6th April (Issue 291)
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.
INDUSTRIAL
Little Island, Cork Commercial agent Lisney has launched a new high bay warehouse development to the market at Little Island in Cork. This is the first new business park to be developed in Little Island in over a decade and it will provide much needed new warehouse and industrial space. The new seven-hectare (17.4 acre) Harbour Gate Business Park development is situated in an established industrial and commercial location, some 9km east of Cork city centre. The new park has full planning permission for four high bay warehouse/logistics/light industrial units which will provide a total floor area of about 18,580 square metres (c200k sq. ft) across four main blocks. The site has been cleared and construction will recommence once Covid-19 related restrictions on construction are eased. The new buildings are available for sale or to let. The Business Post, 4th April
Bray, Wicklow Trinity Biotech’s lab and manufacturing unit in Bray, which was completed in 2006, has been put up for sale. The property, which is being offered to the market by agent Knight Frank at a guide price of €10.5 million, offers the prospective buyer a net initial yield of 6.8% (assuming standard 9.96% acquisition costs). The figure does not account for any benefit that might be accrued from the €4.3 million capital allowance attached to the asset. Located at the heart of the IDA Business Park on Bray’s Southern Cross Road, Block 2 is a modern two-storey high-tech laboratory production facility extending to 3,977sq m (42,817sq ft) with surface car-parking spaces and a secure service yard to warehouse/cold storage section. Trinity Biotech is an Irish-founded and headquartered company quoted on the Nasdaq exchange, and with facilities spanning Europe, America and Canada. The Irish Times, 31st March
RESIDENTIAL / LAND
Claremont Road, Dublin 4 The YMCA gym and playing pitches in Sandymount have been put up for sale. Extending to an area of 2.6 hectares (6.6 acres), the site is zoned for the delivery of residential and open space and is being offered to the market by agent Savills at a guide price of €10 million. The property is owned by the YMCA and operates as a gym and sports facility for its members currently. Built in 2001, the gym is a modern two-storey building, which opens out into a large area with playing pitches and all-weather hockey pitches. There is a surface car park also with parking for about 40 cars. The site enjoys a prime location just two minutes from Sandymount village and is accessed from Claremont Road via an internal access road which is shared with the adjoining apartment complex known as “The Willows”. The Irish Times, 31st March
Player Wills, Dublin 8 The company behind plans for a 19-storey tower at the former Player Wills factory site in Dublin 8 said it had “no intention” of developing a co-living scheme until the retention of the old factory was mooted. US property group Hines last December submitted plans to An Bord Pleanála for 732 apartments on the land, incorporating the factory building on the South Circular Road. One third of the apartments would be co-living units. The application was submitted on December 21st, just one day before the de facto ban on co-living developments came into force. Minister for Housing Darragh O’Brien in late November announced the ban on new co-living schemes, where shared kitchen and living facilities serve multiple en suite bedrooms. However, the ban was not signed into law until December 22nd. Dublin City Council is now proposing to add the old cigarette factory to the Record of Protected Structures following the request of former minister for housing Eoghan Murphy in 2017 and a 2018 motion from then Labour councillor Rebecca Moynihan, now a Senator. Hines said that when the company bought the site in December 2018 it had intended to retain only the front of the factory. However, Hines said it subsequently became clear there was “a push to retain the whole factory”, which made a co-living scheme the only viable option. The Irish Times, 6th April
House Prices According to the latest Daft.ie report out last week price momentum continued into 2021, with asking prices rising by 8% yoy in Q1 2021. Although demand has held up surprisingly well, aided by a build-up of savings amid those that have been relatively unaffected by lockdown, the primary driver of the upward price movement is supply; the stock of properties available for sale fell by 40% over the past twelve months as; (1) homeowners were reluctant to sell in the middle of a pandemic, and; (2) new supply has been curtailed by restrictions on building activity. The stock for sale is now at an all-time low across the country which will put ongoing upward pressure on prices in the coming months. Regionally, the greatest reduction in supply (-48%) and the largest rise in prices (+12%) is in Leinster, excluding Dublin. Asking prices in Dublin rose by 7% yoy amid a 31% reduction in the stock for sale. Daft.ie Report
RETAIL
Hammerson, Dublin Hammerson, a UK-listed property group, has scaled back plans for its six-acre site in Dublin Central and switched the mix away from retail towards offices and residential units. Original plans for 23,500 sq m of retail space have been scaled back to 6,000 sq m, less than 10 per cent of the scheme. Speaking at a webinar organised by Dublin Chamber on Thursday, Ed Dobbs, Hammerson’s development manager, said it was taking a long-term view. “In the current market where retail is really struggling, we think this is the right location for that amount of retail,” he said. The company will submit three planning applications for the Henry Street and Moore Street locations next month, with submissions for O’Connell Street to follow around the middle of summer. If successful, work on Dublin Central, one of the city’s largest regeneration sites, could begin as early as next year. The plans are substantially different to what was proposed in the company’s masterplan two years ago. The new scheme will be cut from 90,000 sq m to 77,000 sq m, with a shift towards offices and residential units plus a significantly reduced retail element. The Sunday Times, 4th April
Skehard Road, Cork A planning application is to be lodged in the coming week for a new Aldi supermarket and residential development on Cork’s Skehard Road. It will form part of a new mixed-use scheme that will feature 28 residential units and a café. The site will be developed by developers Lyonshall and is located next to the Scally’s SuperValu supermarket near the junction with Church Road. It is also close to the existing Aldi supermarket at Blackrock Hall which opened in 2008. Aldi said the new store will employ up to 30 permanent staff with an additional 50 jobs created during construction of the proposed new store and development. The planning application will be lodged with Cork City Council in the coming weeks and if approved the store will likely open in 2024. The Irish Examiner, 1st April
OFFICE
Tik Tok, Dublin Tik Tok has chosen the Sorting Office at Grand Canal Dock to accommodate up to 2,000 workers, according to sources. The Sorting Office was developed by Pat Crean’s Marlet but bought by the Singapore-based real estate investment trust Mapletree for €240 million in 2019. Google had originally intended to lease the building but abandoned its plans in September. Completed in July 2020, it has 19,000 sq m of office space over seven floors. Cushman & Wakefield, the company appointed to advise Tik Tok on office locations, refused to comment on Friday. The Sunday Times, 4th April
Ballsbridge, Dublin 4 MongoDB, a US-based software company, has been forced to take a $2.1m (€1.8m) impairment related to its former Dublin office after failing to secure a sub-tenant due to Covid-19. Last June, it was revealed the Nasdaq-listed tech company, valued at over $17.1bn, had signed a $27m lease on a new office in Dublin with capacity for 500 employees. Over 200 staff will have access to the new facilities when it opens. The new office, based in Building 2 of 1 Ballsbridge, Shelbourne Road, Dublin, is owned by the Comer Group. It is located close to MongoDB’s former office, which is also on Shelbourne Road. MongoDB revealed the $2.1m impairment charge in its recently published results. It said the lease commenced on its new office on February 1, 2020, with the firm no longer occupying the former office. According to the results, the company had “been unable to assign nor secure” a sub-tenant for the former Dublin office. MongoDB recognised the impairment charge, which “represented the remaining carrying value of the right-of-use asset for this office location”. Irish Independent, 4th April
KPMG Dublin KPMG has narrowed its search for a new Dublin headquarters down to three potential locations in the city centre. Following the receipt of proposals from six of the country’s foremost developers, the Big Four accounting and advisory firm has refined its deliberations to consider schemes being delivered by Hibernia Reit, the Kenny family’s Clancourt Group, and Shane Whelan’s Westridge Real Estate respectively. KPMG currently occupies two buildings in Dublin city centre, one at Stokes Place on Harcourt Street, and another in the IFSC, but is looking to accommodate its entire complement of 2,500 office-based workers under one roof following the expiration of its existing leases in 2026. While KPMG’s original shortlist had also included proposals from Johnny Ronan’s Ronan Group Real Estate (RGRE), US real estate firm Kennedy Wilson, and a company controlled by the family of businessman, Larry Goodman, these are no longer being considered as part of the process. The Irish Times, 31st March
JLL Report Property investment deals this year could exceed the €3bn seen in 2020 according to JLL Ireland. Their estimate is based on three factors including an estimate that €650m of sales were seen in the first quarter of 2021 for properties worth more than €1m. “We are also aware of a number of large-scale opportunities which we expect to trade in the next nine months. It is also dependent on the fact that we continue to see the strong demand levels for Irish real estate that we have seen in the last few years and a resumption of travel and normal business activity,” JLL said. The largest investment deal in the first quarter was Blackstone’s purchase of the Project Tolka office portfolio for €290m. It included a 74pc interest in the Burlington Plaza office building at Burlington Road, Dublin 4 and The Three Building at 28/29 Sir John Rogerson’s Quay, Dublin 2. JLL Q1 Research Report
OTHER
Montrose Student Accommodation, Dublin 2 A subsidiary of property giant Hines has reported the renovation and closure of its Montrose student accommodation initially due to fire safety concerns may cost nearly $26m (€22m), up from $11m last August. Hines Global Income Trust, which is understood to have no bearing on Hines’ other Irish assets such as Cherrywood, revealed the potential rise in costs in its recent annual results. It said the cost of renovation, which had gone beyond the original plan, at Aparto Montrose in Dublin had been estimated at around $21.9m. This had grown from an $11m estimate last August. According to the results, the continued closure, due to construction delays caused by Covid-19, could lead to a reduction in revenue in excess of property expenses of around $4m. Hines Global Income Trust had estimated a revenue loss when it first shut the facility of up to $3m. Irish Independent, 4th April
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