The retail sector dominated turnover this quarter, accounting for nearly 50% of transactions, with Bannon involved in most deals. Geopolitical uncertainties have impacted larger transactions, especially in the office sector. However, robust activity in the sub-€15 million market is expected, driven by French funds and high-net-worth individuals.
To view the full report, please click here.
Great for the Bannon team to have been involved at multiple levels in such an important sale for the Irish market. Congrats to Oaktree Capital Management, L.P. and to the Sigma Retail Partners team. Wishing the new owners Realty Income Corporation all the best with this exciting portfolio!
Prime McDonald’s drive-thru units in Shannon and Cavan are now available for sale, offering investors stable and long-term returns.
Brian Morton of Bannon says: “These prime drive-through restaurants offer the chance to attain an investment with stable and long-term returns. The strength of the tenant covenant along with the assets’ strategic location will make this opportunity highly appealing to any potential investor.”
Great food and a stunning location, we had the pleasure of inviting our friends and connections to our annual lunch at the Gray D’Albion Beach Restaurant during the MIPIM Exhibition yesterday afternoon.
Thank you to our guests for making it memorable and we look forward to coming back again next year.
Now that the property investment market has “survived until ‘25″, what actually happened in the year just past and what does the future hold? See Bannon’s 2024 Investment Pulse which includes an outlook for the year ahead.
To view the full report, please click here.
Bannon is delighted to issue our Q3 Capital Markets report which is all the more relevant today, the first day of EXPO REAL (Messe München).
With retail representing one third of turnover this quarter (and Bannon having sold, bought, or now managing 97% of all these assets), what better time to reach out to the leading firm in Irish retail and Ireland’s largest indigenously owned commercial agency.
Contact Neil Bannon or Roderick Nowlan for an EXPO chat.
To view the full report, please click here.
Bannon, as joint agent with Cushman & Wakefield on The Square Tallaght (one of Dublin’s five major M50 retail schemes), are thrilled to have sourced the buyer for this landmark sale and overseen it past the finish line.
Congratulations to Shane Scully and the team at Eagle Street Partners on their purchase.
A surprisingly positive set of Capital Market figures this quarter, suggesting the shifting interest rate backdrop is starting to prompt renewed interest in real estate. Check out this quarter’s turnover statistics in detail and if you have any questions don’t hesitate to contact any of the Capital markets team including Roderick Nowlan, Brian Morton and Cillian O’Reilly.
To view the full report, please click here.
A disappointing quarter but our Capital Markets director Roderick Nowlan is calling the bottom of the market at least in terms of transactional activity. Check out our latest investment pulse below.
To view the full report, please click here.
2023 was very much “annus horribilis” in terms of capital market’s activity. Concluding with a total turnover of €1.85 billion it represents the lowest level of activity since 2012. Clearly the pricing uncertainty brought about by the ending of the free money era, driven by a multitude of geopolitical and economic factors, has had the biggest effect.
See our latest Capital Markets report with analysis of both the past quarter and the year as a whole plus insight from our Capital Markets Director Roderick Nowlan.
To view the full report, please click here.
In early September I had the privilege of joining Bannon as a Graduate Surveyor. Having completed my internship in Bannon in third and fourth year as part of my Property Economics degree I was already familiar with the office setting and the familiar faces. The positive and friendly atmosphere made this transition seamless. Starting any job can be daunting but I have felt that in Bannon they have been very supportive in every way to help me settle into professional life.
I joined the Capital Markets and Office teams working alongside Rod Nowlan, Lucy Connolly and Julia Halpenny. Having previously worked in this area during my internship I was aware of the fast-paced industry of the investment world. From shopping centres to Georgian offices, I was well exposed to the different avenues of the property industry as well as gaining invaluable experience from my colleagues. It was very satisfying applying theory to practise moving from college to the working world as well as meeting new faces along the way and learning from their past experience.
Throughout my final year of college, I was always supported by my colleagues in Bannon who helped me throughout the year with advice for my thesis and various projects, their support was very reassuring in what proved to be a very stressful academic year. This help has been very much continued as I move into the next stage of my career as I have been assured that if I need anything, they are always there to guide me.
The positive culture in Bannon as well as the friendly and intelligent professionals that work here have definitely played a part in developing my growing knowledge of the property industry as well as helping build my character as a person. I am very grateful to Bannon for the opportunity and I look forward to continuing to work with the great Bannon team!
Author: Brian Morton, Graduate Surveyor, Bannon
Date: 17th October 2023
There were two key takeaways from this quarter’s Capital Markets figures. First and foremost, for the first time in almost a decade there were no material PRS transactions. The second was that two purchasers, specifically Davys and French Fund Corum, accounted for almost 50% of the entire quarter’s market turnover with the acquisition of 10 separate assets.
To view the full report, please click here.
The second quarter proved to be a challenging period for the Irish capital markets sector, with a total value of only €333 million invested. This marks the weakest performing quarter (and half year at sub €1 billion) in the last six years.
This lacklustre landscape can be attributed to three key factors: the end of “free money” as interest rates rise and inflation runs rife, the post-Covid impact of remote and hybrid working on office space demand, and concerns surrounding necessary capital expenditures for ESG (environmental, social and governance) retrofitting amidst rising construction costs.
However, after years in purgatory, it is the retail sector that has emerged as the star performer this quarter, accounting for 38.7 per cent of turnover. Although this performance is partly supported by the downturn in other sectors, there is no doubt that a significant perception shift has occurred, particularly in the retail park segment.
Notably, six retail parks have traded this quarter alone amounting to approximately €116 million including Liffey Valley B&Q, City East, Blackwater, Carlow, Newbridge and Waterford.
The most high-profile of these, Liffey Valley B&Q, which traded to French fund Inter-Gestion REIM for €26.6m, has thrown off a particularly strong equivalent yield in the mid to late 5 per cent range for an asset with a lease that has less than four years to run. This process saw participants such as Realty, Corum and Iroko compete for the asset.
So, what has driven this remarkable change in fortunes?
The “newfound” popularity of the retail sector can be attributed to a slow but building appreciation for what have been long-standing dynamics in both the supply and demand side of the sector. These dynamics differ considerably from the UK and US markets, where Irish retail investor sentiment used to originate.
Unsurprisingly, that core of the demand has shifted to both domestic family offices and a more central European focus where an appreciation for the fundamentals has shown through.
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Since 2011, when the last new shopping centre was completed in Ireland, there has been minimal net additional retail supply. This stands in stark contrast to the substantial expansion witnessed in the office, residential, and industrial sectors.
However, during this period, the number of people employed in Ireland has surged by 37 per cent, retail sales volumes have increased by 38 per cent, and Irish households’ net worth has reached new heights. These are all factors which feed the fundamental sustainability of the retail sector.
When considering the cumulative impact of debt reduction, increased savings, and rising house prices, Irish households are wealthier than ever before, with a net worth surpassing €1 trillion for the first time.
This surpasses the 2007 peak level of €716 billion, which was actually exceeded in the final quarter of 2017. Furthermore, Ireland’s gross debt-to-household income ratio has transitioned from over 200 per cent of the European average in 2011 to being below that European average today.
Combining these fundamentals with the historical correlation between inflation and the growth of retail rents and values, the renewed interest in the sector becomes apparent.
As highlighted by the turnover statistics, retail parks, in particular offer a compelling proposition. They benefit disproportionately from household growth and have proven resilient during economic downturns and the challenges posed by Covid-19.
Additionally, their ability to meet ESG requirements through initiatives like PV panels, rainwater collection, and other environmental measures adds value and attracts investors including new entrants. Similar attributes for high-street properties and grocery-led necessity retail are likely to see further interest in these sectors.
We expect to see numerous quality high-street trades in the third quarter and generally as the environmental benefits of the “centralised-distribution model” reflected by retail warehouses, shopping centres and Ireland’s key high streets becomes apparent.
We are seeing a complete return to pre-Covid footfalls for most the of the regional and necessity-focused schemes with Dublin’s two high streets hitting pre-Covid weekly footfall levels again for the first time last month.
As a consequence, we expect the sector to continue to outperform for the coming quarters with no less than seven shopping centres amounting to over €100 million in value due to trade within the next few weeks.
Rod Nowlan is an executive director at Bannon and heads up its office and capital markets team
This quarter proved to be a challenging period for the Irish Capital Markets sector, with a total value of only €333m. Q2 marks one of the worst performing quarters in the last six years. On a positive note, after years in purgatory, the retail sector has emerged as the star performer for the period, accounting for 38% of turnover. Although this quarter’s relative increase is partly supported by the downturn in other sectors, there is no doubt that a significant perception shift has occurred, particularly in the retail park segment where no less than six retail parks have traded this quarter alone amounting to approx. €116m.
To discuss this, please contact Roderick Nowlan, Alex Patterson, Cillian O’Reilly and George Colyer.
Bannon are proud to bring the Griffeen Centre in Lucan, Dublin to the market for sale. This resilient neighbourhood centre comprises a strong mix of local services with a Centra (Musgraves Ltd.) anchor in the heart of a highly populated west Dublin suburb.
Please contact Roderick Nowlan & George Colyer at +353 (1) 647 7900 for more information.
The effect hybrid working and ESG has, or will have, on office demand from office occupier, investor and owner standpoints cannot be considered in isolation. These influences must be considered within the wider office market ecosystem and how they operate in tandem to drive occupier decision making at lease event dates. The Covid Pandemic brought an instantaneous change to how we work whereas ESG requirements and regulations have been coming into the market at a steadier rate. While there is also uncertainty around the future of working models, that can be adapted and changed rapidly, there is no uncertainty about the increasingly important and dominant role ESG will play in the office sector. The ESG roll out will be slower and changes can be anticipated, however the ability to bring the stock to standard is a far more timely and resource intensive exercise.
Hybrid working for businesses will effectively assess how staff utilise office space as a resource to produce output. Ultimately it is the company who can decide how to implement their working models and the decisions will be led by the type of work carried out by the business, the need to attract and retain talent and the model that allows the business to grow and produce output efficiently. Both staff and workspace are a factor of production for a business and how the two are utilised against each other effectively to generate product should ultimately be the key focus of any commercial business. This should craft the post-pandemic workplace in the years ahead and this will likely differ industry by industry.
ESG considerations will continue to become more prominent drivers in the decision-making process for both occupiers, owners and investors. Currently, ESG in commercial real estate is very much lead by the private and financial markets, with factors such as corporate mandates and lender requirements influencing the demand for ESG grade space. It is envisaged that the regulatory environment (in an EU context) around occupation and investment will become more scrutinous and this will further drive the demand (and requirement) for ESG grade space in the future.
Occupiers will be looking into the impacts, whether they be positive of negative, that revised working models have on their ability to create an attractive and productive workspace as well as any ESG led requirements that are being implemented on a company specific or regulatory basis. The implementation of these will likely crystallise at either a lease break or expiry where spatial requirements can be most practically revised. Property owners will have to be cognisant of their occupiers’ requirements against key lease dates and how these correspond with asset management strategies to protect both the rental and market value of the building. Alternatively, investors must consider how to preserve or improve on an asset’s income at purchase or where opportunities may lie in bringing brown buildings into a green market.
Bannon have a suite of services available to assist CRE owners, occupiers and investors in strategic real estate decisions and ESG insights. Please feel free to reach out to discuss by emailing consultancy@bannon.ie.
Author: George Colyer, Surveyor, Bannon
Date: 16th June 2023
The Q1 2023 Bannon Investment Pulse is now available providing a succinct summary of the Capital Markets transactions starting off the year.
With the Residential sector a surprising resilient highlight the total turnover of €625m is reflective of the current subdued sentiment in the market.
For more information or to talk on the opportunities available please get in touch; Roderick Nowlan, Alex Patterson, George Colyer, Cillian O’Reilly
For the property sector, while one of strongest capital market years on record (second only to 2019), 2022 will be best remembered as the “year of reckoning”. A year where a mixture of macro-economic and geopolitical issues combined to commence rebasing the market following almost a decade of effectively zero interest rates, low inflation, and expansive monetary policies.
To view the full report, please click here.
For the property sector, while one of strongest capital market years on record (second only to 2019), 2022 will be best remembered as the “year of reckoning”. A year where a mixture of macro-economic and geopolitical issues combined to commence rebasing the market following almost a decade of effectively zero interest rates, low inflation, and expansive monetary policies.
See the high-level Bannon summary of 2022 in Bannon’s first Investment Pulse of 2023!
The Irish Commercial Real Estate (CRE) sector performed strongly in Quarter 3 with over €1.77 billion invested in Irish commercial property across 47 transactions. This figure was underpinned by the Ronan Group’s sale of the Salesforce HQ on Spencer Place and a 204-bedroom hotel for €500 million, the largest transaction by some margin. Annual turnover will significantly exceed €5bn for 2022 and establish the second strongest year on record after 2019.
To view the full report, click here.
The H1 Bannon capital markets report is out now and worth a read as Roderick Nowlan feels certain sectors are passing an inflection point….
To view the full report, please click
Strong outturn for H1 in the Irish CRE sector with total turnover breaking €3bn with the benefit of a €1.1Bn Hibernia REIT deal.
While the traditional retail sector continues to evolve in response to the challenges presented by the rise in online shopping and the questions posed by the Covid-19 pandemic, the presence of two of Ireland’s most successful and resilient brands as anchors coupled with significant rental income from a strong tenant line-up is expected to attract interest from both domestic and international investors in the sale of the Marshes Shopping Centre.
The Dundalk scheme — acquired by its current owners, American real estate firm Kennedy Wilson, for €44.5 million in 2014 — is being offered to the market by joint agents CBRE and Bannon at a guide price of €33.5 million.
Anchored by a 71,600sq ft Penneys and a 116,500sq ft Dunnes Stores (grocery and drapery), the Marshes Shopping Centre has consistently delivered robust trading and occupancy levels and proved resilient through the Covid-19 pandemic. The scheme is approaching a 100 per cent occupancy rate with its two remaining vacant units currently the subject of negotiations with prospective occupiers. Outside of its anchor tenants, the centre is generating a net operational income of about €3.4 million per annum from leading retailers including Boots, H&M, Eason and JD Sports. Some €400,000 of this income is being derived from the scheme’s surface car park, which also offers development potential according to the selling agents. The guide price of €33.5 million reflects a net initial yield of 9.2 per cent and a capital value of €233 per square foot.
Built originally in 2005 at a cost of €120 million, the Marshes Shopping Centre boasts a diverse national and international tenant mix including grocery, necessity retail, fashion, and food and beverage distributed across a lettable area (excluding anchors Penneys and Dunnes Stores) of 13,366sq m (144,000sq ft) on a site of 27.6 acres. The scheme has a prime location in Dundalk town and is widely regarded as one of the foremost retail centres for the wider northeast region.
In the short term, the investment offers the purchaser strong and sustainable rental income with multiple asset-management and income-growth opportunities including leasing up the remaining vacant space (last two units). There are a number of redevelopment options available also subject to planning permission, according to the selling agents.
Commenting on the sale, Roderick Nowlan, director at Bannon’s capital markets division said: “The acceleration of change within the retail sector, driven by Covid, has highlighted the strength of strong regional centres, especially those with robust grocery and necessity retail anchors as well as internet-resilient occupiers such as Penneys and Dunnes. The strong rent and service charge collection performance of this asset reflects this position.”
Kyle Rothwell, executive director at CBRE’s capital markets division, added: “We anticipate strong interest for Marshes Shopping Centre. The centre is performing exceptionally well and is supported by two very strong anchors and a complementary tenant mix. This scheme will appeal to those who are looking to complete short-term asset management and subsequently benefit from a fully let scheme.”
While it is still too soon to quantify the impact of the geo-political and macroeconomic backdrop on the Irish commercial property market, based on the Q1 figures and advanced pipeline transactions we anticipate that 2022 will still become one of only three years to record a turnover in excess of €5bn.
To view the full report, click here.
A steady start to 2022 for Irelands Commercial Property Market despite the geopolitical backdrop posting a Q1 turnover of €759.4m beating both the Q1 2019 and Q1 2020 figures.
Agent Bannon is guiding a price of €1.9 million for a community retail investment opportunity comprising four retail units and a standalone creche at Adamstown in west Dublin.
The units, which are below a modern residential development called the Sentinel Building, are occupied by Londis (with a guarantee from parent company BWG), Mizzoni’s Pizza and Pamper Yourself, together with one small vacant unit. The creche is operated by Giraffe Childcare. All of the units are presented in excellent condition throughout and benefit from prominent road frontage.
The annual passing rent is currently €163,375 with substantial reversionary potential. The asking price offers the prospective purchaser an attractive initial yield of 7.84 per cent, rising to a potential double-digit yield on the letting of the vacant unit and the settlement of the outstanding Londis and creche rent reviews. The properties extend to a total floor area of 15,264sq ft and have a weighted average unexpired lease term (Wault) to break of 6.43 years and a Wault to lease expiry of 8.72 years.
The subject units are in the southeast of Adamstown and 750m from Adamstown train station. The surrounding area is predominantly in residential use with a mix of high- and low-density housing. Current population estimates suggest a resident population of about 5,000 and once fully complete this is projected to be 25,000 people.
Ros Tierney of Bannon expects to see “significant interest from investors seeking a high-profile grocery and necessity portfolio with value-add potential through asset management”.
Pan European investor and asset manager M7 Real Estate has paid just under €15 million for two office blocks in south Dublin.
Developed in the late 1980s as part of the wider Merrion Shopping Centre scheme, the Nutley and AIG buildings comprise an overall floor area of 4,016sq m (43,235sq ft) along with 83 undercroft car parking spaces. The subject property is currently generating total rental income of €1,439,932 a year.
The Nutley Building is let to a number of occupiers including Bonkers Money, the Japanese Embassy, the Austrian Embassy and Global Standards while the AIG Building is let to a single tenant with a number of sub leases in place.
While The Irish Times reported that the deal for the two offices was close to being finalised in October 2020, it is understood the proposed transaction was completed only in recent weeks. Commercial real estate consultants Bannon handled the sale.
Following its latest purchase, M7’s Irish portfolio now comprises 18 assets extending to just under 1,100,000sq ft, primarily in industrial and logistics space.
In October 2020, the company paid about €13.5 million for the long leasehold interest of five fully let units at the Sandyford Business Centre in south Dublin.
The purchase of the portfolio gave it control of five of the scheme’s 10 units along with an associated provision of 200 car parking spaces. The portfolio’s office accommodation covers a combined area of 4,532sq m (48,786sq ft) and is producing annual rental income of €1,192,578 with a weighted average unexpired lease term of 5.8 years, with breaks at 4.6 years.
In August 2020, the company paid €6.25 million for the former Kildare headquarter office and distribution facility of convenience store operator ADM Londis, while in January 2020 it acquired the Primeside Park industrial estate in Dublin for €6.75 million.
The group also controls the Century Business Park in Finglas, which it acquired for €4.47 million in September 2019, and the Westlink industrial estate in Dublin 10, which it bought for €13,870,000 in 2018.
Its first investment here came in 2017 when it bought Fumbally Lane, a combined office and residential development in Dublin 8 which was on the market for €24 million. M7 sold Fumbally Lane to BCP Asset Management in 2018 for €33.5 million, following the completion of a comprehensive asset management programme which enabled the property’s vacancy rate to plummet from 17 per cent to 2 per cent through the addition of 19 new tenants, and its annual rental income grow by €1.14 million.
M7 operates across 14 countries. It manages a portfolio of about 835 retail, office and industrial assets with a value of about €5.1 billion.
The Bannon snapshot shows an exceptional year for PRS with almost 42% of turnover (despite a weak Q4) and the wider market as a whole showing the second-highest annual turnover on record. 2022 likely to see the resurgence of retail and consolidation of sheds!
Some of the Bannon team inspecting Fitzwilliam 28 this week which is nearing PC. The new ESB Headquarters raises the bar for sustainable office development in Ireland. Proud to have been part of the team to bring this exciting development to fruition since 2011.
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”.
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.
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.
The Bannon Capital Markets snapshot highlights that the Retail Sector has finally emerged from the shadows at 14% of Q3 turnover of €794m …..but PRS remains the dominant player @ 50%. While Q3 was always going to struggle to match the pent up demand that emerged in Q2 @ €1.5bn, the outlook remains very strong. There is approx. €1.3bn on the market or at agreed stage which leaves our projection of €4.5bn for 2021 intact, an annual out-turn that will only have been surpassed once (in 2019)!
Five Lamps Spar store guiding at €900,000.
Ros Tierney of Bannon says: “We expect to see significant interest from pension investors. This is a high-profile, resilient property with a tenant who has performed strongly throughout the Covid-19 pandemic. The investment offers the purchaser an attractive yield and a long lease term.”
Despite the backdrop, another very strong quarter in the Capital Markets with the private rented residential sector leading the charge as usual. Based on pipeline supply 2021 turnover looks set to be the 2nd strongest year of all time! See Bannon quarterly snapshot.
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.
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.”
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.
Despite the backdrop of Covid 19, Q1 turnover was a healthy €1.22bn, with 58% weighting to the residential sector. Strong demand in the sector for good product continues on a standing asset and forward commit basis. With restrictions on travel / viewings still in play the more traditional sectors have had a subdued quarter but should rebound later in the year. If you wish to discuss the quarter in more detail or general investment, please contact Rod Nowlan or David Carroll.
Last minute residential deal tips market over €3bn.
It’s difficult to imagine things getting any worse for the retail sector than they did in 2020. But the chief driving force behind the decline of investor interest began long before Covid-19 arrived. There has been growing concern in relation to the impact of online retail and changing consumer trends on the long-term supply-demand dynamic for the bricks-and-mortar format. Much of this has been imported from the US where retail supply is five times that of Ireland, and the UK where it is 25 per cent higher and undergoing a sustainability crisis.
While the relative performances of these markets may already have been up for debate, the impact of Covid has ended the discussion. By mid-March the sector became virtually un-investable due to Covid-related uncertainties attaching to rental payments being added to those longer-term occupational concerns. The consequence of this is manifest in year-end investment turnover figures where retail will represent a record low 2.5 per cent of an anticipated total investment market turnover of € 3 billion. This from a sector that represented 24 per cent of investment turnover for the last decade (to 2019), but descending rapidly from a high of 53 per cent in 2016 to a previous record low in 2019 of 9 per cent.
Unsurprisingly for 2020 High Street retail has been worst affected with Grafton Street top of the list experiencing a 66 per cent reduction in footfall for March to October. While the street’s footfall figures had been holding steady at 25 million for the last two years, the 2020 outcome will be closer to 13 million.
No surprise then that almost a quarter of the units on the street are effectively available. Henry Street performed a little better as did some of the other city’s high streets, but the tone is similar. Next in line were the “comparison led” shopping centres which, as a general rule, saw footfall collapse during the first lockdown and rent collections plummet below 35 per cent. However, they did improve quickly and were less affected by the second lockdown. The burden of the service charge costs of running these mall-based schemes was exposed during these periods and will be a key factor in assessing the risk of ownership of these asset types in the future.
The resilience of the grocery sector shone through. No surprise therefore that 65 per cent of the limited 2020 retail investment transactions were grocery deals. Similarly, smaller grocery-led schemes performed better and recovered quicker than major town centres but weaker covenant strength and holding costs affected net rental collections.
Low holding costs
The retail sector’s star performers, however, have been the retail parks. Indeed, in the case of the 15 retail parks under Bannon management (between nationwide lockdowns) car throughput actually increased year on year for the period with rent collection rates approaching 100 per cent and impressive turnover increases. Even where tenants were adversely affected, low holding costs relative to shopping centres maximised the net income return to landlords.
If this crisis has accelerated the sector’s movement to the “retail endgame”, then retail parks and their occupiers have risen to the challenge. In this regard we envisage this asset type, along with grocery, to be the most liquid and popular sector for the year ahead.
Outside of this and following both Brexit and an anticipated mid-January lockdown we foresee a post-vaccine period of rebuilding balance sheets and filling occupational voids. While this period could take 12 to 24 months, there is little doubt that the rebasing of the sector generally will attract new investors wishing to get ahead of the recovery. This will probably manifest as loan trades first with a focus on fundamentally-sustainable schemes and high streets at attractive yields with occupiers who have embraced the omnichannel experience.
More sophisticated investors will recognise the buying opportunity that Covid-19 presents, especially if valuers fail to acknowledge the vast differences in performance across the sector.
Rod Nowlan is investment director at Bannon
Currently in the final stages of construction, Fitzwilliam 28 has been entirely pre-let to Slack Technologies upon completion of the building. The global tech giant is moving out of its current property on Hatch Street and into Fitzwilliam 28, which will act as their new EMEA headquarters.
Located between Merrion & Fitzwilliam Squares in Dublin’s CBD, the location is one of the most sought after in the City and once complete, Fitzwilliam 28 will comprise c. 12,600 sq m of prime Grade-A office accommodation over 8 floors and will be one of the most prestigious office buildings in the Dublin market.
ESB, Ireland’s largest utilities company, is developing the asset alongside its own headquarters at Fitzwilliam 27, which is also under development.
Sustainability and energy efficiency have been a key focus and as such, Fitzwilliam 28 will benefit from BREEAM Excellent accreditation, A3 BER Rating and will be one of Dublin’s first NZEB (Near Zero Energy Building) compliant developments.
On completion, the acquisition will represent Amundi Real Estate’s first deal in the Irish market in a bid to expand the presence of their flagship fund in key European jurisdictions.
Savills and Bannon advised ESB on this transaction. Knight Frank advised Amundi Real Estate.
Ronan Sheehy ESB Head of Property and Security commented:
“We are delighted to confirm the exchange of Fitzwilliam 28 with Amundi Real Estate. This flagship development by ESB has been built with the highest standards of sustainability in mind. A tireless amount of work has gone into ensuring the delivery of what we believe is the finest office development to complete in recent times, and we look forward to completing this deal with Amundi Real Estate in the coming weeks.”
Rod Nowlan, Director at Bannon, commented:
“This is an important transaction for the Dublin market, representing a deal which both underpins values and illustrates continued international demand with this new market entrant.”
Fergus O’Farrell, Director of Investments at Savills, commented:
“The quality of the asset was reflected in the strong demand for the investment. This investment by Amundi Real Estate is further endorsement of Dublin as location for international investment.”
David Carroll, Investment Director – “Q3 2020 turnover of €681m continued to illustrate the domination of PRS investment versus other asset classes with circa. 70% of value attributed to the sector. Covid-19 impacts continue to effect the supply and demand factors of traditional investment sectors. There is now close to €2bn of office product being marketed publicly and privately thus Q4 should provide some clarity on where investor appetite is at”.
David Carroll, Investment Director – “Q2 turnover of €430m reflected the impact of C-19 on the commercial market. 20 deals were completed with 78% of turnover attributable to just four transactions”.
Hibernia REIT has made two acquisitions in recent months as it bought assets next to properties it already owns.
In a trading update covering the period from October to today, the commercial property firm said it spent €2.5m on the two acquisitions.
Hibernia REIT also said it was in negotiations with tenants to take 56,000 square foot of space in its redeveloped property on Cumberland Place in Dublin city centre.
In today’s trading update, Hibernia said the Dublin office letting market saw another highly active fourth quarter, following two relatively quiet quarters.
It noted that take-up exceeded 3.3 million square feet in 2019 as a whole.
While this was lower than 2018, when a record 3.9 million square feet was leased, a number of deals were outstanding at the end of the year, with over 1.3 million square feet of space reserved.
“In addition, active demand at year end stood at 3.8 million square feet, which should be supportive for the occupational market in 2020,” Hibernia REIT said.
Hibernia said the vacancy rate in its in-place office portfolio remains at 12% and is mainly across its 2WML, Central Quay and the Forum developments.
It said it has made good progress in lease negotiations for the majority of the space available, adding that it expects these to start concluding shortly.
Kevin Nowlan, chief executive of Hibernia, said that the Dublin office letting market ended 2019 strongly, with a pick-up in demand from tenants of all sizes, after a quieter period in the middle of the year, particularly for smaller occupiers.
“Levels of active tenant demand remain high and 2020 has started positively,” he said.
“Property investment market volumes set a new record in 2019 though it remains to be seen how the market reacts to the tax changes introduced in the recent Budget,” he added.
Mr Nowlan said Hibernia REIT had made good progress with the lease negotiations that are ongoing over much of the available space in the office portfolio.
“We continue to work on advancing our development pipeline and have made two small property acquisitions to enhance the future value of the assets we already own,” he said.
“Hibernia remains well-positioned with an extensive development pipeline, low financial leverage and a talented team,” he concluded.
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.”
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.
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.
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.
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
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.
When the total volume of investment in Ireland’s commercial property market hit a record €4.6 billion in 2014, any expectations of that figure being surpassed anytime soon were few and far between.
Just five years on, however, the consensus within the industry is that a new benchmark of around €5 billion will be set. While the number is eyewatering in and of itself, it is all the more extraordinary when one considers the various domestic and international factors that have served at different times during the year to give local and international investors pause for thought.
Here at home, Minister for Finance Paschal Donohoe’s Budget 2020 stamp duty hike and Reit policy changes served to shake investor confidence, while on the global stage, the known unknowns of Donald Trump’s US presidency and the UK’s self-flagellation over Brexit, weighed heavily on buyers and vendors alike.
But with international funds still looking for a long-term home in an era of record low bond yields and interest rates, Ireland and more particularly Dublin’s standing as a location to deploy capital came into its own, as the top 10 deals below illustrate.
1 The Green Reit portfolio, Dublin – €1.34 billion
The largest deal of the year and the largest direct asset sale ever in the Irish market has served to propel this year’s record investment spend to the €5 billion mark. Having assembled a portfolio comprising Horizon Logistics Park and prime Dublin offices such as One Molesworth Street and the Central Park campus in Sandyford under founders Pat Gunne and Stephen Vernon, Green Reit surrendered its stock market listing last month following the acquisition for €1.34 billion of its assets by UK-headquartered, Henderson Park Capital.
2 The “XVI” portfolio, Dublin & Cork – €285 million
In July, the Competition and Consumer Protection Commission (CCPC) cleared the way for Ires Reit’s €285 million purchase of the 815 homes in the “XVI” (16) portfolio from US private equity giant, Marathon Asset Management. Distributed across 16 high-end developments in Dublin and Cork, the portfolio largely comprises the 588 apartments for which Marathon paid Nama € 120 million in 2015 as part of the Project Plum loan sale process. Included in the Plum portfolio’s prime assets were 101 apartments at Beechwood Court in Stillorgan, 67 units at Time Place on Corrig Road in Sandyford, 39 apartments at Heywood Court at Northwood in Santry and 128 apartments at Northern Cross on the Malahide Road.
3 The Sorting Office, Dublin docklands – €240 million
In June, Pat Crean’s Marlet Property Group and its finance partner, M&G Investments, secured a significant return from the sale of the Sorting Office to Singapore-headquartered real estate investment trust, Mapletree. Located on a site in the Dublin docklands which Marlet and M&G acquired from An Post for €40 million in 2015, the 19,510 sq.m (210,000 sq.ft) office scheme represented Mapletree’s first acquisition in Ireland. Google is currently in talks to rent the development in its entirety to facilitate the expansion of its Dublin-based workforce.
4 Heuston South Quarter (HSQ), Kilmainham, Dublin 8 – €222 million
While Henderson Park Capital hit the headlines in a big way this year with its purchase of Green Reit, it made its first foray into the Irish market last May when it teamed up with developer Joe O’Reilly to acquire the landmark Heuston South Quarter (HSQ) in Dublin city centre from US property giant Marathon Asset Management for €222 million.
Widely acknowledged as one of the foremost mixed-use campuses in the capital, the HSQ scheme comprises 266 apartments, 9,877 sq.m (106,319 sq.ft) of Grade A office space, 4,463 sq.m (48,034 sq.ft) of commercial space, and a 1.47 hectare (3.63 acre) development site.
The price paid by Henderson Park represented a premium of 85 per cent on the €120 million HSQ’s former owners, Marathon, paid Lloyds Banking Group to acquire the loans associated with the scheme in 2014.
5 Four and Five Dublin Landings, Dublin docklands – €205 million
The success of Ballymore and Oxley’s Dublin Landings mixed-use scheme continued apace this year with the sale of blocks 4 and 5 at the sprawling docklands development to the Central Bank of Ireland for €98.6 million and €106.5 million respectively. Located next to the Central Bank’s existing headquarters on North Wall Quay, the blocks extend to a combined floor area of 200,000 sq.ft (18,850 sq.m), and will be used to accommodate the expansion of its existing 1,815-strong workforce by up to 300 employees.
6 Five Hanover Quay, Dublin docklands – €190 million
Targeted Investment Opportunities ICAV (a joint venture between funds managed by Oaktree Capital, Bennett Group and Nama) didn’t have to wait long to find a buyer for Five Hanover Quay. Having put the fully-let prime Dublin docklands office building on the market last May, they agreed its sale for “just over” €190 million to German-based fund manager, Union Investment, in August. The property, which comprises 14,864 sq.m of office space distributed across seven floors, is let to various tenants including technology company DocuSign and Aptiv, a global auto parts company.
7 Nova Atria, Sandyford – €167 million
With the ink barely dry on its €240 million purchase of the Sorting Office, Singapore-headquartered Mapletree hit the acquisition trail again, snapping up the Nova Atria office campus at Sandyford in south Dublin from US private equity firm, Blackstone, for €167 million. The closure of the deal in October brings Mapletree’s investment to date in the Irish office market to €407 million.
Nova Atria comprises two office blocks comprising a total of 320,000 sq.ft known as Nova Atria North and South. Nova Atria North is let to a number of tenants while all 15,939 sq.m (172,121 sq.ft) of space at Nova Atria South was let to Facebook by the scheme’s previous owners, Blackstone, earlier this year.
8 Reflector Building, Dublin docklands – €155 million
While several parties including German asset manager, Wealthcore, and South Korean bank holding company, Hana Financial Group, were linked to its purchase since it was brought to the market last February, another German investor, Deka Immobolien, came through to acquire the Reflector Building for €155 million.
Completed by Michael Cotter’s Park Developments in 2018, the Reflector is a six-storey over-basement building comprising 11,250 sq.m of office space and 329 sq.m of retail space, with 34 car-parking spaces. The property is producing annual rental income of around € 7 million from several tenants, including Airbnb, LogMeIn and web designer Wix.
9 Charlemont Exchange, Dublin city centre – €145 million
Developer Pat Crean’s Marlet Property Group landed the first major commercial real estate deal of 2019, when it completed the sale last April of its Charlemont Exchange office scheme to South Korean-based fund, Vestas Management for €145 million.
Marlet assembled the Charlemont Exchange development originally through the acquisition of Charlemont Blocks A, B and C in March 2017, followed by the purchase in December 2017 of Charlemont Block D. Marlet subsequently extended the combined footprint of the four-building scheme from its original 94,968 sq.ft to 121,270 sq.ft in the course of refurbishing the scheme.
Prior to selling the development, Marlet agreed a lease with flexible workspace provider, WeWork, for all four blocks at a rent of €55 per square foot.
10 DIT Kevin Street campus, Dublin 2 – €140 million
Developer Shane Whelan’s Westridge Real Estate signalled its intention to become a major player in the Dublin commercial property market last September when it paid €140 million to acquire DIT’s former Kevin Street campus.
Whelan’s acquisition of the 3.57-acre site represented the biggest development land deal of 2019, and was backed by a number of New York-based high net worth family offices. Debt finance for the deal was provided by Fairfield Real Estate Finance led by Chris Wilson and BentallGreenOak which was led by its Dublin-born vice-president Allen Crampton.
Westridge is in the process of preparing a planning application for a major mixed-use scheme comprising mainly Grade A office space alongside a large element of private rented sector (PRS) apartments, and food and beverage offerings. The former DIT campus is located just 300m from the Luas Green Line stop at St Stephen’s Green, and within walking distance of the city centre.
€100 million mark
Outside of the top 10 deals by value, numerous other transactions during the year eclipsed or at least equalled the €100 million mark. In the hotel sector alone, both the Marker and the Conrad changed hands for €134 million and €116 million respectively. Henley Bartra, a joint venture between UK private equity giant Henley and developer Richard Barrett’s Bartra Capital, meanwhile paid €125 million for 500,000 sq.ft of offices and data centre assets distributed across the Citywest Business Campus in Dublin and Cork Airport Business Park.
The fast-growing private rented sector (PRS) market was a hive of activity with notable deals including the sale to DWS for €108 million of 214 apartments at the Cosgrave Property Group’s Fairways scheme in Dún Laoghaire, and the sale to Patrizia of 179 apartments at Marlet’s Mount Argus scheme in Harold’s Cross for €100 million.
Among the deals understood to have been agreed but not yet finalised are Starwood’s sale for €535 million plus of five prime Dublin office properties, known collectively as the Cedar portfolio to US private equity giant Blackstone; Tristan Capital Partners’ sale for €214 million of the 382 apartments in the Vert PRS platform to Avestus Capital Partners, and the €185 million acquisition by a fund managed by Davy Real Estate of St Stephen’s Green shopping centre.
Foreign Direct Investment in Ireland 2017, a thematic publication exploring the impact of FDI and globalisation, shows over 300,000 jobs are directly linked to foreign investment into Ireland.
Despite a decrease of €54bn in the stock of Foreign Direct Investment into Ireland between 2016 and 2017, at €744bn (253% of GDP) investment still remains high in comparison to other EU countries showing the highly globalised nature of the Irish economy.
Employment figures show growth across all sectors since 2012, with the largest growth (28%) recorded in the scientific and technical activities sector. In 2017 average wages in foreign-owned multinational enterprises (MNEs), at €50,000, were significantly higher than those paid by domestic firms (€33,000), but lower than those paid by Irish MNEs (€57,000). All sectors experienced wage growth, with the largest growth in the information and communications sector and the administration and support services sector, which experienced 26% growth and 20% growth respectively between 2012-2017.
This is the second time the CSO has published this experimental publication linking data across statistical domains. Foreign Direct Investment in Ireland 2017 looks at the role of investment into Ireland, its associated globalisation and its role in the Irish domestic economy. This publication brings together several different data sources designed to complement the annual and quarterly Foreign Direct Investment statistics presented in our International Accounts.
New to this year’s publication is a breakdown of gender balance in FDI firms and an analysis of the influence of Special Purpose Entities (SPEs), distinguishing between actual investment in firms operating in Ireland and funds passing through via SPEs.
Insurance giant Irish Life intends to double the size of its retail investment business over the next five years to €10bn. It also plans to acquire a number of residential developments, investing “hundreds of millions” in residential properties.
Irish Life acquired the sought-after Fernbank development in Dundrum, south Dublin, last year for €100m.
In an interview with the Sunday Independent, CEO David Harney said the company intends to conclude similar deals shortly. “I doubt we will be doing two deals like Fernbank every year, but if we’re doing one deal like it annually we would be pretty happy,” he said.
Harney also confirmed that the company lost out to Brewin Dolphin in its bid to purchase the wealth-management arm of Investec.
“We do think that in Ireland too many people have too much on deposit rather than in broad-based investments.
“We’ve grown our multi-asset portfolios into a €5bn business over the last five years and we’d love to double that over the next five,” he said.
Harney, who was speaking after the launch of the company’s new MyLife health improvement app, also signalled the company’s intention to acquire more wealth management businesses.
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