6th June (Issue 99)
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.
LOAN / PORTFOLIO SALES
AIB Loan Sales: The Sunday Business Post reports that AIB is planning at least two major loan sales following its upcoming IPO. The sales will include a c. €1bn portfolio known as Project Redwood, and the paper reports that investors, who have asked not to be named, have said they have been told to expect an increase in repossessions as AIB tackles the remaining non-performing loans on its books. The bank is also believed to be in talks with a number of anti-repossession advocates in relation to the disposal of c. 5,000 home loans through a combination of mortgage-to-rent and debt sales, however AIB will need to ensure that any disposal is in line with the EU’s accounting standards. The majority of the organisations seeking to acquire the home loans intend on doing so as an Approved Housing Body (AHB), and the AHB structure will need to be in line with the views of Eurostat, the EU’s statistics agency. Sunday Business Post, 4th June
RETAIL
Supervalu Bray: Musgrave, the food retailer and wholesaler, has outbid several Irish and European funds to purchase the store rented by its subsidiary company Supervalu in Bray, Co. Wicklow. The purchase price in excess of €9m will offer a net initial yield of c. 6.9%, and is above the €8.4m guide price sought by Savills. The 27,000 sq. ft. store, which had been owned by Friends First for the past 10 years, is let to Supervalu at c. €650k p.a. on a lease that has another c. 13.5 years left to run. The Irish Times, 30th May
Capel Street Portfolio: Turley Property Advisers is guiding €2.95m for two shops and 11 overhead apartments at 37 and 38 Capel Street in Dublin 1, which are being sold on the instructions of a receiver. The portfolio is producing rental income of c. €250k p.a. although it is believed that there is scope to increase this figure to over €300k p.a. The mixed-use development is located midway along Capel Street, with one of the two ground floor and basement shops currently vacant in shell condition, and the other let to Moldovan Supermarket at €50k p.a. The 11 apartments consist of three extra-large two-bedroom units, six two-bedroom units and two one-bedroom penthouses. The Irish Times, 30th May
Navan Retail Units: Offers above €2.3m are being sought by Cushman and Wakefield for six retail units and overhead offices located beside the main entrance to Navan Shopping Centre in Co. Meath. The shops trade exceptionally well and have a weighted average unexpired lease term (WAULT) of over six years. The current rent roll from the complex, which has an overall area of 10,509 sq. ft., is c. €218k p.a. The retail tenants include O’Briens Wines, the Big Apple Fruit Company and Enable Ireland, while the overhead offices are rented by chartered accountants Farrell & Scully. The investment will offer a net initial yield of c. 9% after accounting for standard purchasing costs of 4.46%. The Irish Times, 31st May
Irish Retail Parks: According to two national surveys by Retail Excellence Ireland, both retail parks and shopping centres nationwide have generally seen an improvement in performance over the last two years. The research covers over 650 shopping centre stores and 80 retail park tenants with over 240 retail park stores, and although there was a general improvement, some retailers continue to struggle, with 13 retail parks deemed ‘unprofitable’. According to the Retail Park Review 2017, Castlebar Retail Park is the least profitable in the country, while the best overall retail park was Mahon Point in Cork. The research on shopping centres showed Dundrum Town Centre to be the strongest performing shopping centre in Ireland, with Liffey Valley also performing admirably. The Laurence Centre in Drogheda was rated the least healthy when scores on a number of measures were combined. The Irish Independent, 4th June
OFFICE
Seagrave House: A property fund run by Irish Life has sought planning permission to demolish Seagrave House, a five-storey building on Earlsfort Terrace and Davitt House, an adjoining building on Adelaide Road in Dublin city centre. Replacing the two properties will be a new office building with a gross floor area of c. 140,000 sq. ft. and a further c. 21,500 sq. ft. of space in a double basement. The Sunday Times reports that the new seven-storey building could accommodate up to 1,300 workers, and will contain a ground floor courtyard, outdoor terraces on the sixth and seventh floors and a basement car park with 33 parking spaces and 157 bicycle spaces. It is anticipated that the new building would command a premium rent due to its close proximity to Dublin’s central business district and St Stephen’s Green. The Sunday Times, 4th June
Dublin Airport Central: The Sunday Business Post reports that joint agents BNP Paribas and Bannon are seeking rents of c. €34.50 psf for the new Dublin Airport Central (DAC) office complex which the Dublin Airport Authority (DAA) is constructing at the Dublin Airport campus. Although this is roughly half the rents being charged for new prime office space in Dublin’s central business district, it is amongst the highest rents for Dublin’s suburbs, and well ahead of rents being achieved in Sandyford, Dublin 18. The rents not only reflect the quality and scale of the floor plates of the new buildings, but also the recent rents achieved when DAA rented the former Aer Lingus HQ building to the ESB for c. €31 psf. Dublin Airport Central will contain over 450,000 sq. ft. of new office space across four blocks, alongside a 742-space multi-storey carpark. It is believed that DAC is one of two locations that the Department of Health is seeking to attract the European Medicines Agency to Ireland when it relocates from the UK after Brexit. The Sunday Business Post, 4th June
HOTEL
Jacobs Inn Hostel: CBRE is guiding €13.5m for Jacobs Inn Hostel, which is located at 21-28 Talbot Street in Dublin city centre. The purpose-built hostel, which is one of the busiest in Dublin, contains 428 bed spaces which are heavily booked throughout the year, mainly by overseas visitors. The property is owned by the Tetrarch Hospitality Group, who also own more upmarket hotels such as The Marker and the Powerscourt. The company acquired and further upgraded the hostel in 2014, and CBRE has advised that it is being brought to the market in turn-key condition, with no substantial capital expenditure required. The Irish Times, 31st May
Scruffy Murphy’s Pub: An application has been lodged with Dublin City Council to demolish Scruffy Murphy’s pub near Merrion Square in Dublin city centre and construct a 36-bed aparthotel above a ground-floor restaurant, bar or café. The Irish Independent reports that a letter in the name of Tim O’Connor has been lodged with Dublin City Council outlining his vision for the site. Scruffy Murphy’s, which is currently closed, was offered for sale for €1m in 2016. The Irish Independent, 5th June
Clonea Strand Development: The Sunday Independent reports that Irish Property Investor Martin Birrane is seeking to build a c. €27m hotel and holiday development at Clonea Strand, near Dungarvan on the Waterford coast. Mr Birrane’s London-headquartered company Peer Group has stated that there is an opportunity for a 100-bedroom hotel alongside up to 80 holiday homes and townhouses for letting, as well as water sports facilities on the adjacent beach. A previous planning permission for the site was granted in 2008, and renewed in 2013. However, it is understood that a new planning application will be required, as there is not sufficient time to complete the development before the 2013 planning permission expires next year, and the requirements of the project have changed somewhat since the original application. The Irish Independent, 4th June
RESIDENTIAL / LAND
April Mortgage Approvals: The April 2017 report by the Banking & Payments Federation Ireland (BPFI) on mortgage approvals shows that there were 3,340 mortgages approved in April 2017. The value of mortgages approved was c. €685m. Based on the value of mortgages approved, these figures represent an increase of c. 19.7% YoY (c. €572m April 2016) but a decrease of 12.5% MoM (c. €783m March 2017). Based on the value of mortgages approved, the first-time buyer segment grew by 25.8% YoY. BPFI Mortgage Approvals April 2017
INDUSTRIAL
Northwest Business Park: Knight Frank is guiding €9.75m for a 135,000 sq. ft. logistics facility located at Northwest Business Park in Ballycoolin, Dublin 15. The modern detached high-bay logistics facility is located on a 6.45 acre site, and contains 21 dock levellers, three standard grade doors and has a clear internal eaves height of 12m. Northwest is home to a range of well-known logistics companies and occupiers, including Dunnes Stores, Masterlink Logistics and DSV. The Irish Times, 1st June
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