The trio of investors already own the Westin and InterContinental hotels in Dublin, as well as other properties in Galway and Limerick.  It is reported by The Sunday Times that The Spencer Hotel was sold for more than double its acquisition price as it was bought from NAMA for €33m in January 2014, and valued at c. €70m in the recent deal.  The Irish Times, 29th September & The Sunday Times, 2nd October



Leeside Apartments: Joint agents CBRE and Cushman & Wakefield are guiding in excess of €10m for a block of 78 apartments in Cork city centre.  Leeside Apartments is spread out over five interlinking blocks and contains a mix of one, two, three and four-beds.  Of the 78 apartments, 35 are privately let while the remaining 43 are used for student accommodation and summer rentals.  The projected rental income for 2016/2017 is c. €800k, however, letting of the vacant units would increase the rental income to c. €970k. The Irish Times, 28th September

Navan Development Site: Offers of €2m are being sought by joint agents Sherry Fitzgerald Reilly and Cushman & Wakefield for a 3.75-acre site in Navan, Co. Meath.  The site is located on Kentstown Road and has planning permission until October 2017 for 19 detached houses consisting of 12 x 4-beds and 7 x 5-beds. The Irish Times, 28th September

Dublin 17:  Cairn Homes has sought planning permission for 94 mixed units on a site of c. 6.7-acres located on the former Balgriffin Park lands, Dublin 17.  The site is located east of Cairn Homes’ existing Parkside residential development (Phase 1 near completion with 39 houses sold at an average sales price of €297k per Cairn Homes H1 2016 accounts).  The proposed development comprises of 2 – 3 storey, 3 & 4 bed houses of 1 x detached, 32 x semi-detached and 61 x terraced houses from c. 1,200 sq. ft. – c. 1,800 sq. ft.  The total gross floor area of the development is c. 145,000 sq. ft.  NAMA Wine Lake, Issue 174, 26th September – 2nd October

Dublin 2:  New Generation Homes has placed a development site at the corner of South Richmond Street and Lennox Street on the market for €7m with joint agents Lisney and McNamara Property Consultants.  The 0.35-acre site has planning permission for a five storey mixed use building with c. 32,050 sq. ft. internal floor area.  The site was previously included in the Firefly Portfolio offered earlier this year that failed to sell as the target price of c. €325m – €350m was not reached.  The Sunday Business Post, 2nd October

Nassau House:  Meyer Bergman has sought planning permission to demolish Nassau House, Dublin city centre and build a new €200m mixed use retail and offices scheme.  The proposed six storey development over a double basement would increase the existing gross floor area of Nassau House from 101,200 sq. ft. to 246,000 sq. ft.  Meyer Bergman acquired Nassau House for €93m in 2015.  The Sunday Times, 2nd October

Docklands: The Sunday Independent reports that the Ballymore Group and its JV partner Oxley is to launch a new €111m development known as Dublin Landings on the market this week.  The development is located next to the Central Bank’s new HQ at North Wall Quay, Dublin 1 and will comprise of c. 678,000 sq. ft. of commercial space and 270 apartments (c. 1m sq. ft. in total).  NAMA owns the Freehold interest in the 5.8-acre site and will secure an income stream once it is developed and let in addition to a percentage of any future sales proceeds from the buildings.  The Sunday Independent, 2nd October

North Docklands: The Sunday Business Post reports that Ronan Group Real Estate (RGRE) (with the backing of Colony Capital) plans to build two new hotels and a student accommodation campus as part of a €300m mixed use 1m sq. ft. development in Dublin’s north docklands.  It is also reported that contractor PJ Hegarty has been appointed to work on the development to be called Spencer Place.  The development site was acquired by RGRE for €43m from receivers appointed by NAMA, and the sale closed on 30th September 2016.  The Sunday Business Post, 2nd October 2016

Housing Completions: The Department of Housing, Planning, Community and Local Government’s residential completion statistics (based on first connection to electricity utility) shows that 1,415 units were completed nationally in August 2016, of which 366 were in the four Dublin city and county local authority areas.  YTD completions are 9,167 nationally (19% increase YoY) with 2,620 in Dublin (46% increase YoY).  Housing start statistics (based on commencement notices filed by builders with local authorities) identify that 1,022 units were commenced nationally in August 2016 with 198 in the four Dublin local authority areas.  YTD commencements are 7,139 units nationally (34% increase YoY) including 2,081 in Dublin (flat YoY).  The official estimate of annual housing need is 25,000 units nationally, and 10,000 in Dublin based on a study by the ESRI in 2014.  NAMA Wine Lake, Issue 174, 26th September – 2nd October

Residential Transactions: According to DNG Residential research, 10,665 transactions valued at c. €3bn were obtained without a mortgage in H1 2016 in the Republic of Ireland.  The unencumbered figures represent c. 60% of the value of sales with c. €2bn in mortgages issued in H1 2016.  A survey from Sherry FitzGerald identifies that overall property prices increased by 4% YoY with an increase of 1.2% in the July – September period with stronger price increases outside of Dublin (1.6% increase).  The Irish Independent, 4th October



51-52 Mary Street, Dublin 1: CBRE is guiding €7.75 million for a modern mixed use four storey block generating a rent roll of c. €418k (providing a net initial yield of 5.17%).  The ground floor is let to Nando’s restaurant under a 15-year lease from 2011 at a current rent of €105k p.a. with a rent review overdue from June.  The upper floors comprise of 17 apartments (10 x 1-beds, 6 x 2-beds and one x 2-bed duplex) let to Roomyield Hospitality for four years, 9 months from September 2016 at rent of €313k p.a.  The Irish Times, 28th September

Taylor’s, The Star Bar, Swords: The c. 13,000 sq. ft. two storey over basement licensed premises and night club on Main Street, Swords, North County Dublin is reported as sold for close to €1.25m.  CBRE was the selling agent on instructions from its existing owners who are retiring from the licensed trade.  The Sunday Independent, 2nd October 2016

Primary Care Centres: The Sunday Times reports that UK specialist developers including Primary Health Properties are expected to develop some of the 200 – 250 Primary Care Centres (PCC) required by the Health Service Executive (HSE) across the country.  There are currently 92 centres operating which are intended to support health and reduce hospital admissions.  Of these, 45 were developed directly by the HSE and 47 were privately developed with c. €19m in rent p.a. being paid for these by the HSE.   Bank of Ireland has estimated that a PCC requires an average construction loan of €3.5m – €7m.  The HSE requires c. 8,600 sq. ft. for each primary care team and generally offers up to 60% of a PCC on a 25-year lease with no break clause.  Developers must find the sites and also demonstrate to the HSE that they can secure a certain required number of local GPs as tenants.  The Sunday Times, 2nd October 2016

CIÉ Sites: The Irish Independent reports that state transport company, CIÉ, recently signed a development agreement with Lovatell Limited, a joint venture of Clarendon Properties and BAM to redevelop a 5.9-acre site at Kent Station, Cork.  Subject to planning and CIÉ continuing to use the site for transport purposes, the mixed-use site could accommodate c. 540,000 sq. ft. of mixed use development, including housing, office and leisure.  It is also reported that CIÉ is in advanced negotiations to sell a site near Dublin’s Point Village with planning permission for c. 900 student beds.  It is further expected that CIÉ will seek partners to redevelop a 9.1-acre site at Connolly Station, Dublin 1 next year.  The proposed terms of the deals are expected to provide CIÉ with an annual income or a portion of rent roll paid by tenants up to 10%, whichever is greater.  The Irish Independent, 3rd October 2016

Construction Projects:  The Building Information Index (BII) and Construction Information Services (CIS) identifies that the value of new construction projects in H1 2016 was c. €3.6bn – an increase of €1.12bn (44%) YoY.  Munster had the largest increase in new projects at 70% with Connacht/Ulster next at 52%, then Dublin at 47% and Leinster at 16%.  The value of the industrial sector projects doubled to €385m YoY.  The commercial and retail sector increased by 10% to €1bn.   The residential sector recorded growth of 61% YoY with the value of residential construction projects commenced in H1 2016 at €1.67bn.  However, there was a 9% decrease YoY in the number of residential planning applications in H1 2016 with a 22% fall in Dublin.  The Sunday Business Post, 2nd October

NAMA Senior Debt: On 30/09/2016, NAMA redeemed €1bn of its senior debt leaving an outstanding balance of €3.6bn.  This equates to a cumulative total of 88% redeemed of its original senior bonds (€30.2bn were issued over the period 2010 – 2012), against its own internal target of 80% by 2016 year end, and 100% by 2018 year end.  An effect of the senior debt redemption is that it increases NAMA’s cost of capital. Prior to the €1bn redemption, NAMA had €4.6bn of 0% senior bonds and €1.6bn of 5% junior bonds – combined cost of funding of 1.3%.  The cost of funding has now increased to 1.6% with €1bn less senior bonds.  NAMA Chief Executive, Brendan McDonagh also stated on 30/09/2016 that NAMA is on course to deliver a surplus of at least €2.3bn.   NAMA Wine Lake, Issue 174, 26th September – 2nd October

Royal Dublin Society (RDS): Planning permission has been granted for a €26m redevelopment of the Anglesea Stand at the RDS, Ballsbridge to increase its capacity from 18,500 to 21,000 patrons and provide additional facilities.  The Irish Times, 3rd October


If you have an article which you would like to have considered for inclusion in our next weekly report, please contact us at info@origincapital.ie

Origin Capital funds senior debt transactions in the CRE investment sector, typically in the €3m – €15m range. If you would like to discuss how Origin Capital can help with your funding requirements, please contact us on 01 662 9264.

Origin Capital is a wholly owned subsidiary of LeBruin, a leading provider of corporate finance and debt advisory solutions.