5th July (Issue 53)
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.
RETAIL
Manor Mills Shopping Centre: Manor Mills Shopping Centre in Maynooth, Co. Kildare, has been brought to the market by DTZ Sherry Fitzgerald, who is guiding €13.4m. The 116,803 sq. ft. shopping centre consists of 26 retail units, four kiosks and a restaurant, with a weekly footfall of more than 50,000. The net operating income is in excess of €1.229m p.a., and tenants include Elverys, Vodafone and Hickey’s Pharmacy. Dunnes Stores anchor the shopping centre, however they own their unit. The shopping centre, which was prefunded by Davy in 2005 for c. €48m, offers a net initial yield of c. 8.77%. The Irish Times, 29th June
Stillorgan Shopping Centre: Kennedy Wilson (KW) has announced that it will spend c. €15m this year refurbishing the Stillorgan Shopping Centre in south Dublin. The refurbishment includes extending the floor area of the shopping centre by c. 15,000 sq. ft. KW purchased the shopping centre in 2013 as part of a portfolio which cost c. €306m in total. KW recently acquired the neighbouring Leisureplex bowling alley. Subject to planning permission, it is KW’s intention to demolish this bowling alley and extend the shopping centre onto the site in the next few years. The Irish Times, 1st July
OranTown Centre: Offers of €5.25m are being sought by agents TWM for OranTown Centre in Oranmore, Co. Galway. The centre was developed in the 1990s, has 35 retail and office units and is anchored by SuperValu, who part-own their unit. The total floor area of the two-storey centre is c. 45,000 sq. ft., with 230 parking spaces available. The annual rental income is c. €540k, and the other tenants include An Post and Coillte. There is scope to increase the rental income in the short term, with c. 11% of the centre vacant. The Irish Times, 29th June
Parnell Street: Four retail units on Dublin’s Parnell Street have sold for over €2.2m. Numbers 3, 4, 5 and 9 Kingscourt are occupied by Star Asia Foods, Subway, Roy Hogan Pharmacy and La Cucina Café. The annual rental income is €261k p.a. The Irish Times, 29th June
OFFICE
Clanwilliam Court: Hibernia REIT has paid London + Regional (L+R) c. €51m to acquire Blocks 1, 2 and 5 Clanwilliam Court near Lower Mount Street in Dublin 2. The properties had been on the market for c. €54m since the end of April. The properties have a combined floor area of c. 93,700 sq. ft., with 220 underground car spaces available. According to Hibernia, the current rental income is c. €2.9m p.a., equating to a net initial yield of c. 5%. Hibernia has also advised that the properties are c. 76% occupied and the tenants include ESB, An Bord Bia and Hines Real Estate Ireland. The Irish Times, 1st July
Baggot Plaza: Kennedy Wilson Europe Real Estate (KWE) has completed the redevelopment of its Baggot Plaza development on Upper Baggot Street, Dublin 4. In March 2015, KWE obtained planning permission to redevelop the property, with the application allowing for the floor area to be extended to 129,300 sq. ft. KWE has agreed to lease the property to Bank of Ireland (BoI) on a 25-year lease at a rent of c. €47.50 psf. BoI will have an 11-month rent-free period and there is a tenant only break option in year 20. The Sunday Business Post, 4th July
Shelbourne House: Savills is seeking offers above €31m for Shelbourne House on Shelbourne Road in Dublin 4. The 64,287 sq. ft., seven-storey block has 51 car spaces, sits on a 0.68-acre site and consists primarily of office space, however the block also includes three penthouse apartments. The current rental income of the property is c. €1.6m p.a., however this can be increased as 8,277 sq. ft. of office space and one of the apartments is vacant. The capital value of the property is €482 psf. The property also offers redevelopment potential as it adjoins two substantial sites being redeveloped in the area. These are the 2.02-acre site of the former Veterinary College and the 6.8-acre Ballsbridge hotel site. The Irish Times, 29th June
Cedarhurst Building: After recently being sold for c. €4m, the Cedarhurst Building in Sandyford, south Dublin is to be refurbished before being relet. The two storey property has a floor area of 17,488 sq. ft. and also has 39 car spaces. Once the works have been completed, agent Browne Corrigan Chartered Surveyors is to seek a rent of €20 psf for the property and €1k each for the car spaces. The Irish Times, 29th June
Scotch House: The Irish developer Castlepark has obtained planning permission from An Bord Pleanála to proceed with a c. €8m redevelopment of Scotch House on Burgh Quay in Dublin. The planning application will see the property redeveloped into a seven-storey block with over 40,000 sq. ft. of office space and 2,000 sq. ft. of retail space. The office space is expected to be completed by the end of 2017 and QRE is quoting rents of €55 psf. There are also 12 car spaces available to rent at c. €4k each. The Irish Times, 29th June
Georgian Market: The Irish Independent reports on the recovery of the Georgian office market. While the prices of Georgian properties can vary considerably, those in good condition and located on Merrion and Fitzwilliam Square can achieve capital values of c. €600 psf. The rental value of Georgians has also improved in the past few years, with rents of c. €35 psf achievable. The Irish Independent, 30th June
HOTEL
Shelbourne Hotel: Kennedy Wilson (KW) is set to undertake a €4m refurbishment of the five-star Shelbourne Hotel in Dublin’s St Stephen’s Green. Some of the €4m will be spent upgrading the best suites in the hotel, the corridors and the common areas. KW paid €112m in 2014 to acquire the hotel. The Irish Times, 1st July
Clayton Hotel: Savills is guiding over €8m for 24 suites in the four-star, 304-bed Clayton Hotel on Cardiff Lane in Dublin 2. The 24 suites have a total of 62 bedrooms, equating to a value of c. €129k per room. The total rental income of the suites is c. €467k p.a., with c. 24 years until their lease expires. The suites are let to Hanford Commercial Ltd, a Dalata subsidiary. The rent is subject to upwards-only rent reviews under the leases, with the next review in January 2018. The Irish Times, 29th June
Dublin Aparthotel: Tetrarch Capital has sought planning permission to develop a 159-unit aparthotel near Pearse Street in Dublin City Centre. The cost of developing the aparthotel is estimated at €25m, and Tetrarch hope to have the project completed by the end of 2018. Should the development be completed, Tetrarch will seek to lease the aparthotel to the serviced apartment company Staycity. The Irish Independent, 3rd July
Hotel Sales: According to CBRE, there were 29 hotels sold in H1 2016, with the sales proceeds exceeding €136m. These figures do not include hotels sold in loan sales, (e.g. NAMA’s Projects Emerald and Ruby). The outlook for H2 2016 is strong, with hotels such The Gresham Hotel, the Doubletree Hotel in Dublin 4 and Lyrath Estate in Kilkenny all at advanced stages in the bidding process. CBRE Ireland Bi-Monthly Research Report, July 2016
RESIDENTIAL / LAND
Property Prices: New figures from the Central Statistics Office (CSO) show that on a national basis, property prices rose by c. 6.9% in the year to May 2016, with prices rising by 0.2% in the month. In Dublin, prices rose by 4.8% in the year and 0.1% in the month of May. House prices in Dublin rose by 5.7% in the past year, while apartment prices fell by 1.1%. Excluding Dublin, residential property prices rose by 8.5% in the past twelve months and 0.1% in May. The CSO figures are based on property acquisitions financed by mortgages. CSO Residential Property Price Index, May 2016
Daft Report: The Daft.ie House Price Report for Q2 2016 shows that the number of properties on the market has increased for only the second time in five years. In June 2016 there were just over 25,000 properties for sale, a slight increase on the March figure. While an increase in supply is usually seen as a sign of a healthy market, the only other time the supply of properties rose was in Q2 2015. Therefore, it is unclear if this may be due to a seasonal trend. According to the Daft.ie report, property prices rose by 6.3% over the past twelve months. The figures in the Daft.ie report are based on properties advertised on Daft.ie. The Daft.ie House Price Report, Q2 2016
Haven Mortgage Rates: Haven, the AIB subsidiary, has announced cuts to their variable mortgage rates. Haven will reduce their Standard Variable Rate (SVR) mortgage by 0.32% to 3.4%, mirroring the SVR offered by AIB. Haven has also announced cuts to their mortgage rates which are based on loan-to-values. In a further positive for consumers, Haven will also pay a contribution of €2k towards legal fees for borrowers switching to Haven. The Irish Independent, 29th June
Development Land Sales: New research from CBRE for H1 2016 shows that there were 53 development land sales completed in the period, which had a total value of c. €489m. On a value basis, this compares favourably with H1 2015 when 54 transactions were completed for c. €276m. The total value of development land sales in 2015 was c. €770m. The Irish Independent, 5th July
INDUSTRIAL
Dublin Land Bank: Knight Frank, under the instruction of the receiver Grant Thornton, is inviting offers greater than €10m for a 166.43-acre land bank in north Dublin. The land bank is located off Junction 4 of the M50, near Dublin Airport. The current zoning of the site is broken down into 126.61-acres for warehouse and distribution, 32.05-acres for rural and 5.17-acres of open space. This may change in the future though, as the draft 2017-2023 Fingal development plan proposes that all but 5-acres may be used for general employment. The current occupant of the land bank is using it for agricultural use. The Irish Times, 29th June
Rosemount Business Park: IPUT has acquired the logistics facility of Dunnes Stores in Rosemount Business Park, Dublin 15 for c. €17.8m. The facility has a floor area of c. 270,000 sq. ft. and lies on a 12.84-acre site. Dunnes is paying a rent of €1.15m p.a. (c. €4.41 psf) for the facility, under a 20-year lease from September 2008. The rent may increase in the short term as there is a rent review outstanding, while there is a tenant break option in the lease in September 2019. The capital value of the property is c. €65 psf, substantially below the replacement cost of €120 psf. The Irish Times, 29th June
OTHER
Bank of Ireland (BoI) Branches: Murphy Mulhall is guiding €9.34m for five BoI branches in Leinster and Connaught which are producing an annual rental income of c. €574k. The branches for sale are in Ballina, Co. Mayo (rent €216k, value €3.5m), Mobhi Road, Dublin (rent €103k, value €1.85m), Ardee, Co. Louth (rent €114k, value €1.8m), Athy, Co. Kildare (rent €79k, €1.25m) and Edenderry, Co. Offaly (rent €61k, value €940k). The branches are all let on long term leases with no lease expiring in the next 16 years. There are also no break options in the leases and rent reviews are upward only. The properties can either be purchased individually or in one lot. The Irish Times, 29th June
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