8th December (Issue 24)

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 Clear: A joint bid of c. €503m from Cairn Homes and Lone Star has been chosen as the preferred bidder for Ulster Bank’s €2bn Project Clear loan portfolio. The loan portfolio consists of 1,694 acres of land across 31 sites suitable for residential development, with the majority of the sites located in Dublin. Cairn Homes and Lone Star have split the portfolio 75:25, with Carin contributing €378m and Lone Star paying €125m, respectively. The €503m sale price was well below Ulster Bank’s €650m asking price. Cairn Homes estimate that their share of the portfolio will allow them to develop 14,000 properties, with a gross development value of over €2bn. CoStar Finance, 7th December

Project Lanyon: Davidson Kempner has been chosen as the preferred bidder for Bank of Ireland’s Project Lanyon, which consists of 700 residential assets in Northern Ireland. Davidson Kempner bid over GBP£50m for the portfolio, for which Savills had set a price tag of £55m. With improving rental yields and capital values in the North, further large scale residential portfolios may be forthcoming to capitalise on increasing demand. CoStar Finance, 7th December



IPUT Development: The Irish investment fund IPUT has commenced demolishing the existing buildings the former passport office at 10 Molesworth Street, Dublin 2, to pave the way for a new €40m development. The buildings will be replaced by a seven storey, 115,000 sq. ft. grade A office block, for which the rent is expected to be in the region of €65 psf. In total IPUT intend to supply the Dublin market with 300,000 sq. ft. of office space over the next three years. The Irish Times, 2nd December  

St Stephen’s Green: Online recruitment firm Indeed is to sub-let part of 124 / 127 St Stephen’s Green, Dublin 2 from Bank of Scotland Ireland. Indeed will occupy 60,000 sq. ft. of the 126,637 sq. ft. property on the third, fourth, fifth and sixth floors at a rent of €45 psf. Bank of Scotland Ireland signed a 25 year lease in 2005, for which there is a break in year 15. The property was developed by the daughters of the hotel operator PV Doyle in 2005. Once the Bank’s Irish operation was discontinued, the property was sublet to Certus. Certus has since commenced the winding down of its operations, paving the way for Indeed to take-up a section of the property. The overall rent roll of the property is c. €5.4m, with additional income from the property’s 46 parking spaces. The Irish Times, 2nd December



Radisson Sligo: Padraic Rhatigan and two of his business partners, Bernard Mullen and Thomas Porter, have reached an agreement with Goldman Sachs on debt secured by the Radisson Blu Hotel in Sligo. Rhatigan and his partners have paid €5m to settle the outstanding debt, with Bank of Ireland assisting in the refinance. The agreement forms part of Rhatigan’s overall settlement with Goldman, with the par value of his loans estimated at €80m. Goldman purchased Rhatigan’s loans as part of Ulster Bank’s €200m Project Nadal.  The Sunday Times, 6th December

Tara Towers: Dalata has been chosen as the preferred bidder for the 111-bed Tara Towers hotel in Dublin 4. Dalata is believed to have bid €12m for the hotel, for which receivers Duff and Phelps had been guiding €9m. The hotel was developed in the 1970s by PV Doyle and was previously owned by Bernard McNamara and Jerry O’Reilly, who paid €14.2m in 2003.  The Sunday Independent, 6th December

Hotel Sales: The latest figures from CBRE on the hotel market in Ireland show that the number of hotels sold in the Republic continue to outweigh the number sold in the North. In the first nine months of 2015 there were 54 hotels sold in the Republic for c. €650m, compared to the nine hotels sold in the North for c. GBP£67m. What is positive for the market in the North is that the figures are a significant improvement on 2014, when the only sale was Tower Hotel Derry at £4.4m. The Irish Times, 2nd December



St Stephen’s Green Shopping Centre: The US fund Madison International Realty has acquired a 35.4% stake in St Stephen’s Green Shopping Centre. The fund paid Irish Life €60m for the stake, more than 30% above JLL’s guide price of €45.6m. Irish Life remain the largest shareholder of the shopping centre with a 37.6% stake, while Pierce Molony owns the remaining 27%. It is believed that a €30m refurbishment of the shopping centre may be forthcoming now that the sale has been completed. The 320,000 sq. ft. shopping centre generates annual rental income of c. €6.2m from 90 retail units and c. €2.2m from a 1,200 space car park. The Irish Times, 5th December



NAMA Residential Development: Following NAMA’s recent announcement that they aim to develop 20,000 new homes by 2020, five developers have lodged a complaint with the European Commission in an attempt to block NAMA’s project. The complaint centres around NAMA’s cost of funding, with NAMA able to obtain favourable rates as it has a state guarantee. NAMA is able to provide its debtors with funding at c. 5% – 6%, while development finance obtained outside NAMA is currently c. 14 – 15%. The developers who lodged the complaint are David Daly, Paddy McKillen, Michael O’Flynn, New Generation Homes and MKN Properties. The Irish Times, 7th December

Drumcondra Scheme: Greg and Lisa Gallagher, through their investment company Grelis Limited, have submitted a planning application for the development of 101 homes and a 69-bed nursing home in Drumcondra, Dublin 9. The 101 homes are to be split across 59 houses and 42 apartments. The proposed development will take place on the site of the old Carmelite Convent on Gracepark Road, and will require the demolition of some of the current buildings on the site. NAMA Wine Lake, 6th December

Dublin Schemes: The latest survey from the SCSI on planning applications for residential developments in Dublin of 25 or more units shows a significant decrease in the number of units approved in Q3 2015. In total there were 852 units approved for development across thirteen schemes in the quarter, a 59% drop on the 2,062 units approved in Q2 2015. With an estimated 7,000 new units required annually in Dublin each year to satisfy demand and only 2,735 under construction, the number of units completed this year looks set to fall well below the required level.  A key factor hindering construction is the cost of development finance, with affordable financing proving extremely difficult to source. The Irish Times, 3rd December

Carnalea: The off market sale of Carnalea on Thormanby Road in Howth, north Dublin for €5m has seen the property become the most expensive residential property sold in north Dublin since 2010. Carnalea is a 5,250 sq. ft. property which boasts fantastic views of Dublin Bay. The property was previously owned by a couple involved in property development, who purchased it in 2003. The purchase price represents the third highest paid for a residential property in Dublin this year, behind Sorrento House in Dalkey (€10m) and Strathmore in Killiney (€7.5m). The Irish Times, 3rd December



NAMA Development: NAMA has announced plans to spend €7.5bn developing 4m sq. ft. of commercial space in the Dublin docklands and 20,000 new homes in Dublin and other in-demand areas. As its first project under this proposal, NAMA will fully fund the €170m redevelopment of Boland’s Mill in Dublin Docklands. The redevelopment will take over two years to complete and will see the development of 274,000 sq. ft. of office space, 41 apartments, retail units and cafes. The development will be carried out under the instruction of the Savills, who were appointed as receivers by NAMA. The Irish Times, 3rd December 

Tougher Business Park: The US fund York Investment Corporation has completed the purchase of Tougher Business Park in Naas, Co. Kildare for over €17m. The purchase price represents a premium of €3m over the guide price of the business park. The business park has 56 buildings with a floor area of 753,446 sq. ft., spread over 125 acres. The key tenant is the transport and logistics company DSV, who pay €1.12m of the €1.8m annual rent roll for 370,000 sq. ft. of industrial buildings. Joint agents DTZ Sherry Fitzgerald and Savills handled the sale, under the instructions of the receivers NAMA and Bank of Scotland Ireland. The Irish Times, 2nd December

Clarendon Inn: The Clarendon Inn bar and restaurant on Clarendon Street, Dublin 2 has been purchased by James and Edward Dunne. The brothers paid over €2.4m for the property, for which CBRE set an asking price of €1.6m. In total there were 15 bidders for the 4,068 sq. ft. property, who would have been eager to acquire an established bar and restaurant in one of Dublin’s most vibrant areas. The Irish Times, 2nd December



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