7th July (Issue 2)
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
Project Maeve: Deutsche Bank is to pay c. €97m for Gerry Barrett’s loan portfolio. The purchase price represents an 88% discount on the par value of the loans of €785m. The assets in the portfolio include the G Hotel and Meyrick Hotel in Galway and the D Hotel and Scotch Hall Shopping Centre in Drogheda. The sale represents NAMA’s first loan portfolio sale of 2015. CoStar Finance, 1st July
Harvest Portfolio: Avenue Capital has completed the purchase of NAMA’s Harvest Portfolio for c. €40m. The total rent roll of c. €4m p.a. offers an initial yield of 10%. The portfolio consists of four shopping centres at Dungarvan, Mullingar, Thurles and Johnstown in Navan. The Irish Times, 1st July
Project Albion: Oaktree Capital Management has been chosen as the preferred bidder for NAMA’s Project Albion loan portfolio, paying c. £115m. The purchase price represents a c. 49% discount on the par value of £226m. The portfolio predominantly consists of legacy AIB facilities secured by commercial UK properties, including the five star Mar Hall hotel near Glasgow. There are also 300 acres of land spread across 10 sites. CoStar Finance, 2nd July
CarVal Investors: CarVal Investors, who already purchased Irish loan portfolios such as Project Club, Project Pittsburgh and Project Parasol (on a JV with Goldman Sachs), are believed to be interested in Project Poseidon and Project Connaught, according to the Sunday Times. Lloyd’s Project Poseidon has a c. €4.2bn par value and consists of 5,000 loans to 3,500 customers, while TSB’s Project Connaught has a c. €900m par value consisting of distressed commercial property and buy-to-let mortgages. The Sunday Times, 5th July
Patron Capital: Patron Capital has appointed receivers over some of the properties securing the Project Drive loans which they acquired from NAMA in 2014. Project Drive was a €228m loan portfolio linked to Maple 10 borrower Brian O’Farrell, for which Patron paid c. €49m. Assets securing the portfolio include the Northside Shopping Centre in Dublin, industrial properties in north Dublin as well as a house at the K Club. The Sunday Times, 5th July
Office
George’s Dock 2: Irish Life has completed the purchase of George’s Dock 2 for c. €33m. With a current rent roll of €2.047m p.a., George’s Dock offers a net initial yield of 6%. George’s Dock contains 40,000 sq. ft. of office space spread across five storeys with six 25 year leases from July 1996, which are subject to upward only rent reviews. The Irish Times, 1st July
Ballsbridge Project: New Generation, Johnny Ronan and Paddy McKillen are amongst the five bidders chosen to submit final bids for the Ballsbridge Project, a 3.7 acre development containing four office blocks to the front of AIB’s Bank Centre. The development, which was previously bought by Sean Dunne for c. €200m as part of his “Knightsbridge in Dublin 4” vision, is expected to be sold for over €50m. The Sunday Business Post, 5th July
Prime Rents: CBRE’s Bi-Monthly Research Report indicates prime Dublin office rents are currently in the €50 psf range, however there are also negotiations in progress for units in excess of this figure. CBRE note that until there is a material increase in supply, prime rents will continue to increase. In addition, trends which are becoming more prominent in the office market include the sub-letting of leases and the assignment of surplus accommodation. CBRE Bi-Monthly Research Report, 30th June
Hotel
Carton House: The Sunday Business Post believes that Kennedy Wilson is close to acquiring the four star, 165 bed Carton House hotel in Co. Kildare. The hotel incurred substantial debts in the 2000s whilst undergoing a redevelopment of c. €80m, with some of the hotel’s loans being transferred into NAMA. The hotel includes two golf courses which were designed by Colin Montgomerie and Mark O’Meara, while it is also the base of the Irish rugby team. The Sunday Business Post, 5th July
Lough Erne: Having closed the c. €8.4m purchase of the five star, 120 bed Lough Erne resort in the past week, the Saliba family are now hoping to establish a portfolio of Irish hotel assets. The US investors are also planning to invest as much as €9m to refurbish the Lough Erne resort, which has been awarded the 2017 Irish Open. The Sunday Business Post, 5th July
Retail
Monaghan Shopping Centre: Monaghan Shopping Centre has been brought to market by DTZ with a guide price of €10.1m. Rental income of €1.05m p.a, initial yield of c. 10%. Tesco are the anchor tenant and also own their unit. The WAULT of the centre is c. 5.4 years with only one vacant unit, which is to reopen shortly. The Irish Times, 1st July
Airside South Quarter: JLL have been appointed to handle the sale of two buildings in Swords, Co. Dublin known as Airside South Quarter, with a guide price of €12m. The four-storey buildings have an annual rent roll of c. €1.5m over c. 97,000 sq. ft. The tenants include TGI Fridays and Starbucks, with the upper floors of the front block used as a nightclub known as The Wright Venue. The Irish Independent, 1st July
Frascati Centre: The Roche family are to sell the Frascati Centre in Blackrock, Dublin, for c. €65m to a subsidiary of Invesco. The family previously ran the Roches Stores franchise before selling it to Debenhams for over €29m in 2006, whereby they retained the buildings as per the terms of the transaction. The Sunday Business Post, 5th July
Residential
Newbridge Site: The receiver Mazars has appointed Kelly Walsh in Dublin to sell a 21 acre site in Newbridge, Co. Kildare, with offers in excess of €5m being sought. The site has planning permission for 168 houses and 78 apartments and is located at The Meadow on Station Road. The Irish Times, 1st July
Boland’s Mill: Dublin City Council have approved the proposed €150m redevelopment of the Boland’s Mill site in Dublin’s docklands, which is being backed by NAMA. The successful applicant proposes to construct three residential / office blocks, as well as the redevelopment of the five derelict mill buildings, with the tallest building to be 53 metres high. The development is one of the first applications to be approved under the Docklands Strategic Development Zone scheme. The Irish Times, 3rd July
Licensing: In an attempt to offset the issues associated with the lack of development finance currently in the market, NAMA are to offer developers the licensing of development land. This practice is being tested on a 15 acre site in Maynooth, Co. Kildare. The purchaser of the site will only have to pay a deposit of €1.25m before they commence work on the site, with the balance to be paid within three years. In return, the developer will be required to start work on the site within six months and have 40 units for sale within 18 months. The Sunday Business Post, 5th July
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