Household Debt to Income

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Yesterday the CSO released a version of Ireland’s national accounts. It shows that Irish Households now have more savings than ever before (€139bn up €50bn since 2016) & the debt to income ratio has fallen by half in the last decade. We have gone from being the most personally indebted consumers in Europe to being in line with the EU average, despite a younger population and a higher propensity to own our own homes. In real money that’s €70bn less debt. Added together that’s a €120bn (€24k per capita) turnaround in the nett position before you factor any impact from the increase in the value of housing.

The current strength in spending we are witnessing in our retail management portfolio is therefore not surprising but it’s hard to find much coverage of this benign backdrop in press commentary which is drawing comparisons with 2006. Irish consumers couldn’t be in a more different place than in 2006.

Donegal Boardwalk Resort sells for more than €3.8m

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A 27-villa holiday resort in Donegal has been sold for in excess of the asking price of €3.8 million.

The Donegal Boardwalk Resort, situated on the Wild Atlantic Way, has been purchased by Melcorpo, a property group.

Overlooking Sheephaven Bay, the resort was brought to the market in June by Bartra, and comprises 27 holiday villas, a fully licensed seafront bar, restaurant and function room. The property includes 45 acres, much of which is still undeveloped.

The resort adjoins the spectacular 1km-long boardwalk which links it to Tramore Beach. The renowned four-star Rosapenna Hotel & Golf Resort is a neighbouring property.

With so many people holidaying at home in 2021, Donegal Boardwalk had “an exceptionally busy summer” with full occupancy in July and August and is expecting a very strong shoulder season ahead.

The bar, restaurant and function room building is leased. The bar and eatery trades as “Hooked” and is a sister operation to the nearby Old Glen Bar and Restaurant where Ciaran Sweeney, former head chef at Dublin restaurant Forest & Marcy, is now heading up the kitchen.

Interest

A spokesperson from Melcorpo said: “We are delighted to be involved with such a great holiday facility in a beautifully stunning part of the country. We are looking forward to working in partnership with the local team leader George Scott and Cormac Walsh of Hooked to develop the resort further to its full potential as a premier holiday destination on the island of Ireland”.

Donegal Boardwalk is located within a short distance of the popular north Donegal tourist villages of Carrigart and Downings and sits just 30km from Letterkenny.

It is within a three-hour drive from both Dublin Airport and Galway and a two-hour drive from Belfast.

Bartra, who purchased the resort in 2017, when it was guiding €2.6 million, upgraded all 27 holiday villas, which are in turn-key condition, fully fitted and presented to a very high standard. Each villa benefits from a private deck.

Paul Doyle of selling agent Bannon said there was “strong interest” in the property, demonstrating the demand for quality tourist assets in Donegal.

Niamh Walsh of TDL Horizons, who advised on the sale said: “The level of interest shown from investors and operators gives us great confidence in the tourism sector.

Following one of the most uncertain 18 months for the tourism sector this successful transaction highlights the level of demand for well located hospitality assets that can easily pivot to the staycation market”.

Article by The Irish Times

Quintain’s €500m investment in Adamstown gets under way

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Irish housebuilder Quintain has turned the sod on its €500 million urban hub investment in Adamstown, west Dublin, commencing construction on a 279-unit apartment development aimed at the build-to-rent market. UK grocer Tesco has also signed up as an anchor tenant at the development.

Called The Crossings, Quintain’s first phase of development at the new urban centre in Adamstown will include 279 apartments and more than 91,000sq ft/8,500sq m of space to house two major supermarkets, 20 retail units and five restaurant outlets, along with a multi-storey car park.

Quintain is the housebuilding unit of US private equity giant Lone Star, which has accumulated a massive Irish landbank.

Construction of the apartments has a completion date of mid-2023. Planning permission for a second phase of 185 apartments has been granted and further phases are planned for submission in late 2021 and early 2022.

Quintain has a buyer lined up for the first tranche of its buy-to-rent scheme but Eddie Byrne, joint managing partner with the developer, says “it’s too early to say who it is”.

New urban centre

Getting this forward funding is key to the construction of such a developments, he says. “You really need to be able to have a buyer lined up in advance.” The Crossings will form an integral part of a new urban centre at Adamstown, which, over the next four to five years, will see the construction by Quintain of almost 1,000 residential units, mostly apartments/duplexes, with a “very small number of houses”.

On the retail side, Tesco has signed a lease for a 40,000sq ft/3,700sq m store, which is set to open in January 2023, with a second leading supermarket anchor store set to open a

Bannon has been retained as agents for the leasing of the retail units, which will serve an estimated potential shopping population of more than 100,000 people drawn from Adamstown, and the neighbouring suburbs of Lucan, Celbridge and Leixlip.t the same time.

To date, Quintain and its affiliates have built 1,000 homes in Adamstown, with over 85 per cent occupied by first-time buyers, launching developments such as Tandy’s Lane and Somerton.

Earlier this year it received planning permission to construct 235 new homes at Aderrig in Adamstown, to include 159 houses and 76 apartments. The scale of its total investment in the area is expected to be north of about €3 billion.

Green open space

In June, Quintain completed and transferred ownership to South Dublin County Council of Tandy’s Lane Park, which will provide local residents with easy access to green open space. Another 27-acre green open space – Airlie Park – is set to open by the end of the year and will include a cricket pitch and Astroturf pitches, while a two-acre village green will provide a centre piece for The Crossings development.

Michael Hynes, joint managing partner with Quintain Ireland, said, “This investment will contribute to the social fabric of the area, and is supported by the handover of Tandy’s Lane Park to South Dublin County Council. We are very confident in the strong level of demand there is to live in the area, which will be boosted by the new amenities we are delivering.”

Quintain owns 220 acres in the Adamstown/Lucan area, where it plans to develop up to 5,000 new homes and 250,000sq ft of commercial space. The company’s broader land portfolio covers 460 acres of prime assets in Ireland at Adamstown, Clonburris, Portmarnock, and Cherrywood.

Adamstown was launched in 2005 as Ireland’s first new planned town since Shannon, Co Clare, in the 1960s.

Article by The Irish Times 

Shop Local

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The retail industry in Ireland employs c285,000 people. That is 12.5% of the working population. As leaders in the sector, we are very proud at Bannon to manage over 50 shopping destinations across the country. These destinations are home to over 1,100 businesses who in turn employ 10’s of thousands of local people. Supporting trade locally is supporting your local community. As we reset after COVID, make the right choice, shop local.

Consumers prefer real-life shopping experiences, says leading Irish retailer

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Retail is back and it’s here to stay, says Christine Dolan of Quayside Shopping centre in Sligo Town.

The centre manager believes that the majority of Irish consumers prefer the social experience of a trip to the shops over the convenience of e-tail.

She told the All-Ireland Business Times that Quayside is busier than ever.

“I think people have missed coming into the shops”, she said. “It’s a totally different experience to shopping online.”

“People love the social aspect of a day out shopping and I think most people are sick of the virtual experiences – there are a lot of people who have been quite lonely through the pandemic and you can’t beat meeting up with friends for a lunch date while having a browse through the shops.”

“There’s a great buzz around at the moment and people are starting to mix again and enjoy themselves.”

A 2020 report by Deloitte found that retail is Ireland’s largest industry and the largest private sector employer, employing almost 300,000 workers – with three in four of those employed based outside of Dublin.

Quayside Shopping Centre opened its doors in 2005 as the largest shopping centre in the northwest of Ireland.

With 130,000 feet of floor space the centre boasts 43 retailers including TK Maxx, Lifestyle Sports and Next.

Quayside lost two retailers over the pandemic, one of them was a Carphone Warehouse store which was a casualty of the Group’s decision to close 80 stores in Ireland last year.

Christine revealed that units have since been filled by two new tenants with more set to come on board.

While Christine admits that competing against online retailers will be a tough challenge in the years to come, she is not worried about the long term future of her industry.

“What we’ve proven here time and time again is that we are resilient.”

“We’ve been through a recession and we’ve come out stronger on the other end so I have no doubt that we will get back to where we were pre-pandemic.”

“In fact, I think we’ll be in a better place.”

According to the Central Statistics Office’s Retail Sales Index retail sales increased by 3.3% in June this year compared to May on a seasonally adjusted basis. On an annual basis, retail volumes were 10.6 per cent higher than in June last year.

Interestingly the retail sales figure for June this year was 13.4% higher when compared to two years earlier, before the Covid-19 pandemic.

Quayside Shopping Centre recently landed its third Business All-Star Accreditation in recognition of its contribution to retail in Ireland.

Reacting to the news, Christine said: “I am delighted to be part of an ambitious All-Star Business. To be accredited for the third year in a row is a huge honour and I see it as recognition of the hard work that goes on behind the scenes.”

Quayside’s focus over the next few months is to promote the “shopping centre experience” and Christine revealed that the centre will be introducing an initiative to help local craftspeople and creators.

She said: “We have plans to relaunch our very successful Christmas markets and hope to do this a little bit early this year. The markets provide a wonderful opportunity for local traders who may have been out of work the last while and want the chance to set up a pop up shop or trading stall.”

“We really want to celebrate with our customers and give something back to the local community this year.”

To learn more about Quayside Shopping Centre Sligo, visit their All-Star showcase page here.

Article by All – Ireland Business Times

Hines completes acquisition of final phase at Chatham & King

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International real estate firm Hines has formally acquired the second phase of Chatham & King, a new high-profile mixed-use scheme next to the Gaiety Theatre on South King Street in Dublin city centre.

Hines’s acquisition of the 3,950sq m (42,500sq ft) portfolio marks the culmination of the €165 million deal it agreed with US private equity giant Lone Star for the wider Chatham & King development in 2018. In acquiring the scheme, Hines fended off three rival bids. Two of the competing offers came from German funds, while the third bid came from the billionaire founder of the Zara fashion chain, Amancio Ortega.

In securing ownership of the development, Hines gained immediate control of a mixed-use building with retail units comprising 3,112sq m (33,500sq ft) occupied by Zara, H&M and Warehouse, along with 2,879sq m (31,000sq ft) of overhead office space occupied by data analytics management firm Qualtrics as its European headquarters.

The second phase, which has now been completed by Lone Star, comprises six residential units, five retail units totalling 1,486sq m (16,000sq ft) and 2,461sq m (26,500sq ft) of office space which will be occupied by Qualtrics. The €40 million cost of developing the new building on Chatham Street and Clarendon Row was included as part of the €165 million deal agreed on behalf of Hines European Core Fund (HECF) in 2018.

Negotiations

Hines says that negotiations are at an advanced stage on each of the five new retail units, which range in size from 46sq m (495sq ft) to 1,178sq m (12,680sq ft). The incoming tenants will sit alongside the existing tenants, which include Zara, H&M and Apple-reseller CompuB, which recently signed a new lease for a 315sq m (3,400sq ft) retail unit on South King Street.

The Chatham & King scheme has a prime location next to Grafton Street and St Stephen’s Green, and sits within close proximity to the Westbury Hotel and the new Dublin headquarters of the European Parliament, which is scheduled for completion in November 2023.

Simone Pozzato, managing director and deputy HECF fund manager at Hines, said: “The acquisition of phase two of Chatham & King completes the final element of this portfolio and marks the delivery of an LEED-accredited asset in the Dublin office and retail sector at an opportune time. The property is an excellent fit for HECF given its central location in Dublin, a city which continues to show strong economic growth.

“We are already encouraged by the promising engagements to date from some very exciting retail brands who would be ideally suited to this prestigious shopping district. We hope to have further announcements in this regard in the near future.”

Peter Lynn, director with Hines Ireland, added: “We are delighted to make this timely announcement as Dublin city centre continues to reopen and as Chatham Street itself has recently undergone a significant transformation with Dublin City Council’s pedestrianisation programme. Chatham & King is a high-quality addition to this historic street and our new retail spaces will represent a significant enhancement to the city’s most fashionable shopping district. We are also equally excited to be working with Qualtrics as our lead office occupier as they continue on their growth story.”

Article by The Irish Times

Consumer Sentiment Index

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Irish consumer sentiment is at a two-year high following a modest 1.6% monthly increase in June. This increase brings the index back in line with the 25-year average of the series suggesting sentiment has been normalised. This is further supported by the fact that June marks the fifth successive monthly increase in the index, the first time that has happened since the beginning of 2007. These results suggest that Irish consumers are becoming less concerned about their current circumstances and less fearful about the future which bodes very well the retail sector. Furthermore, trends over the past decade show consumer sentiment as a very accurate leading indicator of retail sales.

Bannon Shopping Centre Footfall (2019, 2020, 2021)

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There is an air of positivity coming from our shopping centre & retail park management teams across the country. It has been great to see the rebound in footfall since full reopening of our portfolio on the 17th of May last. The first three weeks since reopening have seen weekly footfall jump back to 86% of the levels seen in 2019. What’s much more significant is the number of retailers reporting May 2021 sales information (a total of 14 days) being ahead of May 2019 (31 days). There is no question that retailers need to see a sustained period of brisk trade but the data so far is pointing in the right direction.

Retail park portfolio’s €78m sale tests investor appetite

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With online shopping having come into its own following the unwelcome arrival of Covid-19, the sale by New York-headquartered Marathon Asset Management of three of Ireland’s best-known retail parks is set to test the post-pandemic appetite of investors for traditional bricks-and-mortar retail.

The Parks Collection is being offered to the market individually or as one lot by joint agents Cushman & Wakefield and Savills at a guide price of €78 million. The portfolio comprises Belgard Retail Park in Tallaght, Dublin 24, the M1 Retail Park in Drogheda, Co Louth, and Poppyfield Retail Park in Clonmel, Co Tipperary.

While the sale of the entire offers the prospective purchaser the opportunity to secure a collection of strongly-performing retail parks and an attractive net initial yield of 8.43 per cent, the portfolio’s assets are expected to see interest on an individual basis also.

Belgard Retail Park, for its part, is regarded as one of the foremost retail parks in the capital. Located on the Belgard Road in Tallaght and 11km from Dublin city centre, the scheme comes for sale fully-occupied and anchored by B&Q, the largest home improvement and garden centre retailer in the UK and Ireland. Other occupiers include Homestore & More, Dealz, Carpet Right, Halfords, Right Style Furniture, Burger King and Starbucks.

While the scheme currently extends to 12,728sq m (137,000sq ft) with 482 car parking spaces, it has planning permission for an additional retail warehouse unit of 2,404sq m (25,877 sq ft) over two levels with 1,409 sq m (15,166 sq ft) of ground-floor space and 995sq m (10,710sq ft) of retail warehouse/storage space at mezzanine level.

The total current rent is about €3.13 million per annum with a weighted average unexpired lease term of 7.3 years. B&Q contributes around 67 per cent of the income on a lease until 2028 with an upward-only rent review clause.

The M1 Retail Park is located 3km west of Drogheda town centre and just off the M1 motorway connecting Dublin and Belfast. It comprises a mix of retail, office and leisure accommodation extending to a total of 24,805sq m (267,000sq ft), along with 600 car-parking spaces. The majority of the development is taken up by retail and leisure (89 per cent) and is anchored by Woodie’s DIY who occupy 4,885sq m (52,585sq ft). The park’s other tenants include Smyths Toys, Sports Direct /Brand Max, Dealz, Equipet and EZ Living amongst others.

The total current rent is €2.44 million per annum with a weighted average unexpired lease term of 8.4 years. Woodies (with lease guarantees from Grafton Group plc) contributes around 40 per cent of the income on a lease until September 2030 with upward-only rent reviews.

The scheme also includes Mellview House, a four-storey building comprising 25,048sq ft of office space, a 30,483sq ft gym at ground floor, basement and mezzanine levels operated by Gym Plus and a number of other smaller retail units. Another building known as the Pavilion is home to Costa Coffee and TC Matthews with a recent new letting to Lanu Medi Spa.

An additional site adjacent to M1 Retail Park also forms part of the Parks Collection sale. The land extends to 27 acres and comprises three adjoining plots with proposed zoning under the Draft Louth County Development Plan 2021-2027 for three uses, namely ‘A2 New Residential’, ‘ C1 Mixed Use’ and ‘ B4 District Centre’.

99% occupied

Poppyfield Retail Park is located 2.5km from Clonmel town centre at the junction of the Cahir Road and the N24. Developed in 2004, the scheme extends to 12,821sq m (138,000sq ft) and comprises a mix of 14 retail warehousing units, a neighbourhood centre and 393 car-parking spaces. The park is 99 per cent occupied and anchored by Woodie’s DIY (with a lease guarantee from Grafton Group plc) and SuperValu. Other high-profile tenants include Harry Corry, Maxi Zoo, EZ Living, World of Wonder and DID Electrical. The neighbourhood centre is occupied by Costa Coffee, Sam McCauley, along with a hair and beauty studio and fish-and-chips operator. KFC also have a drive-through at the entrance to the park which does not form part of the sale.

The total current rental income is €1.43 million per annum and the weighted average unexpired lease term is seven years. Woodie’s and SuperValu contribute around 52 per cent of the income, and have seven and eight years remaining on their respective leases.

Marathon Asset Management acquired the M1 and Poppyfield parks originally as part of a larger portfolio in 2014, which also included The Park, Carrickmines; Lakepoint Retail Park, Mullingar; and the Four Lakes Retail Park in Carlow. Belgard Retail Park was acquired separately.

Marathon has undertaken significant asset management and phased disposal of these assets since then. The latest sale from its Irish retail portfolio was completed only this week and saw a private high net worth investor paying close to €7 million to secure ownership of Lakepoint Retail Park in Mullingar.

The scheme, which is anchored by Woodie’s DIY, is generating total rent of €516,000 per annum giving the purchaser an initial return of just under 7 per cent. The deal was brokered on Marathon’s behalf by Rod Nowlan of Bannon while Declan Bagnall of Bagnall Doyle McMahon represented the purchaser.

Article by The Irish Times 

Bartra seeks €3.8m for Donegal Boardwalk Resort

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Developer Richard Barrett will be hoping the reopening of the country and the much-anticipated return to growth of the tourism sector will help to drive the sale by his company, Bartra, of the Donegal Boardwalk Resort.

Situated overlooking Sheephaven Bay and at the heart of Ireland’s Wild Atlantic Way, the complex is being offered to the market by agent Bannon with the tourism expertise of Niamh Walsh from TDL Horizons at a guide price of €3.8 million.

The Donegal Boardwalk Resort is a successful trading asset comprising 27 holiday villas arranged across three cul-de-sacs. All 27 units have all been recently upgraded by Bartra and are in turn-key condition, fully fitted and presented to a very high standard. Each villa benefits from a private deck/patio.

The resort also includes a fully-licensed seafront bar, restaurant and function room. The subject property comes with a total of 45 acres, much of which is still undeveloped.

The resort adjoins the spectacular 1km-long boardwalk which links it to Tramore Beach. The renowned four-star Rosapenna Hotel & Golf Resort is a neighbouring property.

The development is located within a short distance of the popular north Donegal tourist villages of Carrigart and Downings and sits just 30km from Letterkenny. It is within a three-hour drive from both Dublin Airport and Galway and a two-hour drive from Belfast.

As the tourism sector begins to reopen this month, the villas are all fully booked for the months of June, July and August and look very promising, according to the selling agent, for the “shoulder season” to follow.

The bar, restaurant and function room building is currently leased. This popular bar and eatery trades as “Hooked” and is a sister operation to the nearby Old Glen Bar and Restaurant.

Paul Doyle of Bannon says: “We are delighted to bring this very special resort to the market on behalf of Bartra. With its location on the Wild Atlantic Way, the resort has become a huge hit for staycations. Donegal Boardwalk Resort has the potential for continued growth by expanding trade further into the increasing shoulder season. There are undeveloped lands within the overall 45 acres which offer further potential, subject to planning permission.”

Niamh Walsh of TDL Horizons commented: “Every angle of the Donegal Boardwalk Resort offers captivating views of the Atlantic coastline and the stunning sights dotted along it. Within a short drive you have the Atlantic Drive, Fanad Lighthouse and Glenveagh National Park. Visitors can experience world-class food in the locality from Fisk Seafood Bar to the Old Glen Bar and Restaurant where Ciaran Sweeney, the former Forest & Marcy head chef, is now heading up the kitchen. The potential is immense.”

Article by The Irish Times 

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