7th November (Issue 422)
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
Ballsbridge, Dublin 4 Blackstone has started a process to bring debt finance into its €400m Facebook campus in Dublin. The private equity house is understood to be searching for up to €250m of debt, sources said, with JLL instructed to scout out potential lenders. Blackstone bought Facebook’s new European headquarters in Ballsbridge, Dublin 4, for one of its core-plus vehicles at the end of 2021. The four blocks, totalling close to 350,000 sq. ft, are fully let to Facebook owner Meta for 15 years. The properties were sold to Blackstone by the Serpentine consortium, a syndicate of private individuals and companies assembled by AIB Private Banking and Goodbody Stockbrokers. React News, 2nd November
WeWork has filed for bankruptcy as the SoftBank Group-backed company struggles with a massive debt pile and hefty losses. Shares of the flexible workspace provider have fallen approx. 96% this year. The company had net long-term debt of $2.9bn at the end of June and more than $13bn in long-term leases, at a time when rising borrowing costs are hurting the commercial property sector. WeWork is one of the biggest office tenants in Dublin, occupies space at the 2 Dublin Landings building in the docklands as well as on Harcourt Road and the Charlemont Exchange near the Grand Canal. As recently as September, the company said it remained on course to occupy most of the former Central Bank of Ireland building in Dublin, even as it was seeking to renegotiate nearly all of its leases around the world and leave some buildings it currently occupies. The Irish Times, 7th November
St Stephen’s Green, Dublin 2 Abbey Capital is making the move from its base next to Dublin’s Rotunda Hospital to a new statement headquarters on the south side of the city. With its long-standing offices at Cavendish Row now on the market at a guide price of €4.2m, the company is relocating to no. 8 St Stephen’s Green after acquiring the property in September. Abbey Capital bought the home of the former Hibernian United Services Club for €16m. The price paid represented a discount of just over 25% on the €20m Cushman & Wakefield had been guiding when it first offered the property for sale last year. The Irish Times, 1st November
Lower Bridge Street, Dublin 8 Finnegan Menton is quoting a price of €3.2m for No. 1 City Gate on Lower Bridge Street in Dublin 8. The property, immediately adjacent to The Brazen Head, briefly comprises a four-storey office building extending to a net internal area of 8,960 sq. ft along with eight car-parking spaces. With the current occupier, Abbey Travel, in the process of moving to new premises nearby, 1 City Gate is being offered for sale with the benefit of vacant possession. The Irish Times, 1st November
HOSPITALITY
St Stephen’s Green, Dublin 2 The average daily rate for a room in the Shelbourne Hotel in Dublin jumped to €426 at the end of September from €410 last year, driving revenues at the five-star up by approx. one-fifth, according to its US owner. Kennedy Wilson, the property investment group that spent €138m in 2014 to take control of the 265-bedroom hotel from Irish Bank Resolution Corp, formerly Anglo Irish Bank, said in US filings that revenues from its hotel operations in the first nine months of 2023 are already approaching the full-year total for 2022. The Shelbourne was the only fully operational hotel in the Kennedy Wilson portfolio in the three months to the end of September, although it recently opened a resort in Hawaii after a refurbishment. According to the unaudited financial statements filed with the Securities and Exchange Commission, Kennedy Wilson’s hotel revenues jumped by more than 18%, from $14m in the third quarter of 2022 to $16.4m between June and September this year. The property investment company has also seen an increase in its cost base at the Shelbourne, with expenses from its hotel operations rising to $27m in the first nine months of the year compared with $20m over the same period last year. Kennedy Wilson’s annual report last year suggested the hotel’s valuation has increased by a quarter to €236m. It has spent approx. €36m on refurbishment works since it acquired the property. The Irish Times, 2nd November
IFSC, Dublin 1 UK-based investor Attestor Capital is selling its Lagoona Bar & Restaurant on Mayor Square and CBRE is inviting final offers in excess of €1m to be submitted by noon on 29th November. Attestor bought Lagoona as part of a group of five pubs from the family of TP Smith in a deal which valued the group at more than €35m in 2021. The five included the Auld Dubliner and The Norseman in Temple Bar, The Forty Four in Swords as well as TP Smiths on the corner of Jervis and Upper Abbey streets. The Lagoona itself is a modern contemporary venue, extending over two levels with a total floor area of 9,192 sq. ft. The ground floor includes a bar and lounge together with fully equipped catering kitchen. A first-floor mezzanine provides a dining atmosphere as well as the option to hold private gatherings. A small outdoor seating area is located at the front of the property. The Irish Independent, 2nd November
Kildare Town The former Boland’s pub on a 0.581-acre site in Kildare Town was sold for €1.26m. Located on a corner with frontage on Market Square and Bride Street, the property was sold in two lots by Jordan Auctioneers to the same bidder. Lot One including the former pub, a three-bedroom residence, two own door apartments, three commercial units, outhouses and garden on 0.304 acres achieved €860k which was over its €700k guide. An adjoining yard accessible off Bride Street on 0.277 acres sold for €400k or double its €200k guide price. Although the publican’s license was sold approx. 10 years ago, it is believed the purchaser may consider including hospitality in a new development. The Irish Independent, 2nd November
The Doyle Collection hotel group recorded a strong bounce back last year with its turnover and profits almost trebling following “steady growth” in tourism and leisure activity, and corporate business. Latest accounts for Doyle Hotels (Holdings) Ltd show that turnover rose to €147.7m last year compared with €53.2m in 2021, when many Covid-19 public health restrictions were still in place. The hotel group posted a pretax profit of approx. €28m last year compared with a surplus of just under €8m in 2021. Its trading Ebitda was €20.9m, an improvement of €28.6m on the previous year. The Doyle Collection operates eight hotels in Dublin, Cork, Bristol, London and Washington DC, including the five-star Westbury Hotel off Grafton Street in Dublin. Its Irish hotels achieved revenue of €59.7m during the year, up from €21.4m in 2021. The Irish Times, 6th November
HEALTHCARE / NURSING HOMES
O’Connell Street, Dublin 1 The HSE is to spend €45m on buying a building in the redeveloped area around Clerys department store in Dublin and fitting it out with an outpatient maternity ward. The Earl building, which is at the back of the new Clerys Quarter on O’Connell Street, will provide a range of outpatient services for the Rotunda Hospital by the end of next year. The works on the building will start in spring and are due to be finished by the end of next year. The HSE bought the property from OCES Property Holdings Limited, the company behind the redevelopment of the former department store. Other planned facilities in Clerys Quarter include offices, tea rooms, a rooftop bar, a Premier Inn hotel and a H&M store. The Irish Independent, 2nd November
MIXED-USE
Beaming Counting House, Cork The first tenant at the €30m Beamish Counting House development in Cork City will be a new mini-supermarket, Tesco Express, due to open in a fortnight. It is a significant breakthrough for owners BAM whose 150,000 sq. ft mixed-use development has remained vacant since it was completed two years ago, at the former Beamish & Crawford Brewery site on South Main Street. It has emerged also that a party is interested in buying the entire building from BAM. In addition, joint agents Behan Irwin & Gosling and CBRE confirmed that the office element of the scheme is “currently shortlisted for a 20,000 sq. ft occupier” and that there are two “strong enquiries” for 10,000 sq. ft. Grade ‘A’ offices, spread over five floors, account for 70,000 sq. ft of the development. Tesco Express is set to occupy a 5,710 sq. ft corner unit on the ground floor of the neighbouring 420-bed purpose-build student accommodation scheme, Lee Point, which forms part of the Brewery Quarter. The Irish Examiner, 1st November
Mount Merrion, Co Dublin Press Up hospitality group has closed its Union Cafe premises in Mount Merrion to make way for the development of a mixed-use scheme for which the Oakmount property vehicle received planning permission in 2018. The cafe, on the site of the former Kennedy’s pub, is at the corner of Deerpark Road and North Avenue in the south Dublin suburb. It was permanently shuttered on October 30th, a sign posted in the window of the premises stated. Dún Laoghaire-Rathdown County Council at the time gave the green light for the demolition of the existing four-storey structure on the Union Cafe site and its replacement by a three-storey pub and restaurant to be operated by Press Up group as well 50 apartments. The Irish Times, 6th November
INDUSTRIAL / LOGISTICS
CBRE Industrial and Logistics Report Investment in Dublin’s industrial and logistics sectors reached €86m in the third quarter of the year, according to CBRE Ireland’s latest report. Data reveals that the total accounted for 20% of overall Irish investment spend for the period. In the YTD, the amount has grown to €259m, equating to 18% of the overall investment market and on track to be the highest-ever proportion of annual Irish investment in 2023. Approx. 28 transactions were signed over the past three months, with 19 comprising lettings and nine for sales. The figures show a slight increase from the 26 in the previous period, but below the average in 2022, which was at 30 deals per quarter. Take-up for the third quarter remained solid, reaching 646,416 sq. ft. However, even with total take-up in the YTD now at 2.3m sq. ft, the figure remains 40% below the level recorded in the same period last year. Take-up for 2023 is now expected to fall below the 10-year average. The research also noted that no deals for 100,000 sq. ft were completed. Prime rents in the capital also rose for the third successive quarter, by 2% to €12.75 per sq. ft – 11% higher YoY, with further increases expected over the next 12 months. React News, 1st November
RESIDENTIAL / DEVELOPMENT
Apartment Remediation Scheme The government’s €2.5bn scheme to fix Celtic Tiger era apartment blocks may not be rolled out before the next general election. Cabinet approval for the scheme had been secured by Darragh O’Brien, the Minister for Housing, in January. He said in March that he planned to introduce legislation in 2023. However, these plans have now been delayed. The latest a new election can be called is spring of 2025, leaving the government in a race against time to implement the scheme. The scheme, approved in January, will primarily focus on defects related to fire safety, water ingress and structural issues. The Business Post, 2nd November
Ballycullen, Dublin 16 Sherry FitzGerald Commercial is guiding €16m for 25.72 acres of a greenfield site in Ballycullen. Located immediately adjacent to several existing residential schemes and within a short distance of the M50 motorway, the site at Stocking Avenue has the capacity for up to 340 own-door homes, according to the feasibility study prepared by MCORM in advance of the sale. The delivery will be dependent on the recently published Draft Sustainable and Compact Settlement Guidelines being adopted as expected. The Irish Times, 1st November
Swords, North Co Dublin Knight Frank is guiding a price of €2.5m for a 12.8-acre greenfield holding at Forest Little Road in Swords. The site benefits from 175 metres of frontage to Forest Road and is bounded by the existing Ridgewood residential state to the north and agricultural lands to the west and south. The lands fall under the terms of Fingal Development Plan 2023-2029 with 5 acres zoned for residential use and the balance of the lands, approx. 8 acres zoned as green belt. The Irish Times, 1st November
BTR Apartment Regulation A ban on the construction of rental-only apartments that do not meet minimum size standards is to come into force in Dublin, with the quashing of BTR regulations. Regulations introduced in 2018 meant apartment blocks built for the rental market did not have to comply with the minimum size standards of apartments for sale, and had significantly reduced requirements for other amenities such as storage and outdoor space. Late last year, Minister for Housing Darragh O’Brien indicated he intended to scrap the separate standards for rental-only developments, requiring new BTR blocks to meet the same specifications as apartments in the general market. In recent months, new guidelines, the Sustainable Urban Housing: Design Standards for New Apartments 2023, have been issued to local authorities, stating the “standard for BTR development is now the same as those for all other permitted apartment developments”. The guidelines include “transitional arrangements” to allow BTR applications that were already in the planning system by December 21st, 2022, to be processed. The Irish Times, 5th November
Property Prices More people are buying homes in rural areas, driving “strong and robust” price growth in those regions, while prices in urban areas are in decline, according to a new report on housing. Irish property tech firm Geowox has published its latest quarterly housing market report, which includes analysis of each single entry in the Irish property price register. The report focuses on actual sales rather than asking prices. It suggests homebuyers are increasingly looking to more rural areas to buy, after sales in those places experienced an increase of 4.6% compared to the same period a year ago. The report also found rural homes experienced “strong and robust” price growth YoY in the third quarter, with an increase of 11.1%. In contrast, urban prices declined by 0.7%. However, even with prices in rural and urban areas on different trajectories, the cost of buying in urban areas is still significantly greater. A total of 15,157 units were sold in the quarter, down 4.1% versus the same period last year. The Irish Times, 4th November
Landlord Exodus Approx. two-thirds of notices of termination served on tenants in the third quarter of this year were as a result of a landlord intending to sell the property, amid concerns the private rental sector will continue to shrink this year. According to the latest data from the Residential Tenancies Board there were a total of 4,518 notices to quit served to tenants between July and September 2023. This is a decrease on the number served in the second quarter of the year, during which 5,735 notices were served. Of those 4,518, a total of 2,863 were because the landlord intends to sell the property. In Dublin, where pressure in the rental sector is particularly acute, 1,863 notices of termination were issued during the third quarter, a reduction on the 2,298 notices issued in the second quarter of the year. Two-thirds of notices in the capital (1,210) were issued on the grounds of intended sale. The Irish Times, 2nd November
Clonburris, West Dublin South Dublin County Council has given the green light to Cairn Homes for a €240m apartment scheme for Clonburris after not receiving a single objection against the proposal. This follows the planning authority granting planning permission to Cairn Homes to construct 607 apartments for Clonburris. The initial scheme comprised 255 one-bedroom apartments, 307 two-bedroom apartments and 32 three-bedroom apartments across eight blocks including two rising to seven storeys tall and the applicants added a further 13 units in revised plans lodged with the council. The mixed-use scheme also includes offices, six retail units, a creche and an urban square. Cairn Homes is to sell 60 apartments to the council for social housing to comply with its Part V obligations under the Planning and Development Act. The Irish Times, 1st November
Ballyvolane, Cork A 28-acre land piece at Arderrow in Ballyvolane comes to market this week, between two other developments where site and ground works are advancing on provision of over 1,000 new homes. The land comes with mixed zonings and is guiding at €2.6m by Lisney. Alongside the local Lidl, and the longer-established Dunnes Stores at Ballyvolane, it adjoins a site just to the north where planning was granted for 753 homes by Cork-based company Longview Estates. The Irish Examiner, 2nd November
OTHER
National Capital Budget A black hole of at least €19bn in the government’s capital budget will force national flagship projects to be delayed or dropped, the Irish Fiscal Advisory Council (IFAC) is warning. Major infrastructure projects – including Metro North, Dart and national road, rail and cycle projects – are all under threat due to major inflationary pressures, the government has been warned. A continued shortfall in corporation tax receipts, as confirmed in the exchequer returns, has sparked “alarm and concern” within government over the state of the public finances, with spending allocations to come under pressure before the end of the year. Ministers had been warned by way of a cabinet memorandum in September of a deficit of up to €14bn, but IFAC is now warning the figure is more likely to be €19bn by 2030. There is now a growing consensus that ministers will have to prioritise some projects and shelve others unless the government decides to plug the expanding deficit. The Business Post, 5th November
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