7th August (Issue 158)

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.




Project Glas: Permanent TSB has reduced its non-performing loans by 9%  to c. 16% of its total loan book following the sale of Project Glas to Lone Star Funds for €1.3bn. Project Glas, which has a par value of c. €2.1bn, comprises loans linked to about 10,700 properties with an average value of c. €175k. PTSB originally proposed to include loans with a balance sheet value of €3.7bn in Project Glas but, after a political backlash, it abandoned the sale of 4,300 residential restructured mortgages. The loan book will be managed by Start Mortgages, a subsidiary of Lone Star. The Times, Irish Edition, 1st August



Hilton Hotel, Dublin Airport: Canadian hospitality group Westmont has completed the purchase of the Hilton Hotel at Dublin Airport for c. €22.5m (€135k per key). The Westmont Group is one of the largest franchisees and co-owners of IHG and Hilton Hotels worldwide and this acquisition marks their first venture into the Irish market. The four-star hotel includes 166-bedrooms, a bar and restaurant, a business centre, a fitness centre and large car park. The Sunday Business Post, 5th August

Fitzwilliam Hotel, Dublin: Dublin City Council has granted planning permission for 50 additional bedrooms on the upper floors ofthe five-star Fitzwilliam Hotel on St. Stephen’s Green. Owner Michael Holland plans to invest c. €20m in total on the expansion of the luxury hotel and also in The Fitzwilliam Hotel in Belfast. Construction work is expected to commence at the end of 2018. The Sunday Independent, 5th August



Smithfield, Dublin: Agent CBRE has brought a fully-occupied mixed-use property at the heart of Smithfield in Dublin city centre to the market guiding €4.75m (€283 psf). The building comprises of two storeys above ground with a double basement underneath extending to 16,757 sq. ft. in total and is currently producing a rent of €327,240 p.a. (€19.50 psf) from two tenants on long-term leases. Based on its €4.75m guide price, the property offers the prospective purchaser a net initial yield of 6.35% with long-term income of over 14 years. The Irish Independent, 2nd August

Dublin Office Market Update Q2 2018: Lisney has reported that 896,000 sq. ft. of office space was taken up in Dublin in Q2, marginally lower than the previous quarter (-3%) and 22% lower YoY. The city centre region was the most active, accounting for 85% of the activity, while the south (10%), west (4.6%) and north (0.4%) suburban regions made up the remainder. US businesses dominated and were involved in 56% of all space transacted while the IT sector was again the most active sector, accounting for 38% of all space transacted (335,000 sq. ft. spread across 14 deals). The largest tech deals were at Boland’s Quay, where Google purchased two buildings in May. These are currently under construction and extend to 108,000 sq. ft. and 91,000 sq. ft. respectively. The headline vacancy rate across Dublin remained below 10% at the end of June. Lisney Press Publication, 2nd August

Grand Canal Quay, Dublin: Google has moved to increase its footprint in Dublin’s Docklands after entering into a long-term agreement with businessman Denis O’Brien to rent six floors at his office block at Grand Canal Quay. Google is also close to completing the purchase of the Treasury Building on nearby Grand Canal Street for a figure in excess of €115m. The two transactions come just over two months on from Google’s completion of a €300m deal to acquire the entire Boland’s Quay scheme. The Sunday Independent, 5th August



Griffith Avenue, Dublin: Cairn Homes is advancing plans for c. 350 apartments on a prime 7.5 acre site at Griffith Avenue in north Dublin, after consultations with An Bord Pleanála received positive feedback last week.The company is expected to shortly lodge detailed plans for the development, using the Strategic Housing Development Planning scheme. The Times, Irish Edition, 5th August



Dublin Commercial Property Market: A report released by the National Treasury Management Agency (NTMA) has raised concerns that the impact on tech multinationals on the Dublin commercial property market significantly outweighs that in other European and international capitals. The report found that the top five tech companies accounted for a much higher footprint in Dublin (4.9%) than in London (1.1%) or New York (0.7%). According to the report, Google, Microsoft, Amazon and Facebook accounted for six of the top ten office deals in 2017, and this looks set to continue in 2018. The figures in the report suggest a potentially harmful reliance on one sector of the economy, and the impact an adverse performance in that sector might have on another sector, in this instance, commercial property. The Sunday Business Post, 5th August

Construction Costs Report: New figures released from the Soceity of Chartered Surveyors Ireland (SCSI) show that construction costs will surpass 2006 levels this year and are rapidly approaching the highest levels of the Celtic Tiger bubble. Higher wages, plus steel and timber costs are driving up the price contractors are seeking to pitch for projects, the SCSI found. The SCSI Tender Price Index tracks the bid levels when construction firms pitch for contracts and the latest quarterly update today shows that prices increased by 3.95% in the first half of 2018. The forecasted annual increase for 2018 will be 7.4%. The index shows prices in the first half of 2018 rising fastest in Dublin and the rest of Leinster, but increases were common across all of the regions. The Irish Independent, 7th August


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