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.
