30th June (Issue 1)
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.
Portfolio / Loan Sales
National Portfolio: Savills and JLL have been appointed by BOI to handle the sale of the National Portfolio (five retail parks), with offers in excess of €162m being sought. The total rent roll of €12.2m p.a. offers an initial yield of 7.2%, with a total floor area of 1.1m sq. ft and a weighted average unexpired lease term (WAULT) of 10 years. The portfolio consists of Nutgrove Retail Park in Rathfarnham which is valued at c. €62m (available to be purchased separately) and four retail parks valued at c. €100m; Letterkenny Retail Park, Sligo Retail Park, Tullamore Retail Park and Deerpark Shopping Park in Killarney. CoStar Finance, 24th June
Project Trinity: Eastdil Secured and Savills will welcome second round bids from five entities for Project Trinity, which represents the company that owns the Clyde Court Hotel and Ballsbridge Hotel, as part of a 6.8 acre freehold site. The bidders are Chartered Land, Cairn Homes, London & Regional, Capstone and Colony Capital / Paddy McKillen, who all bid between €145 – 155m. There is planning permission for 10 years on the site for the construction of 490 apartments and a 152-bed hotel, which doesn’t expire until 2021. CoStar Finance, 24th June
Project Jewel: The much anticipated sale of NAMA’s Project Jewel portfolio, which includes the prized Dundrum Town Centre, is expected to commence this week. The c. €2.5bn par value portfolio of loans linked to developer Joe O’Reilly is expected to be sold for in excess of €1.4bn and will attract the interest of sovereign wealth funds and institutional investors, while British and American REITs are also believed to be interested. Dundrum Town Centre currently has a rent roll of c. €58m p.a. NAMA Wine Lake, 28th June
Office
Spencer Dock: Goldman Sachs, NAMA and Hines are to dispose of the building Block R in Spencer Dock, with a guide price in excess of €90m. The tenants consist of The Office of Public Works, The Central Bank and Nationwide Building Society. Block R appears under-rented with a current rent roll of c. €4.8m p.a., which offers an initial yield of 5.2%. Overall the building comprises 127,000 sq. ft. across seven stories with 46 car parking spaces. The WAULT for the building is attractive at 9.93 years. CoStar Finance, 24th June
Hainault House: Irish Life Investment Managers have submitted a planning application to Dublin city council to expand Hainault House on St Stephens Green. The application proposes to replace the existing 33,000 sq. ft. property with redesigned 58,000 sq. ft. premises consisting of six storeys above a double basement. The development is expected to cost c. €20m. The Irish Times, 24th June
Clyde Real Estate: Former presidential candidate Sean Gallagher and Colm Piercy, Chief Executive of the Digiweb Group, have together formed Clyde Real Estate (CRE). CRE have raised €25m through a combination of US private equity funds, bank debt and shareholder equity to fund the purchase of commercial properties such as the 300,000 sq. ft. Alcatel-Lucent facility in Dublin and the 230,000 sq. ft. Braun facility in Carlow. CRE are now seeking to undertake further investments both in Ireland and overseas. The Sunday Business Post, 28th June
Hotel
Dalata Redevelopment: Dalata is to spend c. €27m on the redevelopment of its Clayton and Maldron hotels. As part of the redevelopment Dalata will also rebrand 10 of its recent acquisitions to form part of the Clayton brand. The hotels to be rebranded include the Bewley’s hotels in Ballsbridge and Dublin airport, as well as the Silver Springs hotel in Cork. The Irish Times, 23rd June
Jurys Inns: Lone Star has appointed the investment bank Rothschild to undertake a strategic review of the Jurys Inns group, which it acquired for €910m in March this year. The review could lead to a variety of options, ranging from a full / partial disposal of the group or a potential return to the stock market. Jurys Inns have five hotels in Ireland, 26 in Britain and one in Prague, employing c. 2,000 staff. The Sunday Business Post, 28th June
McGettigan Refinance: The hospitality assets of the McGettigan family are to be purchased by an unnamed US investor, releasing the family from their NAMA obligations in the process. The acquisition is to be completed via the use of a unitranche debt instrument, with Deloitte Corporate Finance overseeing proceedings. The McGettigan family have pub and hotel assets in Ireland, New York, Singapore, the Middle East and Dubai. The Sunday Business Post, 28th June
Retail
Manor West Retail Park: Marathon Asset Management has completed the purchase of Manor West Retail Park in Tralee for €59m. The current rent roll of c. €4m p.a. offers an initial yield of 7% for the fund, who have invested c. €412m in Irish assets over the past 12 months. The shopping centre has a retail floor area of 350,000 sq. ft. and attracts c. 90,000 visitors per week. The Irish Times, 24th June
Residential
Dartry Scheme: Manorglen Properties have unveiled the first of five properties from their development on Temple Road, Dartry with a guide price of €2.2m. The 2,400 sq. ft. detached property (€916 psf) distinguishes itself with its contemporary design on the largely Victorian road. Three of the remaining houses are to be completed this October while the remaining property is expected to be finished by June 2016. The Irish Times, 25th June
Dublin Land Grab: New Generation Homes have acquired c. 40 sites in Dublin, ensuring that they will have a significant say on future residential development in the capital. The group, who are backed by the UK investment manager M&G Investments, have obtained planning permission for many of the sites but are also expected to dispose of some to capitalise on the recovery of the Irish property market. The Sunday Times, 28th June
State Property Fund: The American private equity firm KKR is believed to be in talks with the state-run ISIF over the launch of a new residential development fund, believed to be in the region of €400 – 500m. The fund, which will provide private developers with access to state resources, is to be launched in the near future as the state is keen to increase the supply of housing in key urban areas of the country. The Sunday Business Post, 28th June
Building Restrictions: The CEO of Hines Ireland, Brian Moran, believes that the current rules governing apartment building make the cost of construction too expensive to provide affordable apartments. Hines purchased a 400 acre site in Cherrywood last year and plans to construct c. 3,000 homes there, however they are currently engaging with Dublin’s councils to relax standards before they commence construction. Moran considers Irish building prices to be potentially the highest in Europe. The Irish Independent, 28th June
Other
Nursing Home Development: The Irish Times examines how the lack of development finance in the nursing home sector, particularly from the mainstream financial institutions, poses a threat to our economy given Ireland’s aging population. With construction having fallen from 1,000 beds p.a. up to 2009 to 339 beds p.a. between 2009 and 2012, there could be a potential shortfall of 8,000 nursing home beds by 2021. The Irish Times, 26th June
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