6th September (Issue 363)
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.
OFFICE
Sandyford, Dublin 18 Having only recently secured Cubic Telecom as tenant for c. 40% of the office space at the Hive in Sandyford, Dublin, US investor Colony Capital has placed the property on the market with agent HWBC at a guide price of €34.4m. Located 500m from the Luas Green line stop at Sandyford, the subject property briefly comprises 70,000 sq. ft. of office accommodation distributed across four floors. The Hive’s tenant base currently includes Cubic Telecom who have agreed to occupy 30,000 sq. ft. and NTR Plc which has agreed to occupy 10,000 sq. ft. for use as its new headquarters. Additional space at the Hive is currently under offer to an as-yet unidentified party for use as their respective headquarters. The Irish Times, 31st August
For lending terms on this asset please contact rossmetcalfe@origincapital.ie
Citywest Campus, Dublin Having developed and let c. 220,000 sq. ft. of offices at the Waterside in Dublin’s Citywest Business Campus between 2009 and 2016, Iput and Davy Real Estate have decided to cash in on their respective interests in the scheme. The portfolio, which is guiding at a price of €71.5m through Savills, offers the prospective purchaser a NIY of 7.3% along with the opportunity to develop a further 180,100 sq. ft. of grade A office space. The Waterside scheme currently comprises a total of 219,281 sq. ft. of offices arranged across five blocks, with 973 car parking spaces at basement and surface level. The portfolio is currently 92% occupied and has a WAULT to break and expiry of four years and 10 years respectively. The tenant mix, which includes SAP, Fidelity, Glanbia and Astellas Pharma, is producing a rent roll of c. €5.75m pa, with 82% of this annual income coming from SAP and Fidelity. The Irish Times, 31st August
For lending terms on this asset please contact rossmetcalfe@origincapital.ie
Dublin City Centre Citigroup is poised to finalise a €100m deal for its new European headquarters in Dublin. The US banking giant has been searching for a 300,000 sq. ft. office in the Dublin Docklands in the past few months, tapping Knight Frank to lead the hunt. Citi has selected a site jointly owned by Ronan Group and Fortress Investment Group for the new headquarters. The bank has the right of first refusal on an additional 130,000 sq. ft. on the same site, should it want to expand. The new site is larger by c. 33% than Citi’s current 230,000 sq. ft. Dublin office at 1 North Wall Quay, which is now on the market for €120m. React News, 6th September
Chancery Lane, Dublin City Centre A prime Dublin city centre office block bought in 2017 for €23.8m from Hibernia Reit has seen its value cut to €22.2m by its current owners. The purchaser – a fund controlled by Credit Suisse – also incurred c. €1m in fees buying the building at 3-10 Chancery Lane in the capital. The acquisition was backed with a €15.4m loan from AIB (2.45% fixed interest rate) which matures in December this year. It features 35,000 sq. ft. of offices and four two-bedroom apartments. The purchase in 2017 reflected a blended initial yield of 5.9% and a capital value of €645 per sq. ft., according to Hibernia Reit at the time. The building’s commercial occupiers include the Office of the Attorney General, tech firm Analytic Partners and others. Accounts published in Luxembourg for the company that bought the building in 2017 show that at the end of 2021, the property was 100% rented and the offices were generating total annual income of €1.4m last year. The apartments are generating rents of just under €72k a year, compared with just over €90k in 2020. The Irish Independent, 6th September
RETAIL
Grafton Street, Dublin City Centre Ecco is to set up shop in the former premises of Carphone Warehouse. The deal will see the retailer occupy the ground floor and basement of No. 30 Grafton Street by way of a sub-lease for the remainder of Carphone Warehouse’s lease agreement which expires in 2028. According to market sources, Ecco has agreed to pay a rent of c. €260k pa for the 1,600 sq. ft. space. The upper floors of No. 30 have been sub-let separately. Although Ecco’s new rent is c. €50k more than the €210k it had been paying for its original Grafton Street shop, its new premises are larger. The payment agreed for No. 30 is also less than the sum Ecco claimed Irish Life had been seeking as part of the rent review for its former premises in 2020. The Irish Times, 31st August
O’Connell Street, Dublin 1 Savills has been instructed to sell a retail/healthcare investment located next door to the Clerys Quarter on O’Connell Street in Dublin 1 for €3.5m. The entire property is leased to Xenon Dental Services trading as Smiles Dental. It is held on a 35-year FRI lease from April 26th, 2006 subject to an upward only passing rent of €160k pa exclusive and no break clause. The entire property extends to 4,666 sq. ft. and comprises a mid-terrace five-storey over basement Edwardian building providing dental service accommodation at ground level with offices and ancillary accommodation overhead and at basement level. The Business Post, 2nd September
Henry Street, Dublin 1 Holland & Barrett, one of Europe’s largest health and wellness retailers, has invested €5m over the past 12 months on new store openings, relocations and refits across Ireland. The retailer is preparing to open a new flagship store on Henry Street. The new Henry Street flagship store will offer a range of health foods, vitamins and supplements, sports nutrition and natural beauty products. The Irish Independent, 4th September
St Patrick Street, Cork The new 5,000 sq. ft. Eason store is due to open next week at 35-36 St Patrick Street. With The North Face and Dune secured, Eason almost ready to go, and building facades restored, an entire block of St Patrick Street — where No. 37 is occupied by jewellery store Pandora — now looks to have a much more secure future, with all the ground-floor units filled or with a commitment to be filled. The North Face deal signed just this week will see retail on the ground and first floors of No. 39, with storage and offices on the second floor, while the third floor will be unused in the short term. Annual rent is at a level less than the €275k pa originally quoted. Meanwhile fashion retailer Flannel, part of the UK-based Fraser Group, is set to move into the old Eason store, a 22,000 sq. ft. property bought in 2020 by Sports Direct International/House of Fraser owner Mike Ashley, for a reported €6.5m. The Irish Examiner, 1st September
HOSPITALITY
Howth, Co Dublin After four generations of being owned and operated by the Tobin family, the landmark Abbey Tavern in the seaside village of Howth, Co Dublin, is being offered to the market at a guide price of €1.75m by Bagnall Doyle MacMahon. The subject property is part two-storey/part three-storey interconnecting traditional stone-clad buildings, extends to a total area of 8,374 sq. ft., and comprises a traditional bar, restaurant and entertainment venue. The Irish Times, 31st August
Dalata, Ireland Dalata has “no interest” in buying older hotels as it continues its expansion plans, the company has said. The firm’s portfolio, which operates under the Maldron and Clayton brands, currently comprises 49 hotels with 10,650 rooms and a pipeline of over 1,400 bedrooms. Announcing interim results last week, the group reported profit before tax of €52m for the first half of 2022, up from €37.8m from the corresponding period in 2019, before the company’s performance was badly affected by the Covid-19 pandemic. Revenue for the first six months to 30th June 2022 was €220.2m, up from €201.9m in the same period in 2019. The company said it was operating at 69.8% occupancy for the first half of this year. The group’s average room rate was €126.90 for the period. The Business Post, 3rd September
O’Connell Street, Dublin 1 Whitbread plc, the owner of the Premier Inn chain of hotels, has purchased the hotel site at the back of Clerys on O’Connell Street in Dublin for €20m. The off-market deal is thought to be one of the most expensive hotel site sales in the capital since before the pandemic. The plot, which is owned by Europa Capital, Derek McGrath’s Core Capital and Paddy McKillen Jr’s Oakmount, has been given planning permission for a 213-bedroom, seven-storey hotel. The Sunday Times, 4th September
Ring of Kerry The Singaporean owners of five-star hotel Sheen Falls Lodge in Co Kerry, Dr. Stanley Quek and Peng Loh, have acquired the Ring of Kerry Golf Club. According to the owners, the price paid was in the single digits, and less than €5m. The course was not placed on the open market, and it is understood it was offered for sale to the Sheen Falls owners, who last year acquired Castlemartyr Resort in Cork for €20m. Located above Kenmare Bay, the Ring of Kerry Golf Club is set in 121.5 acres. The Irish Independent, 4th September
INDUSTRIAL / LOGISTICS
Mervue Business and Technology Park, Galway French investor Corum Asset Management has purchased units 20-29 at Mervue Business & Technology Park in Galway for €19.4m. The Galway property acquired by Corum extends across a total area of 160,000 sq. ft. on a site of 7.09 acres and comprises one manufacturing unit leased to HID Global Ireland Teoranta and one office unit, leased to Avaya International Sales Limited. The HID premises underwent an extensive modification/rebuild programme in 2020/2021, while the Avaya premises saw recent capital expenditure of $1.7m. HID, whose lease commenced in November 2019, took possession of the property in the final quarter of 2021, following practical completion of the first phases of the works. It signed up to a 25-year-lease, with a tenant-break option in 2034, equating to a conservative €8.00 per sq. ft. Avaya’s lease, meanwhile, is set to run for a further four years and four months, with a rent review in December this year. This is expected to see a strong reversionary rent being realised, given the building’s current level of just €11.57 per sq. ft. The Irish Times, 31st August
Newbridge, Co Kildare Jordan Auctioneers has brought to the letting market a large, detached distribution/warehouse facility extending to 25,112 sq. ft. on an exclusive site extending to 2.17 acres on the Athgarvan Road in Newbridge, Co Kildare. The property, formerly Cox’s Cash & Carry unit, occupies a high-profile location adjoining Newbridge town centre. Internally, the property mainly provides open plan warehouse space. A tarmac surfaced yard at the front and rear of the building provides for 50 car parking spaces. The property is to let with Jordan’s, quoting €200k pa. The Business Post, 2nd September
STUDENT ACCOMMODATION
Student Accommodation Supply, Ireland The supply of new student accommodation is slowing down just as an increased number of students wait for college offers this year, according to Cushman & Wakefield. Just 600 bed spaces will be built this year, the estate agents say. That’s less than half the 1,350 built last year and just over a quarter of the rooms made available in 2018 and 2019. The total stock of purpose-built student accommodation in Dublin as of June this year was 18,700 bed spaces. That is expected to rise just 3% this year, 1% next year and 4% in 2024. This compares with increases of 14-20% between 2017 and 2019 the estate agents said. While there are c. 10,000 bed spaces in the pipeline, just 6,700 units have planning permission granted. The Irish Times, 4th September
RESIDENTIAL / DEVELOPMENT
Ringsend, Dublin 4 A school principal of a primary girls’ school in Ringsend, Dublin 4 has raised child protection concerns over a seven-storey build-to-rent scheme for seniors adjacent to the school. A statement lodged by the applicant’s planning consultants, Tom Phillips & Associates, said that the Glencarra Ringsend Ltd scheme would provide accommodation for 30 professionally managed social homes for senior citizens on Dublin City Council’s housing list. The Irish Times, 1st September
Portlaoise, Co Laois Jordan Auctioneers has just released to the market development land on the Dublin Road in Portlaoise, Co Laois, which is zoned ‘New Residential’ and is likely to draw strong interest from local developers and investors. The plot of land extends to c. 13.25 acres. The auctioneer is quoting a figure of c. €2.85m (€215k per acre). A pre-connection response from Irish Water (June 2021) indicates capacity for the development of the lands. The property is zoned ‘Residential 2’ – New Proposed Residential in the Portlaoise Local Area Plan 2018-2024. Tenders are to be submitted Friday, October 14th. The Business Post, 2nd September
Raheny, Dublin 5 German investor DWS has exchanged contracts to buy a residential scheme in Dublin from Earlsfort Group for one of its institutional real estate funds. The development, dubbed Station Road, is near Raheny Dart Station and Dublin city centre. It will create 105 modern and affordable homes with a total lettable area of c. 75,300 sq. ft., including 51 one-bed flats and 54 two-bed flats, all of which will have balconies. There will also be 55 partially electrified underground parking spaces, which can be fully converted later. Station Road is scheduled to complete by the end of 2024. React News, 1st September
Raheny, Dublin 5 Pat Crean’s Marlet Group is looking to build 580 houses and a nursing home in Raheny, North Dublin. The plans envisage 580 apartments and a 100-bed nursing home on a 16.5-acre site to the east of St Paul’s College at Sybil Hill in Raheny, Dublin 5. The project consists of 272 one-bed units, 15 two-bed, three-person units, 233 two-bed, four-person units and 60 three-bed units. It will also include 520 car-parking spaces and 1,574 bicycle spaces. The 100-bed nursing home will be a four-storey building set against a courtyard, with a further 7.16 acres set aside as open space. Last year the high court rejected Marlet’s plans for 657 homes on the site. The latest proposal would come under the new Large Scale Residential Development (LSRD) scheme. React News, 6th September
OTHER
Sewage Plant, Greater Dublin Area An Bord Pleanála’s decision on a €500m regional sewage plant, described by Irish Water as “vital” to the development of Dublin, will be delayed into next year, two years after the High Court ordered the board to issue a new ruling on the facility. The board has effectively reopened the case despite being told by the courts that it was due to its planning error, and no fault of Irish Water, that the original planning permission had to be quashed. The board has asked Irish Water to resubmit significant parts of its application for the Clonshaugh wastewater treatment plant by the end of February 2023 due to “the passage of time” since the original application was submitted. The plant, at a site east of Dublin Airport, has been designed to treat the waste of 500k people across the Greater Dublin Area. The Irish Times, 3rd September
Abbotstown, North Co Dublin Sport Ireland is to make the National Indoor Athletics Training Centre at Abbotstown in north Co Dublin available for use as emergency housing for refugees. The Athletics Training Centre, part of the National Indoor Arena, is State-owned and contains permanent shower and recreational facilities. Sport Ireland said the Blanchardstown training centre would be used for six weeks, during which time there would be some disruption to sporting bodies scheduled to use the facility. The decision to hand over the centre came after a request from the Government. The Irish Times, 2nd September
Newbridge and Rathangan, Co Kildare Local residents have raised concerns about plans for two sets of modular homes in Co Kildare for Ukrainians fleeing the war. Locations in Dublin, Cork, Kildare and Cavan were selected in July for an initial tranche of modular homes for housing refugees. A total of 60 emergency housing units have been proposed for Newbridge and Rathangan. Many of the c. 50k arrivals from Ukraine have been housed in hotels or emergency facilities identified by local authorities, and a priority now is to deliver longer-term solutions such as modular homes. 5k beds in student accommodation are due to be returned when third-level institutions need them back. Under existing plans, it is envisaged that up to 200 units will be delivered over November and December this year, with 300 more by the end of February 2023. The Irish Times, 1st September
Tullamore, Co Offaly A project to upgrade the centre of an Irish town is set to go over budget by at least €1.4m. The public enhancement works in Tullamore in Co Offaly included a new 17m long pedestrian footbridge over the Tullamore River, street paving and the undergrounding of telephone and electrical cables. It was due to cost €3.2m but it is now going to cost at least €1.4m more, bringing the final cost to an estimated €4.6m. The work started in November 2019 and was completed in July 2020. The extra costs were caused by an increase in the scope of the project and the cost of dealing with “unforeseen conditions and requirements”, according to a new report by the local government audit service. The Business Post, 3rd September
Forward Funding Model, Ireland In Ireland, investment funds have typically entered “forward purchase” agreements with developers to buy residential developments upon completion. New data from Sherry FitzGerald has shown a different “forward funding” model has become more prevalent, which involves institutional funds bankrolling the construction of housing. In 2021, large property funds invested more than €1.7bn in Ireland’s residential sector, according to Sherry FitzGerald. Of this c. €1.3bn was invested through forward funding agreements to pay for the development of residential schemes. Last year, a memo compiled by Department of Finance officials, said that if institutional investors were “forward funding” residential development, they could avoid stamp duty charges on residential blocks because the property never technically changes hands. To discourage institutional funds from bulk purchasing houses, a new stamp duty rate of 10% was introduced for any fund that bought more than ten houses in a 12-month period. The document added that under a different “forward purchase” agreement, whereby an institutional landlord commits to buying a development but doesn’t fund its construction, stamp duty is charged on that sale. The Business Post, 3rd September
Midleton, Cork The company behind Jameson and Powers has announced a €250m investment in a new distillery on a 55-acre site adjacent to its Midleton, Co Cork, facility. Once fully operational in 2025, the site will distil pot still and grain whiskey with grain intake, incorporating brewing, fermentation, and distillation facilities. The Pernod Ricard-owned drinks-maker said it will submit a planning application to Cork County Council by the end of the year with construction due to start in 2023 subject to approval. The Irish Times, 5th September
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