6th March (Issue 136)
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
South King Street Dublin: Global property investor Hines, has outbid three overseas investors to buy a row of shops, offices and apartments next to the Gaiety Theatre on Dublin’s South King Street for €165m. The underbidders were two German funds and the Spanish founder of the Zara fashion chain, Amancio Ortega. It was Hines’ second significant acquisition in the Grafton Street area after it paid c. €55m for the Grafton Collection, a portfolio of buildings at the junction of Grafton and Duke Streets, almost two years ago. The South King Street investment was sold on behalf of US fund Lone Star, with a projected rent roll of c. €6.8m and a 50% retail weighting. The centre will have 49,158 sq. ft. of retail space and 56,936 sq. ft. of office accommodation. Zara (€915k p.a.), H&M (€800k p.a.) and Warehouse (€600k p.a.) are the main retail tenants while US survey technology provider Qualtrics is the main tenant in the office element, known as One Clarendon Row, paying €58 psf for 27,340 sq. ft. Savills and Bannon are handling the sale of the South King Street investment for Lone Star. The Irish Times, 28th February
72 Grafton Street Dublin: UK clothing, homeware and fragrance business, The White Company, has won the battle of four international companies pitching for 72 Grafton Street, all of them offering close to the annual rent of €750k (€88 psf) for the Iput owned store. The White Company has a branch network of 57 stores in the UK and the US, as well as a discount facility in Kildare Village. The handover of the building later this week, on a 20-year lease comes after Iput spent c. €2m reconfiguring the block and enlarging its shopping facilities. The works involved the complete removal of five floor levels, including mezzanines, and their replacement by three open plan retail floor plates extending to 8,527 sq. ft. Iput bought the building in 2014 for €12.5m as part of a portfolio of investment properties from Bank of Ireland Staff Pension Fund. With The White Company in situ, Iput is likely to value the investment close to €20m. The Irish Times, 28th February
Longford Town Shopping Centre: Cinema chain Omniplex Cinemas has completed the purchase of the never opened Longford Town Shopping Centre for €1.2m (€16 psf). Omniplex, which has a four-screen cinema next door, will relocate to the first floor of the shopping centre and increase the number of screens from four to eight. The bottom floor of the cinema will be offered for letting to restaurants, cafes and coffee shops. In total Omniplex have acquired 73,000 sq. ft. of space as well as three levels of car parking with 344 spaces. The Irish Times, 28th February
Kilmainham Square Portfolio: Joint agents Hooke & MacDonald and Brock Delappe have brought a collection of four investments properties on the Inchicore Road in Dublin 8 to the market guiding €1.4m. The properties, for sale individually or collectively, are at the Lalco-developed Kilmainham Square scheme which is anchored by the Hilton Hotel. The portfolio includes a 2,174 sq. ft. office suite let to Persuasion Republic at €32,400 p.a. (€14.90 psf), a purpose-built crèche of c. 1,916 sq. ft. let to Safari Childcare Ltd at €25,991 p.a. (€13.56 psf), a 1,033 sq. ft. retail unit let to Lime Tree Cafe Ltd at c. €26,998 p.a. (€26 psf) and a vacant retail unit of 883 sq. ft. The Irish Times, 28th February
OFFICE
Grand Canal Quay: Bartra Capital Property Group is to partner with CIE on the development of a new high-rise office scheme at Grand Canal Quay in Dublin’s docklands. Bartra’s tender for the 0.87 acre south docks site, known as Boston Sidings, won out over competing proposals from a number of the country’s leading developers. The site was in use by CIE for many years as sidings for its train services but when it was no longer required for that purpose, CIE decided to seek a developer partner with a view to unlocking its development potential. With rents in the south docklands now c. €50 – €60 psf, agents Lisney estimated when they launched the marketing campaign last July that the site could provide CIE with more than €1m p.a. The site is located next to Grand Canal Dart station, and has frontage on to both Macken Street and Grand Canal Quay and Clanwilliam Terrace. Given its proximity to the operations of Google, Facebook, Accenture and law firm Mason Hayes & Curran, the site is likely to attract significant interest from a range of corporate occupiers once it is developed. Upon completion, the scheme is expected to accommodate up to 120,000 sq. ft. of office space. In entering into partnership with CIE, Bartra will be expected to handle the entire planning process and to build out the office scheme. Bartra’s success in securing Boston Sidings follows on from its acquisition of a number of other commercial real estate sites in Dublin including Phoenix House on Conyngham Road, St George’s Church beside Temple Street Hospital, and an industrial property in Cookstown Industrial Estate. The Irish Independent, 6th March
75 Merrion Square Dublin: Joint agents Lisney and Savills have brought a substantial Georgian building on the south side of Merrion Square to the market guiding €3.95m (€727 psf). 75 Merrion Square is a mid-terraced four storey over basement Georgian property extending to 5,432 sq. ft. with a lift servicing all floors and 12 car parking spaces to the rear. The property is let on a single 10-year lease from September 2016, at a rent of €249,760 p.a. (€46 psf). The tenant Enet, is currently in the running for a contract to implement the National Broadband Plan. The Irish Times, 28th February
Exchange Place Dublin: CBRE is seeking €2.4m (€628 psf) for 3,819 sq. ft. of high-quality floor space at 4 Exchange Place, in Dublin’s IFSC. The modern mid-terrace four-storey office building is producing an annual rental income of €141k from two tenants, showing a net return of c. 5.45%. The current tenants are Dexia, the State-owned Belgian-French banking institution, at an annual income of €103k (€34 psf) on a 10-year lease from September 2017, with a tenant break option in August 2021, and Qatar Airways via a four-year and nine-month lease from December 2017 at an annual rent of €38.5k (€39 psf). The airline has a break option at the end of November 2019. Perspective investors will be aware that both figures are below the top rents in the IFSC, currently in the region of €52 psf. The Irish Times, 28th February
South County Business Park: JLL has secured Cardinal Health as tenants for the 17,519 sq. ft. of space on the third floor of Red Oak North at South County Business Park in Dublin’s Sandyford Business District. Cardinal Health will pay c. €30 psf on a 15-year FRI lease that contains a tenant-only break clause at the end of year eight. The tenant will also have the benefit of 23 car parking spaces, at €1,500 p.a. per car space. South County Business Park is located in close proximity to the M50 and M11 motorways and the N11 and is home to a number of leading international companies such as Microsoft, Icon, Accenture, SSE Airtricity and MSD. The Irish Independent, 5th March
Navigation Square Cork: Financial services firm Clearstream will take over 70,000 sq. ft. of space plus an option of 20,000 sq. ft. more at Navigation Square on Cork city’s quays making it one of the largest-ever office deals in Cork city. The commitment of the financial services giant endorses the 350,000 sq. ft. €90m office development by O’ Callaghan Properties, which commenced before any tenant was signed up. Construction at Navigation Square commenced last autumn, with a tenant fit-out expected by year’s end following an on-schedule construction timeline with BAM, and Clearstream are to move 360 employees in by March 2019, with scope to add 200+ extra jobs. Headline rents at Navigation Square are quoted at €32.50 psf, but terms agreed with Clearstream have not been divulged. The Irish Examiner, 1st March
RESIDENTIAL / LAND
2017 Development Land Sales: Cushman & Wakefield have reported that the trend of 2017 in the development land market was increased sales activity but of smaller holdings. In total there were €575m (225 deals) of development land sales in 2017, compared to €672m (184 deals) in 2016. The sale of development land in the greater Dublin area rose by 24% to €490m from 150 deals, an average of €3.2m per deal. The most notable land transaction in Dublin last year was the €107.5m (€12.44m per acre) sale of RTÉ’s 8.64 acre Montrose campus to Cairn Homes. The sales pipeline for Dublin and its commuter counties appears strong for early 2018 with an estimated 85 sites and €215m value sale agreed at year end. In terms of Cork, Limerick and Galway, Cushman & Wakefield says the development land market in these regional centres recorded robust increases in the value of transactions during 2017. Cork saw more than 40 deals totalling c. €50m closing, up from 31 deals totalling c. €31m in 2016. Galway development land sales were more than €21m in 2017, up from €12 million in 2016 while sales in Limerick topped €10 million for the year. The Irish Times, 27th February
Cairn Homes Preliminary Results: Cairn Homes has reported revenue of €149.5m for 2017, an increase on the €40.9m recorded in 2016, according to preliminary results for the company released today. The substantial increase in revenue was driven by the sale of 418 residential units in 2017 (105 in 2016), which generated c. €131m in revenue. Last year the company saw its average selling price increase to €315k, up from €295k in the previous year. Operating profit at the company was €15m, up from €3.6m in 2016. Cairn currently owns 34 sites and is active on eleven developments, which it said will deliver c. 3,650 new homes. The company anticipates three further site commencements in 2018. The company’s development of the former RTE Montrose site is expected to commence in 2019. Net debt at the company is €159.4m, up from €76m in 2016, while the company has cash of €85.8m. Looking forward, the Stock Exchange listed company said it had a positive outlook, expecting continued significant growth in sales, profit and cash generation over the next three years. The Irish Independent, 6th March
Student Accommodation Developments: Four new student accommodation facilities are being developed in Dublin and Cork with a total of 1,325 beds by a joint venture between Harrison Street Real Estate Capital (HSRE) and Global Student Accommodation Group (GSA). The projects will bring to 3,225 the number of student beds on offer in Ireland through the international Uninest chain by 2020. Such fresh supply will also help to ease the pressure on the housing markets in both cities as it will take thousands of students out of the private rental market. GSA and HSRE launched a joint venture in 2015 to target student accommodation in Ireland and already it has c. 1,000 operational beds in Dublin with an additional 900 beds scheduled to open in Dublin for the start of the autumn 2018 academic term. GSA, the development manager, operates the properties under its Uninest Student Residences brand and works closely with local universities. In Uninest’s first entry to the Cork market, the two new residences will include a 190-bed development close to the entrance of UCC, which will open in September this year. The second is a 413-bed residence on the former Beamish Brewery site at South Main Street and will open in 2020. In Dublin, the two new residences will be a 402-bed development adjacent to DIT’s Grangegorman campus, just off the North Circular Road; and a 320-bed development on Dominick Street Upper. Both will open in time for the 2019 academic year. Each new Uninest residence will feature community and student-centred facilities including laundry, gym and games rooms to meet modern students’ demands. The Sunday Business Post, 4th March
Foxrock Site Dublin: Agent QRE is guiding €2.85m (€142k per unit) for a 0.61 acre development site with planning permission for 20 apartments in Foxrock, Co. Dublin. The scheme will have 16 substantial two-bed apartments, each with a floor area of 915 sq. ft., and four three-bed duplex units extending to 1,195 sq. ft. All were designed to be tri-aspect with private open space to the front and rear. The apartment site adjoins Loreto Foxrock secondary school and is within walking distance of Cabinteely, Deansgrange and Foxrock village. QRE expect significant demand for the high-end residential units and expect the development to be particularly popular among downsizers. The Irish Times, 28th February
St. Joseph’s House Waterford: Joint agents QRE and Hutchinson Auctioneers in Waterford have brought a 19th century 54,000 sq. ft. building and adjoining lands to the market guiding €3m. Set on 5.5 acres in a good Waterford city location and within 2.5km of the main WIT campus, the offering is open for a variety of new uses and development, subject to planning permission. The protected structure has recently been in use as an education facility for Waterford Educate Together and possible future uses allowed under its zoning include nursing home, student accommodation, and residential and education uses. The Irish Examiner, 1st March
Shandon Park Blackrock: A 0.41-acre residential site at Shandon Park in Blackrock, south county Dublin, with planning permission for six houses, has been sold for €2.4m (€400k per site). The price paid represents a premium of 23% above the €1.85m reserve set by agent Cushman & Wakefield when the property was offered for auction last week. The site at Shandon Park is just 1km south of Blackrock village, 1km west of Monkstown village and 10km south of Dublin city. The planning permission provides for the development of four four-bedroom, 2.5 storey, terrace dwellings extending to 1,523 sq. ft.; two four-bedroom, 2.5 storey, semi-detached dwellings extending to 1,722 sq. ft.; and one four-bedroom, two-storey, detached dwelling, extending to 2,104 sq. ft. While there is planning permission for seven houses across the entire site, one of the sites was not included in the sale. The Irish Independent, 5th March
HOTEL
Walter Raleigh Hotel Youghal: CBRE are guiding €2.5m for the 18th century Georgian Walter Raleigh Boutique Hotel in Youghal, East Cork. The 40-bedroom four-star hotel is located at the start of Ireland’s Ancient East and in close proximity to Youghal’s seven kilometre blue flag beach. The hotel which was previously sold for c. €400k in 2013, has been extensively refurbished to four-star standards in recent years and is trading very well, is expected to exceed the guide price. The Irish Examiner, 1st March
INDUSTRIAL
Malahide Industrial Estate: Industrial agent William Harvey has brought a detached industrial unit on a gated and fenced site of c. 1.28 acres in Greencastle Parade in Malahide Industrial Park to the market either for sale or to let. Unit 2A and B Greencastle Parade extends to c. 33,000 sq. ft. and includes 3,229 sq. ft. of office space and staff facilities. The buildings offers great redevelopment potential, subject to planning permission. The agent is seeking a sale price in the region of €1.5m (€45 psf) or to let on a medium to long-term lease at a quoting rent of €125k p.a. (€3.78 psf). The Sunday Business Post, 4th March
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