7th December (Issue 326)
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
Tralee, Co Kerry Developer Pat Crean’s Marlet Property Group looks set to acquire Manor West Shopping park in Tralee, Co Kerry for €56m. Although the proposed purchase has yet to be completed, it will be seen as a significant vote of confidence in regional retail parks and their resilience, both in the face of the Covid-19 pandemic and the ongoing growth of online shopping. Manor West for its part comes fully occupied by a strong selection of international and Irish retailers. The Tralee scheme is anchored by Harvey Norman and Woodies DIY, with a lease guarantee from the company’s owner Grafton Group. Other notable tenants include Tesco, TK Maxx, Next, Homestore & More, Smyths, Currys PC World, Petmania and Halfords. The park is 100% occupied, with Danish home group JYSK and pet shop Maxi Zoo two of the more recent tenants. Manor West’s total current rent receivable is €5,342,460 per annum and the weighted average unexpired lease term (WAULT) is 6.3 years to break options and 7.2 years to expiry. Tesco, The Range, Woodies, Harvey Norman, Tk Maxx and Smyths Toys account for a combined 57% of the scheme’s overall rental income. At 349,403 sq. ft., the park sits on a site area of c. 29 acres, with in excess of 1,000 surface car parking spaces. The Irish Times, 1st December
INDUSTRIAL
Clonee, Co Meath Supply chain specialists Primeline Logistics have signed up for more than 110,000 sq. ft. of space at the Hub Logistics park in Clonee. The deal is the first letting within phase two of the scheme and will see Primeline occupy Unit A02 on a long-term lease with five-yearly rent reviews. The company has agreed to pay an annual headline rent of €10.35 per sq. ft. Primeline’s new facility at the Hub Logistics Park comprises 111,300 sq. ft. including 7,115 sq. ft. two-storey offices. The property includes a 13m clear internal height, an FM1 jointless floor, 10 dock levellers and a 50m deep service yard with dual access which provides 50 truck parking spaces. The property has an A2 BER rating. The Irish Times, 1st December
Core Industrial Properties, Ireland Private equity group KKR has concluded a deal to buy a large portfolio of industrial assets in Ireland for over €200m. KKR is buying Core Industrial Properties Irish platform, which includes 144 assets and a significant landbank for future development. Investment manager Palm Capital is working with KKR on the acquisition, which is one of the largest ever industrial sales in the country. Over 90% of the portfolio, which includes 114-assets in 24 locations, is in the wider Dublin area. Core’s platform has 1.3m sq. ft. of standing stock and a land bank of 123 acres, of which 36 acres is already zoned for future development. The existing assets are fully leased. It includes properties in Rathcoole, Clondalkin and Finglas. The largest single asset is Naas Enterprise Park, a 125-acre scheme in Kildare. KKR secured the portfolio in the face of competition from Northwood, M7 Real Estate, and Arrow Capital Partners. CBRE and Eastdil Secured advised Core Industrial. KKR has already teamed up with Palm Capital’s logistics real estate arm to fund an €85m development in Dublin. The partners forward funded the development of two logistics warehouses at Greenogue Business Park, delivering a 450,000 sq. ft. scheme. React News, 6th December
MIXED USE
Finglas, Dublin 11 Quinn Agnew has launched a suburban mixed-use investment in Finglas for sale by private treaty seeking offers in excess of €1.2m. Gofton Court is a retail and office development situated on Jamestown Road opposite the Finglas Village Shopping Centre. Gofton Court extends to c. 5,920 sq. ft. comprising retail with offices overhead. Occupiers include Gas Junction, Pretty Woman, Dream Hair, Joseph G Byrne & Sons and Calzature. The vacant office is available for letting and extends to c. 1,800 sq. ft. Recent lettings in the area range between c. €18 and €22 per sq. ft. The current income is c. €92k per annum, but the property has reversionary potential to c. €150k following re-letting and completion of upcoming lease renewals. The Business Post, 5th December
Online Auction, Ireland Several agents have lined up properties which they aim to sell before the year end and have opted for online auction platforms to speed up the process. The largest of these catalogues is BidX1’s with 110 properties at a combined value of c. €27m which will be auctioned on December 10th. Other agents are using online platforms such as IAM Sold and Offr while O’Donnellan & Joyce is holding its own auction, also on December 10th. One of the more valuable BidX1 lots is 7/8 Winthrop Street, a Cork city centre retail investment which is guiding €1.6m, a sharp drop on the €2.1m that was quoted in 2018 but at that time it was generating rent from part of the property that has since been vacated. Now its sole tenant is the Boojum restaurant chain, whose current rent reserved is €130k. This would equate to a net initial yield of 7.38%. It occupies ground and part first floor space. While the total property extends to 4,122 sq. ft., the first and second floors of 8 Winthrop and the second floor of 7 Winthrop are vacant. The most valuable lot in the auction is a portfolio of 1,400 acres of forestry with a €3.95m guide.
The most valuable lot in IAM Sold’s auction on December 16 is a portfolio of six apartments at 6-11 Villa Springs, Nephin Road, Dublin 7, which is guiding over €1.45m. The apartments are in a two-storey building which has its own site on this development of two apartment blocks. Five of the apartments have not been rented over the past two years and, therefore, market rent can be charged. The sixth unit is currently rented at €20.4k per annum, and the portfolio will be sold with vacant possession. The Business Post, 5th December
HOSPITALITY
Gardiner Row, Dublin 1 Cassidy Hotel Group has acquired Barry’s Hotel in Dublin city centre for c. €8m. The sale of the Great Denmark Street landmark is understood to have delivered a significant return for its vendor, a private investor. The hotel was last sold in 2013 for c. €1m. Built originally at Lord Tullamore’s Townhouse in 1780, the property was converted into a hotel in 1889, and has continued to trade as one ever since. While the townhouse premises has 33 guestrooms currently, there is existing planning permission to develop a 32-room extension to the rear of the property. The Cassidy Hotel Group was advised on the purchase of Barry’s Hotel by CBRE, while JLL advised the vendor. The Irish Times, 1st December
Galway City Centre Galway nightclubs Electric Garden and Halo could come for sale with agents TWM and Cushman & Wakefield expecting it to guide a price between €3.5m and €5m. A multi-purpose venue, the premises comprises a bar, restaurant, arcade and club. Electric Garden and Halo sit on a large central Galway site extending to 0.5 acres and comprises a floor area of 43,572 sq. ft. over several levels. It has significant frontage to Abbeygate Street Upper. These buildings also include retail and apartment accommodation. The property has been developed over the years and extended into the large regular-shaped rear site with significant two- and three-storey structures, constructed to form two open-plan nightclubs, beer gardens, a restaurant and covered outside areas together with ancillary service accommodation that includes storage, toilets, cold rooms and office space. The property has development potential given its location within Galway city centre. The location and zoning could suit retail, hotel, office residential or student accommodation subject to planning permission. It could also be developed in conjunction with the extensive An Post property that is now on the market. The combined properties would be one of the largest city centre sites to become available in Galway in recent years. The An Post site is zoned city centre under the Galway City Development Plan. The Irish Times, 1st December
OFFICE
Sorting Office, South Dublin Docklands Having agreed terms to lease the entire 202,000 sq. ft. property earlier this year, TikTok is said by market sources to have formally signed the deal with the building’s owners, Mapletree Investments, last weekend. The Chinese headquartered social media giant has agreed to occupy the property on the basis of a 15-year lease with 10 years’ term-certain and a rent-free period of c. 18 months. The rental level agreed for the office scheme is understood to be between €55 and €60 per sq. ft. While the completion of the Sorting Office deal provides a significant boost for the Dublin office market as it approaches year-end, it represents just the first step in TikTok’s medium to long-term plan to grow its workforce here to 5,000. Having secured sufficient space to accommodate c. 2,000 of those personnel at the Sorting Office, the company has moved to the next stage of its office search in Dublin’s docklands. The Marlet Property Group’s 177,000 sq. ft. shipping office scheme on Sir John Rogerson’s Quay and Bartra’s 200,000 sq. ft. Boston Sidings development at Grand Canal Quay are understood to be two of the locations up for consideration. The Irish Times, 1st December
RESIDENTIAL / DEVELOPMENT
Sallins Road, Naas Agent Jordan Auctioneers is handling the sale of a 3.24-acre site in a central, sought-after location on the Sallins Road only c. half a mile from Poplar Square in Naas town centre. The agent is guiding €2.25m for it. The plot of land is zoned “New Residential” under the New Naas Local Area Plan 2021-2027 and the allowable density for the site under that plan is 14 to 20 units per acre. The Business Post, 5th December
Social Housing, Ireland Dublin City Council (DCC) estimates it will build 642 less social housing units by 2026 compared to targets set out by the Department of Housing last month. The local authority projects a total of 9,910 homes will be delivered over the next five years, 642 less than the Department’s target of 10,552. Of those, 8,445 homes will be built through a mix of direct-build (6,945) and Part V delivery (1,500). Part V is a mechanism which allows local authorities to obtain 10% of land zoned for housing to deliver social and affordable units. A further 1,465 social homes are to be delivered through long-term leasing agreements. Under its Housing for All plan, the Government wants to end the practice of long-term leasing by focusing on new-builds to provide social housing. DCC estimates 480 social homes will be delivered through long-term leasing next year, 475 in 2023, 410 in 2024 and 100 in 2025. The Department last month set out targets for the construction of more than 47,000 social units by 2026. Under Housing for All plan, an average of 9,500 new social homes are to be provided annually state-wide. 20% of the 47,600 social homes due to be delivered by 2026 are designated for Dublin City. The other three Dublin local authorities are between them expected to deliver another 18% of the national total. The Business Post, 6th December
Clonburris, Southwest Dublin Cairn Homes has lodged a planning application for 569 homes at Clonburris in southwest Dublin. 280 hectares of former farmland, 10km from the city centre, has been designated by the Government as a strategic development zone (SDZ), and South Dublin County Council has plans for a new town with c. 9,000 homes. Planning permission was recently granted for critical infrastructure in the area, including the construction of 4km of roads, bus corridors, cycle lands and pedestrian routes, which is expected to start in early 2022. The application by Cairn is the first planning application for housing in the location. The company said the initial phase would contain 569 homes out of planned total of 9,000 “making the exciting new suburb of Clonburris of comparative scale to large towns such as Naas and Navan.” The application incorporates 173 houses, 148 duplex homes and 248 apartments, a creche, two local parks and children’s play areas, together with a green link alongside Fonthill Road. Cairn paid €21.7m for 97 acres in Clonburris when it bought it from the State’s National Asset Management Agency and O’Callaghan Properties in 2019. The company already owned 174 acres in the area. The company said it planned to develop a total of 5,000 of the 9,000 new homes planned for the area as well as commercial and retail space within “a dedicated urban core”, local parks and a linear park along the canal. The Irish Times, 3rd December
OTHER
AIB Non-Performing Loans, Ireland AIB Group has a €750m commercial property loan book which it plans to sell in the first half of 2022. The portfolio is understood to comprise loans issued before the domestic property crash more than 10 years ago, which are likely to be sold at a discount to their par value. The planned offloading follows the Irish bank’s sale of a €500m loan portfolio to Ellington Financial and Morgan Stanley, dubbed Project Bay, in October. AIB is one of the three remaining banks in the Irish market that has been actively selling non-performing loans this year in preparation for a potential rise in pandemic-triggered defaults in 2022. Recently Bank of Ireland announced plans to sell a residential non-performing portfolio valued between €300m to €500m next year. React News, 3rd December
Yew Grove Reit, Ireland Property investor Quanta Capital has decided against making a bid for Yew Grove, having said last month it was assessing putting in an offer to upset a planned takeover of the Dublin-listed owner of office and industrial assets by a Canadian group. Quanta owns 4.5% of Yew Grove through an investment vehicle called Goldstein Property ICAV, where Davy is investment manager. Slate Office’s bid values the Euronext Dublin-listed real estate company at €177m, including its €49.5m debt pile. Yew Grove issued a stock exchange announcement late on Friday afternoon saying that Quanta had notified the Irish Takeover Panel that it does not intend to make an offer for Yew Grove. The Irish Times, 3rd December
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