Household Finance and Consumption Survey (HFCS) 2018

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The Central Statistics Office has today issued results from the Household Finance and Consumption Survey (HFCS) for 2018 and comparable data for 2013, the previous year this survey was run.

Commenting on the report, Stephen Lee, Statistician, said: “The HFCS is the only household survey that collects combined information on asset, income and debt levels of Irish households.

The results show that in Ireland, the wealthiest 10% of all households have a net wealth greater than €835,000 while the bottom 10% have a net wealth of less than €1,000. Net wealth is calculated as the value of all assets minus debt.

In 2018, the median net wealth value of Irish households was €184,900, representing an increase of 80.2% on the 2013 value of €102,600.

The median value is obtained by arranging all households in ascending order from the smallest to the largest value and then selecting the middle value. In terms of wealth, the median provides a truer reflection of the average household as it is not influenced by extreme values.

The value of the household’s main residence is a key component of wealth. In Ireland, 69.5% of households own their own residence. In 2018, the median value for households’ main residence was €250,000, up from €150,000 in 2013.

The median net wealth of households that own their own home is €287,300 while for renters it is considerably less at €5,900.

We see that wealth is more concentrated in the ‘Eastern and Midlands’ region with a median net wealth of €212,700, compared to €189,700 in the ‘Southern’ region and €146,900 in the ‘Northern and Western’ region.

Almost one third of households (32.7%) reported that they received an inheritance or a substantial gift at some time in the past. However, this varies depending on how wealthy a household is. Over two thirds (67.6%) of the wealthiest 10% of households received a substantial inheritance or gift but this drops to just over one tenth (10.3%) for the 10% of households with the lowest net wealth.

More than nine out of every ten households (94.3%) own some form of financial asset including savings, shares, bonds, investments and voluntary pensions. For households that own financial assets the median value is €7,900 up from €6,300 in 2013.

Over half (51.5%) of all households have some form of debt including mortgages, loans, credit cards and overdrafts, down from 56.8% in 2013. Overall, the median value of debt, for those households that have debt, has dropped by over €20,000 since 2013, from €63,000 to €42,300.

For households that have a mortgage on their home, the median loan to value (ltv), the ratio of the outstanding amount of the mortgage to the current value of the property, is 45.3%, down from 73.5% in 2013.

In 2013, 31.9% of all homes owned with a mortgage were in negative equity, whereas the 2018 rate is 3.9%.”

CSO Published Article

Starbucks opens drive-thru location at The Marshes

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The first drive-thru Starbucks on Ireland’s east coast has opened at Marshes Shopping Centre and coffee lovers should keep an eye out for promotions throughout the week.

The move has been hailed by centre management at Marshes as “another vote of confidence in the north east’s most popular retail destination”.

Starbucks operates over 20,000 outlets globally, but this is only the second drive-thru in the Republic of Ireland.

The first Starbucks drive-thru in Ireland opened in 2018 at Shannon.

The new drive-thru is located at the Dunnes Stores entrance to the centre, beside an An Bóthar Iarainn and the link road to the Avenue Road/Tom Bellew Avenue.

“We are delighted with this wonderful development at Marshes,” said centre manager Seán Farrell.

“Marshes continues to enjoy great success and the opening of the Starbucks drive-thru is another vote of confidence as the centre experiences more growth and renewal.”

This is the second Starbucks outlet in the centre, the coffee chain has had a store in Marshes since 2014.

Published Article

Retail Sales volume increased by 3.6% in December 2019

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The volume of retail sales increased by 3.6% in December when compared to November on a seasonally adjusted basis and increased by 5.8% on an annual basis.

Note: ‘Black Friday’ is included in the December reporting period for the RSI, which covers the 5 weeks 24/11/2019 – 28/12/2019. In 2018 ‘Black Friday’ was covered in the November reporting period.

When Motor Trades are excluded, the volume of retail sales increased by 2.8% in December 2019 and rose by 5.0% when compared with December 2018.

The sectors with the largest month on month volume increases were Food, Beverages & Tobacco (11.7%) and Motor Trades (5.3%).  The sectors with the largest monthly volume decreases were Other Retail Sales (-10.0%) and Books, Newspapers & Stationery (-3.0%).

There was an increase of 3.4% in the value of retail sales in December 2019 when compared with November 2019 and there was an annual increase of 4.6% when compared with December 2018. If Motor Trades are excluded, there was an increase of 2.9% in the value of retail sales in the month and an increase of 3.0% in the annual figure.

Unadjusted indices are available on CSO Statbank.

Online Sales

The sector with the highest share of its sales online in December 2019 was Online & Mail Order at 87.5%. This sector accounted for 1.0% of turnover in the 2017 Annual Services Inquiry. For Electrical Goods the online share was 13% and for Clothing, Footwear & Textiles it was 7.3%.

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Eason puts Blanchardstown Centre store on the market for €16m

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One of only a handful of independently-owned retail units at the highly successful Blanchardstown Centre has been brought to the market by agent Bannon at a guide price of €16 million.

The property, which is being offered as a sale-and-leaseback opportunity, will be the subject of a new 25-year lease to its current owner, the leading book and stationery retailer,Eason, at a market rent of €1.1 million per annum, reflecting an initial return of 6.25% for the prospective purchaser.

The subject property comprises a large double unit extending to 1,125 sq.m (12,104 sq.ft) over two floors and is centrally located within the Blanchardstown Centre, enjoying frontage on to both level 1 and level 2 malls.

At level 1, the unit is located opposite the new flagship 12,500 sq.ft JD Sports which is under construction and due to open later in the year. At level 2 the unit is situated directly opposite the Hollister flagship store, which is due to open in the third quarter of this year. This is in addition to a number of other new developments within the scheme including a new Aldi at level 1 and nine new restaurants at level 2. Other high-profile occupiers in the retail scheme include Dunnes, Penneys, M&S, BT2 , Boots, H&M and Zara.

Blanchardstown Shopping Centre scheme is Ireland’s largest shopping and leisure destination and is majority owned by Multi/Blackstone, who acquired their interest from Green Property in 2016 for close to €950 million implying a yield level for mall units in the region of 4.75%.

New units

In terms of the subject property, Bannon say there is scope in the long term to increase the rental income by dividing its existing space at levels 1 and 2 into two or even four units. Were these new units to be let independently of each other, the selling agent believes the estimated rental value grow to as much as €1.28 million.

The lessee of the current combined unit will be Eason Limited. This entity is the lessee on all the major Eason’s units in Ireland including the four other M50 shopping centres being Dundrum Town Centre, Liffey Valley Shopping Centre, The Square Tallaght and The Pavilions Swords.

Eason Limited had a turnover of €109 million in the year ended January 2018, with a profit after tax and restructuring costs (€3.3m) of €700,000. The profit after tax for the year ending January 2019 is expected to be approximately €3 million bringing the balance sheet value to around €6 million. Full accounts for 2018 and 2019 are available on request.

Quite apart from securing an attractive initial yield of 6.25%, the purchaser of Eason’s Blanchardstown unit will have the benefit of a 10-year parent company guarantee from Eason Operations Limited (EOL). This guarantee will be limited in terms of financial exposure to three years’ rent. Full draft accounts for EOL will be made available to prospective purchasers of the Blanchardstown unit on request.

Eason’s sale of the Blanchardstown unit forms part of a wider disposal of 13 of its properties which it announced in 2018. The company estimated at the time that the sale of this property portfolio could generate a windfall of about €60 million. Some €20 million of these proceeds are set to be transferred to Eason’s retail business with the remainder divided among its 220 shareholders.

Warehouse

The first and most significant transaction in the process saw Eason secure €19 million from the sale in January 2019 of its 17,176 sq.m (184,886 sq.ft) St Margaret’s warehouse on 8.4 acres in north Dublin to Irish property company Iput. Eason’s flagship store on O’Connell Street remains on the market on a sale-and leaseback basis at a guide price of €24.5 million.

Commenting on the sale of Eason’s Blanchardstown unit, Rod Nowlan, director at Bannon, says: “This is an opportunity for smaller institutional funds and private investment houses to gain access to an asset quality usually reserved for super funds.”

Published Article 

How To Achieve The Connectivity That Today’s Tenants Need

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Connectivity is firmly established as a necessary utility for office tenants. However, there are still many office locations that don’t deliver the connectivity that businesses require. A Bisnow survey carried out in September found that 69% of businesses had moved location to improve connectivity, while 41% of respondents said poor quality connectivity hindered them from doing their job properly on a weekly basis.

The savviest landlords and developers are therefore using all available technologies to achieve high connectivity. Dublin Airport Central has taken IT infrastructure seriously from the first stages of development, and the scheme has now achieved WiredScore Platinum certification.

“Today, fast internet is the most important factor for specific companies searching for office space who see their IT infrastructure as more important than the physical building they occupy,” DAC Head of Sales and Marketing Paul Byrne said. “Until now there has been very little information available to tenants about the quality of internet connectivity in office spaces. Wired Certification provides that transparency and access to information for tenants.”

What Good Connectivity Means

WiredScore has quickly become a recognised benchmark for a landlord to demonstrate a property’s level of connectivity. To achieve Platinum certification, the development must demonstrate an extremely high quality of infrastructure, as well as factors such as good communication with fibre providers, in-building mobile planning and free WiFi in common areas.

All these elements come together to provide a high level of experience for those who use the building. They come at a cost to the developer, of course, but the return will be an increased level of tenant interest. Businesses will increasingly turn away from offices that don’t meet their connectivity requirements.

Additional concerns for a landlord or property owner are IT security and reliability. Business operations are now so dependent on the internet that tenants need to be assured that they can stay online at all costs.

“At DAC we have installed multiple diverse routes underground that deliver fibre optic connectivity to the IT hub in each building,” Byrne said. “In addition, there are several different IT routes into the overall campus for further security. Being an airport city, IT security is one of, if not the, most important requirements we deliver for our customers.”

To ensure reliability, developments are increasingly including back-up generators to supply emergency power if needed. DAC has taken this further by providing space within the buildings’ plant areas for tenants to install their own private generators.

Future Proofing

It’s not enough for a business to improve connectivity for today’s technology, however. The speed of improvements to both wireless and mobile connectivity and what can be done with technology mean that an office provider must keep one eye on the future. “We have invested and we continue to invest very significant capital into future proofing our campus,” Byrne said. “In a rapidly evolving digital economy, technology is increasingly central to operations. Fast and reliable connectivity is the lifeblood of any modern business.”

An example of DAC’s investment in future proofing is the inclusion of a distributed antenna system to effectively provide high-speed wireless coverage across the campus buildings. This means that when 5G is rolled out, for example, high mobile connectivity should be available.

“Being an airport city, physical connectivity has always been one of our main unique selling points in terms of attracting companies here,” Byrne said. “However, in respect of the actual building and services, achieving world class IT infrastructure was a goal for us from the very beginning as we have always recognised that business continues to evolve at a rate of knots and we must stay up with the pace. For perspective, the iPhone only turned 12 this year, it still isn’t even a teenager. Where will the world be in a decade?”

We are already getting glimpses of how 5G, artificial intelligence and the Internet of Things will change the way we operate. To ensure businesses can make the most of new technology when it arrives, a landlord must lay the IT foundations today.

This feature was produced by Bisnow Branded Content in collaboration with Dublin Airport Central.

Quanta Capital acquires St Stephen’s Green Georgian for €4m

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Real estate investor Mel Sutcliffe of Quanta Capital has acquired No 10 St Stephen’s Green for around €4 million. Located immediately adjacent to the historic Hibernian Club and dating from the 19th century, the high-profile Georgian building extends to 465 sq.m (5,000 sq.ft) over four floors and was formerly the home, in part, to the Il Posto Italian restaurant which ceased trading in 2018 after more than 20 years in business. Separately, the ground and upper floors had been operating as a licensed premises since 2014 but these were vacated prior to the sale.

The subject property was offered to the market last September by selling agent Bannon on behalf of Antoine Xavier’s Xestra Asset Management. Xestra had, for its part, acquired the property in 2017 from developer Sean Mulryan’s Markland Holdings for around €2.5 million albeit subject to its existing tenancies. David Carroll of Bannon brought the property for sale with full vacant possession and with the further benefit of a seven-day publican’s licence.

Number 10 enjoys a prime location directly opposite St Stephen’s Green itself and just 100m east of Grafton Street.

News of Sutcliffe’s acquisition of the property comes just six weeks after The Irish Times reported on his company’s €40 million off-market purchase of the landmark Shelbourne House in Ballsbridge.

The Shelbourne House purchase is understood to have been supported with funding from Fairfield Real Estate Finance and its US-headquartered backers, Oaktree Capital Management.

Shelbourne House previously formed part of the portfolio of O’Malley Homes and Development, and has for years served as the location for its headquarters.

Published Article

Slack lease the lure as ESB seeks €168m for Fitzwilliam 28

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The combination of Dublin’s status as a location to deploy international capital and its standing as the city favoured by global tech giants for their European headquarters is expected to spur significant interest from European and international investors in the sale of Fitzwilliam 28.

Located on Fitzwilliam Street and at the heart of the traditional central business district in Dublin 2, the building, which has just been leased in its entirety to workplace collaboration tech giant Slack Technologies, is being offered to the market by joint agents Savills Ireland and Bannon at a guide price of €168 million.

Fitzwilliam 28 is one of two adjoining but independent blocks both being developed by Ireland’s largest utilities company, the ESB. The sister block to 28, Fitzwilliam 27 will be owner-occupied by the ESB.

Upon completion in the second quarter of this year, Fitzwilliam 28 will comprise 12,599.2 sq.m (135,617 sq.ft) of prime grade-A accommodation over eight floors with 50 car-parking spaces.

Slack Technologies have taken a new long-term lease of the entire building from practical completion. The rent roll will be in excess of €7.7 million per annum, reflecting an initial yield of about 4.2 per cent. Colliers International represented Slack Inc in the recent letting, while Savills Ireland and Bannon represented the landlord.

Slack’s decision to rent all 135,617 sq.ft of space at Fitzwilliam 28 will give it the capacity to add as many as 1,100 jobs in Dublin. The company currently employs about 180 people at its existing European headquarter operations at One Park Place on nearby Hatch Street.

In terms of specification, Fitzwilliam 28 will feature extensive landscaping and sunken gardens, a double-height reception with marble walls and natural stone floored area leading to a centralised core offering the occupier maximum flexibility. The A3 BER-rated building will also feature more than 1,759 sq.m (18,933 sq.ft) of rooftop, courtyard and terrace gardens, providing extensive views of Dublin, in particular Merrion Square.

The building is designed by internationally acclaimed Grafton Architects and O’Mahony Pike Architects. PJ Hegarty & Sons, who are the leading design and build contractors in Ireland, are the contractors. They have a strong track record of developing high-profile offices. Recent experience includes No 10 Molesworth Street, AIB’s new corporate headquarters, and No 40 Molesworth Street, Jet. com’s headquarters.

Prime location

The Fitzwilliam scheme enjoys a prime location within close proximity to Government Buildings, the traditional retail core of Grafton Street and St Stephen’s Green and the city’s south docklands. The immediate area is well serviced by Dublin’s public transport network with both the Luas and Dart, and numerous Dublin Bus routes located within a short walk.

Fergus O’Farrell, director of investment at Savills Ireland, says: “Interest remains strong in the office sector. Dublin’s strong occupier market and economy, coupled with the quality of this asset and its central business district location, will attract interest from global investors.”

Rod Nowlan, investment director at Bannon adds: “As proven by recent lettings to the likes of LinkedIn, Twitter and Stripe, modern offices of scale situated in the traditional city core represent the focus of the current and likely future wave of occupiers. This reflects an increased emphasis by companies on “employee experience”, and there are few modern buildings that can deliver on this aspiration more than Fitzwilliam 28.

Published Article

Davy upgrades GDP growth forecast for 2020 to 5.5%

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Stockbrokers Davy have revised upwards their GDP growth forecast for 2020 to 5.5% from 4.1% previously.

Davy said the upgrade came on the back of strong foreign direct investment, expansion in the multinational sector and an exceptional export performance.

The new forecasts puts Davy well above official projections including the Central Bank’s estimate of 4.3% and the Department of Finance’s forecast of 3.9%.

The stockbrokers also revised upwards their forecast for Irish GDP growth in 2019 to 6.2% from 5% previously.

In its latest Irish Economist forecast, Davy said that exports are set to grow by 11% in 2019 and 7% in 2020, due to continued strong foreign direct investment levels.

Davy also said it expects consumer spending to grow by 3.2% in 2020 and employment by 2.5%, with the unemployment rate falling to 4.4% and the Budget surplus growing to 0.8% of GDP.

On Brexit, Davy said that the UK’s planned departure from the European Union uncertainty depressed the Irish indigenous economy in 2019.

The stockbrokers noted that about 50% of SMEs postponed investment plans and the pick-up in liquidity in the housing market was delayed.

It also said that non-residential construction slowed sharply last year, with output in the distribution, transport and tourism sectors flat on the year.

“Now that a no-deal Brexit cannot occur in 2020, we expect output in indigenous sectors to grow by 3.5% in 2020, slightly faster than the 3% in 2019,” Davy said.

It also said it expected house price inflation to rise slightly to 2% during 2020 from 1% in 2019.

Published Article

Construction grows again in Republic after three-month slowdown

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Construction began growing again in December following a three-month slowdown in the Republic, the latest figures show.

Ulster Bank’s construction purchasing managers’ index (PMI) shows that activity in commercial development and housebuilding increased last month, while work on public projects continued falling but at a slower pace than previously.

The pick-up in two of the industry’s three key sectors meant growth returned in December following a three-month slowdown in activity.

The index, which follows the sector’s performance every month, reached 52 in December, indicating that the industry grew during the month.

Ulster’s PMI takes 50 as its benchmark. Any reading above that figure means that the industry expanded on the previous month, while any result below that shows that it shrank. November’s reading was 48.2.

Simon Barry, chief economist for the Republic at Ulster Bank, welcomed the return to growth in building last month.

“Indeed, following a three-month sequence of falling activity the headline PMI index rose sharply last month to get back to above the 50 breakeven level for the first time since August,” he said

“Reduced Brexit uncertainty was cited as a source of support for the increase in overall activity at the end of 2019, while the improvement also reflected better performance across the three main sub-sectors.”

Mr Barry noted that housebuilding grew in December, supporting a view that Brexit fears were behind the slowdown over the previous three months.

“Meanwhile, commercial activity saw a further acceleration in its rate of expansion last month, in the process remaining the fastest-growing sub-sector,” he added.

Housing activity reached 51.8 in December, indicating that activity in that sector grew. Commercial activity, which includes building offices, shops and factories, was 53.6.

Civil engineering, mostly comprising work on State-funded projects such as roads, schools and hospitals, returned at 43.1, indicating that activity in this area slowed.

Builders were more confident about the future in December than they had been for six months, Ulster Bank said.

Published Article

At a Glance: Office Market 2019 in Review

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With 3 transactions in excess of 100,000 sq. ft. take-up reached an impressive 1.2m sq. ft. in Q4. This brings the year-end total to 3.29m sq. ft. across 204 transactions. Full report to follow.

Eason to relocate Cork store after selling premises to Ashley company

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Books and stationery retailer Eason has sold its store on Patrick Street in Cork to a company connected with Sports Direct owner Mike Ashley, as part of a wider plan to relocate to a larger store in the city centre in 2021. Ownership of the store was held by Eason Holdings, which operates the retailer’s property portfolio. Eason Retail, a related entity that operates the network of shops, had 19 years left on its lease of the Patrick Street premises. The retail arm has negotiated an exit from the lease with the building sold to SDI (Cork) Ltd, an entity connected with Mr Ashley’s business empire.

Eason has told staff it plans to relocate the Cork shop to a purpose-built store, which is being sourced by estate agent Bannon. The staff will not be affected by the transition.

Leaseback deals

Last May, Bannon quoted €6.6 million for the Patrick Street property. This move is part of a wider drive by Eason to do sale and leaseback deals on some of its major properties. Eason opened the current 22,000 sq.ft store after acquiring the property from the ESB in 1986. Under the terms of the transaction, the retail business will continue to operate from the premises until next year.

Liam Hanly, managing director of the Eason Group said: “The sale of the Patrick Street property provides Eason with an opportunity to move to a new fit-for-purpose premises in Cork city centre that will meet the future needs of our customers and our employees. The decision is consistent with our strategy for growth for the business and responds to changing consumer behaviours in what is a very competitive and dynamic book market.”

Ciarán Hancock

Eason to relocate Cork store after selling premises to Ashley company

At a Glance: Investment Market Q4 2019

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The strongest ever quarter for the Irish investment Market with total turnover for Q4 2019 reaching a staggering €3.76bn and total turnover for the 12 months of the year in excess of €7bn. To put the quarter in context it is higher than the entire annual turnover of the last cycle peak in 2006 of €3bn+ and annualised smashes this cycles 2016 peak of €4.5bn. PRS remained the most active sector accounting for 41% of transaction value. Full Report to follow.

Blanchardstown Centre in line for €16.5m makeover boost

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Blanchardstown, one of the country’s largest shopping and leisure facilities, is to get a €16.5m interior design makeover.

Multi Corporation, the pan-European retail platform that manages the centre, hopes to transform the look of the popular north-west Dublin shopping destination.

The upgrade works, which are the first of their kind since Blanchardstown opened in 1996, are already under way, with a target completion in 2021.

They will be carried out in conjunction with the ongoing 5,000 sq.m extensions to include a new Aldi and a flagship JD Sports.

The interior works include new tiling, ceiling and wall finishes to give the centre an entirely new look and feel, according to management.

The works also include upgraded toilet facilities with enhanced provisions for disabled customers and families.

“We are delighted to be making this significant investment of €16.5m in interior upgrades for the centre,” said Pat Nash, managing director of Multi Ireland & UK.

“In keeping with our sustainability programme, all new lighting will be energy efficient. In total, the works will see the replacement and upgrade of 11,000 sq.m of centre interiors. It is going to totally transform the look and feel of the centre.

“The upgrades will significantly enhance the overall customer experience. And to ensure we are not disrupting anyone, construction work will take place outside shopping hours.”

Multi Corporation is a pan-European manager and re-developer of shopping centres and other retail assets in 14 countries.

It is owned by Blackstone, which acquired the Blanchardstown Centre in 2016 from Green Property for €945m, in one of the biggest property deals in the history of the State.

Blanchardstown Centre, which is visited by more than 16.5 million shoppers every year, has 112,000 sq.m of retail complexes, with more than 180 stores, including Debenhams, Marks & Spencer and Penneys, as well as restaurants and leisure facilities and a nine-screen cinema.

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Society of Chartered Surveyors - SCSI Ireland

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