Quarterly International Investment Position and External Debt

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The Quarterly report released from the Central Statistics Office today show Ireland’s quarterly international investment position (IIP) results overall stocks of foreign financial assets of €3,124.9bn – an increase of €81.1bn on the end-March 2014 level, while the corresponding stocks of foreign financial liabilities increased by €82.9bn to €3,302.7bn over the quarter.

Irish residents had an overall net foreign liability of €178bn at end-June 2014, an increase of €2bn on the net foreign liability level at end-March 2014. Excluding investment funds, Irish controlled enterprises account for 29% of the remaining external assets and 31% of external liabilities.

Within the commercial financial sector (i.e. MFI and OFI), IFSC enterprises accounted for a very high proportion of the sector’s overall foreign assets and liabilities. IFSC assets abroad increased by €48.9bn to €2,483.8bn at end-June 2014, or 94% of the sector’s foreign assets; IFSC liabilities at €2,517bn, an increase of €69.4bn, represented 96% of the commercial financial sector aggregate liability (and 76% of Ireland’s total foreign liabilities). IFSC enterprises showed a net liability position of €33.1bn

CSO statistical release, 25 September 2014

Housing Supply Capacity in Dublin’s Urban Settlements 2014-18

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A report, which has been commissioned by the Society of Chartered Surveyors Ireland (SCSI), explores the capacity of lands zoned for residential development within the Dublin Region to deliver the requisite housing units for the projected population of the Dublin Region between 2014-2018.

The key findings in the report are:

  • There are 2,233 hectares (ha) of land zoned and potentially available for residential development, which is 2.4% of the total land area in the Dublin Region.
  • This zoned land can deliver approximately 102,500 additional housing units under the minimum recommended density scenario.
  • This can result in the provision of housing for approximately 269,000 additional persons.
  • There is a minimum housing unit requirement of 35,433 between 2014 – 20181. However, currently there is only a total of granted (extant) planning permissions for 26,580 units, resulting in a shortfall of 8,853 units over the five-year period.

View Full Report

View Planning and Zoning in Dublin

A ten step strategy to address the housing supply shortage

Upper floor accommodation to let on Middle Abbey Street, Dublin 1

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Recently refurbished upper floor accommodation to let on Middle Abbey Street.

Extending to net internal area of 127 sq.m (1,367 sq.ft). Excellent high profile location.

For further details please contact Louise Doherty or Katie Williams of Bannon on 01 6477900

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Allianz to invest €140m in Irish property market

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Allianz Real Estate, the international real estate division of Allianz Group with €30bn in assets under management, has committed to invest €140m in IPUT, the largest unlisted debt-free property fund in Ireland. IPUT currently manages over 90 portfolios, valued at more than €1bn, including 43 prime office property in Dublin’s central business district valued at €775m.  Most recently, it acquired a portfolio of Dublin-based assets, known as the Salix portfolio, from the Bank of Ireland staff pension fund for an all cash payment of €115m.

E-day is Today

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Today is E-day, the date from which central Government, local authorities and State agencies stop issuing and accepting cheques from businesses.

The particular focus of e-day is to encourage SMEs to migrate from cheque usage as they are either issuers or receivers of more than 60% of all cheques in Ireland.  A shift from cheques to electronic as a preferred method of payment will result in reduced costs and improved cash-flow for the overall business sector.

The NPP, National Payments Plan, estimates that savings of up to €1 billion per year can be made if Ireland were to match best practice in Europe by migrating away from cheques and cash in favour of electronic payments.

Construction tender prices increase

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The Tender Indices for the second half of 2014, produced by the SCSI, show construction tender rates continue to rise steadily in 2014, up 4.4% from this time last year. Construction tender prices increased by 2% since the beginning of 2014.

The continued stabilising of tender rates in the first half of 2014 are due to a number of factors. International demand for materials such as steel, metal etc., rising fuel prices and running costs have led to material price increases that can no longer be absorbed within tender rates. The rates also reflect the recent steady increase in construction activity in Dublin.

IBRC seizes property company behind eight SuperValu stores

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Irish Bank Resolution Corporation (IBRC) has appointed Liam Dowdall and Sean McNamara of Smith & Williamson accountants to take control of HCJV, the property arm of the Caulfield McCarthy retail group, one of the country’s biggest SuperValu franchisees which owns stores and shopping centres in eight locations around the country on foot of unpaid loans totalling more than €80m.

The Caulfield McCarthy group includes outlets at the Hypercentre in Waterford, Loughboy in Kilkenny, Bandon in Cork, Tipperary town, Merchant’s Quay in Cork city, Malahide in Dublin, and Enniscorthy and New Ross in Wexford. The retail side of the business Caulfield McCarthy Group Retail, is not in receivership, and the stores, which employ about 1,000 staff, will continue to trade as normal.

The loans were due to be sold on by IBRC as part of its liquidation, but according to the receivership appointment notices, it was the bank that put in Smith & Williamson, and not any third party loan buyer.

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Shopping Centre Investment in Rathfarnham

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Bannon are delighted to bring to the market the sale of Rosemount Shopping Centre, Rathfarnham, Dublin 14. The shopping centre comprises a two level scheme with 8 retail units situated at ground floor and a further 4 commercial and offices units at first floor. The first floor units are served by two stairwells with a minimum quantum of common area to be maintained. There is an attractive Initial yield excess of 8%.

The scheme extends to 2,215.4 sq.m (23,846 sq.ft) with the benefit of 112 surface car parking spaces. This car park has been taken in charge by South Dublin Co. Council. Key tenants include Supervalu, Shannon’s Pharmacy, Rosemount Meats, Ray’s Catch, Fresh Fruit & Veg Delicatessen and Truly Scrumptious Café amongst other complimentary uses. The shopping centre has full occupancy with excellent income history.

For further details please contact Daniel McLaughlin, Rod Nowlan or Ben Semple of Bannon on 01 6477900

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Property firm Green REIT reports net profits of €43m

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Green REIT Plc today announced its results for the period from incorporation on 24th June 2013 to 30th June 2014 which reported a pre-tax profit of €43 million for its first year of operation, as it re-valued its portfolio upwards by approximately €36 million.

In the 12 months to June 30th 2014, Green Reit reported total passing rents of €28.5 million, an investment income yield of 7%, and a dividend of 0.92 cent.  Over 73% of the assets are in offices, 17.5% in retail, 3.6% in development land, 2.4% in industrial and 3% in other investments.

Reit said that it has a further €322 million to invest into new opportunities.

Please view full report – Preliminary Results for the period to 30th June 2014

New type of loan for small businesses

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The network of Local Enterprise Offices (LEOs) has joined forces with Microfinance Ireland (MFI) and launched a new type of loan support aimed at Ireland’s small business community called ‘LEO Microfinance’.

Start-ups and small businesses which employ fewer than 10 people can now apply directly to any of the 31 LEOs around the country for the new loan package. It offers loans of between €2,000 and €25,000 at a reduced rate of interest of 7.5% as opposed to 8.5% on a standard loan rate with flexible repayment options. It is expected that up to 250 new applications for the loan support will take place this year alone. Based on an average loan size of €15,500, this would mean €3.8m in lending.

For more information visit www.microfinanceireland.ie

Retail Warehouse Units For Sale – Barrow Valley Retail Park, Carlow

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Barrow Valley Retail Park have 9 retail warehouse units for sale on the instructions of the Joint Receivers Michael Madden and Michael Coyle.

Units are available individually or as a single lot.

The units for sale extend to approximately 56,165 sq.ft on ground with mezzanine accommodation of approximately 18,435 sq.ft which forms part of a modern retail park scheme of 20,000 sq.m anchored by the only Dunnes Stores in Carlow. High profile location with over 500 metres frontage to the N80 Northern Relief Road and over 500 car parking spaces. Easily accessible, convenient location 2km from Carlow Town Centre.

Retail occupiers include Lifestyle Sports, Hughie Doyle Furniture, Tenants t/a The Ivy Rooms and Tyndall Clinic and Pharmacy. Leisure occupiers include The Talbot Hotel (80 bedrooms) and The Dome Leisure Centre. Motor occupiers include Ford Motors, Mitsubishi Motors and Meridian Motors.

For more information please contact Cian McMorrow on 01 6477900

View Online Brochure

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Six Irish shopping centres to be offered in Project Spectrum

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There are six Irish shopping centres to be offered for sale in a single lot by Lloyds Banking, named the Spectrum portfolio, in a further move to recover some of the development loans granted by Bank of Scotland Ireland.

Joint agents Bannon and Savills are quoting €120 million for the shopping centres at Douglas in Cork, Quayside in Sligo town, Bloomfields in Dún Laoghaire, Co Dublin, The Mill in Clondalkin, Dublin 22, Kilbarrack in Dublin 5 and Dundalk Retail Park in Co Louth. The sale also includes a rented three-storey office building in Clondalkin and 30 acres of development land adjoining Dundalk Retail Park.

The Spectrum portfolio’s seven assets produce approximately €11 million of income, which at a sale price of €120 million would offering a net initial yield in the region of 9%.

The retail schemes include:

  • Douglas Court Shopping Centre, South of Cork City. WAULT, 7.64 years, 85% occupancy, annual rent: €3.9m
  • Dundalk Retail Park, Dundalk, Co. Louth. WAULT, 8.32 years, annual rent: €2.46m
  • Quayside Shopping Centre, Sligo Town. WAULT, 3.97 years, annual rent: €1.28m
  • Bloomfields Shopping Centre, Dun Laoghaire, Co. Dublin. WAULT 7.2 years, annual rent: €852.2m
  • The Mill Shopping Centre, Clondalkin, Dublin 22. WAULT 10.9 years, annual rent: €1.29m
  • Kilbarrack Shopping Centre, Dublin 5. WAULT 11.79 years.  Annual rent: €721m
  • A State let office block opposite The Mill Shopping Centre on Ninth Lock Road, building let in its entirety to Dublin City Council and the OPW. WAULT, 5 years, annual rent: €451.5m.

First round bids are called for 10th October, with second and binding bids expected three weeks later before closure with the winning bidder slated for mid-November.

For further information please contact Rod Nowlan of Bannon on 01 6477900

The Spectrum portfolio, renamed from the portfolio’s original name of Project Thomond after peripheral Limerick assets were removed.

Woodies Owner Grafton Group reports strong performance all round

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Woodies owner Grafton Group has reported a strong performance in their first half of the year, with revenue, profit and earnings per share all rising on the back of improving trading conditions. Profit before tax was up more than 280% from 24.5 million in the first six months of 2012 to 68.4 million in the same period this year, the company said in a statement.

The company said the merchanting business in Ireland reported a significant increase in revenue, which rose 5.6% from €114 million in 2013 to €121 million in the first six months of this year. Operating profit advanced “very strongly” from €1.5 million to €6 million and the operating margin increased by 3.3 percentage points to 4.%. The UK merchanting business, which constituted 73% of group revenue, performed strongly due to volume growth in the residential repair, maintenance and improvement market.

“The benefit of restructuring of its Woodies chain completed in the second half of 2012 that involved the consolidation of two stores and the realignment of rents to current open market levels in ten stores enabled the comparative half year loss to be eliminated and the business returned to profitability”, said Grafton.

Hibernia Reit acquires 0.75 acre freehold site in Dublin’s South Docks

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Property investment company Hibernia Reit has exchanged contracts to acquire a 0.75 acre freehold site at 1-6 Sir John Rogerson’s Quay, Dublin 2 for € 17.75 million in an off-market transaction.

The site, which fronts onto the river and adjoins Hibernia’s recently acquired Observatory Building, has existing planning permission for 102,000 sq. ft. net lettable of offices, c. 5,000 sq. ft. of retail space, three residential units and 34 parking spaces.

With Hibernia’s Windmill Lane Site and Hanover Building immediately behind and the Observatory Building adjoining, the acquisition gives Hibernia ownership of a full riverside quadrant in the South Docks area, which has become one of the most popular office locations in Dublin in recent years.

This acquisition is Hibernia’s eleventh since listing on the Irish Stock Exchange in December 2013. Following completion of the acquisition of the site and its recent acquisition of The Forum building in the IFSC, Hibernia will have invested € 393 million, with a further € 63 million committed.

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Hibernia Reit acquires Forum building in IFSC

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Hibernia REIT has announced a deal to buy The Forum building in Dublin’s IFSC from an affiliate of Atlas Capital Group for a price of €37.8m in an off-market transaction.

Constructed in 2003, the building is situated on Commons Street and comprises 47,109 square feet of office accommodation over two floors above four floors of car park space. The offices are fully let to Depfa Bank on annual rent of €40 per sq. ft. on leases which expire in 2029, with options to break in 2019. The total passing rent from the offices, together with 50 parking spaces also let to Depfa, is €2m per annum. The remaining 320 car parking spaces are currently utilised by Park Rite, paying €675k per annum, on a lease that has formally expired. Lease discussions are on-going with the tenant.

The Forum is Hibernia’s tenth acquisition since listing. The deal is expected to be completed in late 2014.

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SCSI calls for extension of Home Renovation Scheme to Commercial

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The Society of Chartered Surveyors of Ireland (SCSI) has called for an extension of Home Renovation Scheme (HRI) to Commercial Properties following a survey which was carried out. SCSI has called for a number of measures to boost the supply of new commercial property, including the introduction of a Builders Finance Fund (BFF) and a Revolving Infrastructure Fund to support the availability of development finance.

The survey also shows a 5th of commercial property owners applied for a rent reduction in the last year, of those that applied 42% achieved a reduction of up to 10%.

Please see PDF report:

New Commercial Property Survey from Society of Chartered Surveyors Ireland

KPMG prepares fresh sales process for IBRC’s unsold projects

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KPMG has repackaged all €2.4bn unsold IBRC non-performing loans (NPL) in three separate portfolios, dubbed projects Amber, Quartz and Pearl, in a set of fresh blind auction processes which are targeted for staggered closures before the year end.

PricewaterhouseCoopers has been assigned to advise KPMG, the joint special liquidator of IBRC, on the re-attempted sale of the loans which failed to meet the minimum price threshold as set by Ireland’s Minster of Finance, Michael Noonan in May last year.

The re-packaged NPLs are now comprised as follows:
– The €675m Project Amber, comprised of Irish corporate and commercial property loans
– The €1.1bn Project Quartz, comprised of commercial property loans
– The €655m Project Pearl, comprised of predominantly Irish residential mortgages.

Project Amber is the first of the three re-issued NPLs to be marketed, with the sales process having started last week, according to the Irish Independent. The sales process for Projects Quartz and Pearl are expected to begin next month.

A successful sale of projects Amber, Quartz and Pearl would facilitate the completion of IBRC’s accelerated wind-up, as decreed by Ireland’s parliament in early February 2013 after emergency overnight legislation was passed in the Dáil, Ireland’s parliament, and KPMG’s Wallace and Richardson replaced IBRC’s Board.

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REIT acquires €130m credit facility with Barclays

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Property investment company Irish Residential Properties REIT plc (Ires Reit) has entered into a two year €130 million credit facility arranged by Barclays Ireland, secured against the company’s assets, which will allow the company to grow and achieve its investment goals.

The firm, which is a subsidiary of Toronto-based Canadian Apartment Properties Real Estate Investment Trust (CAP REIT), followed Hibernia REIT and Green REIT onto the Irish Stock Exchange in April, when it raised €200 million. Its focus is on buying and managing investments in the apartment blocks in urban areas across in Ireland.

In June Irish Residential Properties REIT plc acquired a block of 84 luxury apartment suites adjacent to the five-star Marker Hotel in the Grand Canal Dock area of Dublin for €50.1 million.

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Irish Exports: Recovery in 2014 taking hold

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Trade data for the first five months of 2014 show that exports volumes grew by 4.3% on the same period in 2013.  Indicators suggest that the Irish manufacturing sector has benefited from stronger external demand, particularly from the UK.

It is reported that some 62,900 sq.m (677,049 sq.ft) of space was transacted in Q2 – almost double the activity in Q1 – bringing the volume of industrial space transacted so far in 2014 to 95,000 sq.m (1,022 million sq.ft).

For more information on available Industrial facilities please contact Niall Brereton on 01 6477 900

View Current Industrial Property Listing

Barclays Bank wins loan financing mandate for Oaktree Capital

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Barclays Bank has won the £335m whole loan financing mandate for Oaktree Capital Management and Patrizia Immobilien’s joint acquisition of the three-strong MEPC UK business parks portfolio.

Oaktree, which is the majority equity investor with at least 90% of the joint venture share, has selected Barclays after a competitive financing process which included a number of investment bank underbidders including Citigroup, Deutsche Bank and Bank of America Merrill Lynch.

The three regional business parks are spread over 4m sq.ft of mixed-use space leased to 510 tenants.

  • The 2m sq ft Hillington Park in Glasgow
  • The 1.2m sq ft Birchwood Park in Warrington, 20 miles east of Liverpool, 20 miles east of Liverpool
  • The 820,000 sq.ft Chineham Park in Basingstoke, 17 miles south west of Reading, which includes MEPC as a tenant.

Oaktree and Patrizia confirmed the closure of the initial all-cash acquisition on Monday, reflecting a net initial yield of 7.3%, while the debt refinancing is scheduled for 25th September,  one week after the Scottish referendum which potentially represents a currency risk in the event of a break-up of the UK.

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Line-up of tenants battle over Grafton Street

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Only four months after opening the Cos fashion store on Dublin’s Wicklow Street, the giant H&M fashion group has emerged as the favourite to put another of its luxury brands, & Other Stories, into the former A|wear shop on Grafton Street. The letting is likely to be confirmed later this month.

The line-up of tenants chasing the three-level floor plates at 26-27 Grafton Street includes American fashion chains Gap, Gant and Anthropologie, UK shoe retailer Schuh, the Spanish Inditex company, Zara Home, German fashion house Hugo Boss, the Irish-based Lifestyle Sports as well as & Other Stories. Some of the companies chasing the premises are understood to have offered at least €50,000 more than the quoted rent of €850,000 per annum.

The five-storey over basement building has the second largest retail area on the street after BT2 – apart from the department stores – with more than 882 sq.m (9,500 sq.ft) at basement, ground and first floor levels. The owners of the building, Aviva Investors, are planning to carry out a major upgrading of the block early next year including the installation of a new façade. In the meantime, the retail area has been let to HMV on a short term lease until next January at a rent which equates to €750,000 per annum. With the three top floors of offices extending to 836 sq.m (9,000 sq.ft) also to benefit from the refurbishment.

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RBS shortlists for Project Achill Final Round

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Royal Bank of Scotland has selected a shortlist of three private equity funds and one investment bank – Lone Star, Cerberus Capital Management, Oaktree Capital Management and Deutsche Bank – to progress to the second and final round for the nominally-valued €1.2bn Project Achill portfolio, following first round bids which were submitted on 1 August. The four finalists are understood to have bid for the majority of Project Achill, which comprised 31 separate borrower connections over six subpools originally extended to Ulster Bank, an RBS subsidiary.

The underlying properties within Project Achill include:

  • Belfast’s upmarket The ARC Apartments with 207 units at Titanic Quarter and the 130,569 sq.ft Gateway Offices, which is 90% leased to Citigroup to June 2024
  • A loan secured by the Forge Shopping Centre in Glasgow; the Ards Shopping Centre in Newtownards, 10 miles east of Belfast; Waterfront Plaza in Belfast, anchored by PwC and Mallusk Industrial Estate in Newtonabbey
  • A suburban Dublin office and retail portfolio over 118,669 sq.ft, including 1-5 Leopardstown Retail Park and Unit 33 Sandyford Office Park
  • The IBIS & Novotel Hotels in Friar Street, Reading
  • A Primark retail store at 62-74 Burleigh Street in Cambridge
  • Russell & Bromley’s store in Princes Street, Edinburgh
  • Independent House, Talbot Street in Dublin (which is home to the Irish Independent)
  • Exchange House in Belfast
  • Blackrock Business Park in Blackrock, Ireland
  • 16 completed residential units in Skerries and Malahide; a 128-acre land site with planning permission in Kinsealy, Skerries and Bettytown; 25 Merrion Square, an office block in Dublin; and 15 houses in Barnageeragh
  • A 16-strong mixed-use portfolio comprising residential, retail and office assets in Cork over 218,079 sq.ft, with a 74.5% occupancy

It is understood that second round biding bids on Project Achill, which is being sold by Eastdil Secured on behalf of RBS, have been called for Friday 19 September.

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New partnership in Northside Shopping Centre

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Patron Capital Partners has formed a new retail and residential partnership with Brian O’Callaghan, the son of well-known Cork developer Owen O’Callaghan.

Patron has already begun working on its first joint project with Mr O’Callaghan to operate and expand the Northside Shopping Centre on the northern fringe of the M50 in Coolock, Co Dublin.

The UK and Luxembourg property fund with €2.5 billion under management acquired the centre in May from NAMA. The shopping centre was a key asset in a portfolio of loans “Project Drive” bought by Patron, which are associated with developer Brian O’Farrell. Project Drive had an outstanding loan balance of €228m which implies an approximate discount of 78.5%. Other assets in the portfolio include a retail centre in Poland, a potentially valuable site in north Dublin and a large house in the K Club.

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Eircom plans transfer to Jersey

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Eircom has announced plans to transfer the assets and liabilities of its main operating company to a new entity incorporated in Jersey. Last April, Eircom announced it was undertaking a formal review, advised by Goldman Sachs, Rothschild and Morgan Stanley, of its future “strategic options”, including a possible flotation that could value it at between €2.5 – €3 billion.

The former State-owned company announced that is considering another listing on the stock market, which would be its third in the space of just 15 years. The government initially floated the company in 1999 only for it to subsequently return to private ownership two years later, before being re-floated in 2004 for another two-year period. It emerged from bankruptcy protection in 2012 after a 40% debt write-off worth €1.8 billion.

Microsoft to build Mega HQ in Leopardstown subject to levy

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Us computer giant Microsoft has been granted permission to build new headquarters in Leopardstown in Dublin to accommodate up to 2,000 staff, subject to €8m council levy.

The proposed office development on a three-hectare site at South County Business Park on Leopardstown Road would have to meet 35 conditions set out by the council’s planning department.

The total gross floor area of the concrete structure is at 34,554 sq.m. There would be 558 car parking spaces, with 343 on surface level. The basement would also include 24 motorcycle spaces and bicycle spots.

Dún Laoghaire-Rathdown council seeks funds for parks, roads and public transport. If permission is granted, the development will commence in late 2014 and be fully operational in two years.

Shelbourne Hotel acquired by US property investment group

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The Shelbourne Hotel has been acquired by US property investment group Kennedy Wilson, which is planning to invest millions of euro into the business to build on its status as the top five-star hotel in Dublin. This will include a facelift for the hotel’s facade, which is considered a “priority project”. Plans are also being developed to add a hair and beauty salon to its existing spa facilities, and to refurbish its 19 suites and public areas.

Ownership of this prized asset has switched from Jerry O’Reilly and John Sweeney, the remaining owners from a consortium that acquired the hotel in 2004. Other members of the consortium included Bernard McNamara, who was recently declared bankrupt in Britain.

The receivership has no impact on the operation of the hotel, with all sums owed to staff, trade creditors and the Revenue Commissioners to be paid in full by the new owners.

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€6m for Grade A North Park offices in Dublin 11

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Agents Katie Williams and Rod Nowlan of Bannon are guiding €6.2 million for an office investment at the entrance to the North Park on the North Road in Dublin 11 which will show a return of 8% with an opportunity to better that figure on letting vacant space and completing rent reviews.

The J5 Plaza extends to 5,834 sq.m (62,796 sq.ft) excluding basement which has 252 car parking spaces. The investment is currently producing €518,465, with 77% of it coming from the HSE.

Värde Partners wins NAMA’s Acorn portfolio for over €170m

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Värde Partners outbid a joint venture of Burlington Real Estate, the reborn management team from Treasury Holdings, and US hedge fund Davidson Kempner to acquire the Acorn portfolio from NAMA for more than €170m, 30% above the initial asking price.

The Acorn portfolio is comprised of three provincial Irish shopping centres, delivering €13.18m of rent from 120 tenants.

The assets are:

  • The Blackpool Shopping Centre and Blackpool Retail Park in Cork
  • The Millfield Shopping Centre in Balbriggan, Dublin
  • The Showgrounds Shopping Centre in Clonmel, County Tipperary

The Irish shopping centre market has been dormant for six years, with the only post-crisis sale of the 72.8% stake in Liffey Valley sold by Aviva Investors to HSBC Alternative Investments Limited (HAIL) and Hines for €252m. However, Liffey Valley is a stabilised Dublin shopping centre, compared to the Acorn assets’ more provincial locations.

Bannon and Jones Lang LaSalle were selling agents for the Acorn portfolio on NAMA’s behalf.

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Deutsche Bank pays €145m for €400m Project Spring portfolio

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Deutsche Bank has won a portfolio of €400 million worth of property loans linked to the developer Gerry Conlan from the National Asset Management Agency (Nama).

Project Spring includes loans secured on several prominent buildings in Dublin city, including several attractive redevelopment opportunities. It includes loans attached to an office block on Wilton Terrace near Leeson Street bridge, the Central Hotel on Exchequer Street, the Newhall Retail Park in Kildare, prime London city offices, and a development site near Britta’s Bay in Wicklow. Project Spring’s annual rent is circa €8m.

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Ulster Bank’s €1.1 billion sell-off

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Loans tied to Independent News & Media’s headquarters, upmarket homes in Belfast and Dublin, and properties backed by developer, Paddy McKillen feature in a €1.1 billion debt portfolio that Ulster Bank and its parent have just put up for sale.

Dubbed “project Achill” it will be the biggest portfolio of loans that Ulster and its parent, Royal Bank of Scotland (RBS), have put on the block as part of their efforts to clear their books of boom-era property debt.

Almost 83% of the portfolio by value is Irish, with English and Scottish loans making up the balance. Some of the properties to which the debts relate include Independent House on Talbot Street in Dublin, the offices of newspaper group Independent News & Media. The newspaper’s building forms part of pool A, project Achill’s biggest subdivision, which is made up of 22 loans, half of which are non-performing, with a total face value of €511 million. That pool also includes Blackrock Business Park in Dublin and Exchange House in Belfast. Alongside those sits a €49.7 million loan to developer Bernard Carroll that falls due at the end of next year.

In all, project Achill has six pools. Only pool A has a mix of borrowers, the other five relate to a single debtor. Ulster Bank would not comment yesterday to the Irish Times.

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Hibernia Reit acquires two IFSC properties for €90.75m

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Hibernia REIT plc (Hibernia) has acquired Guild House and Commerzbank House in Dublin’s IFSC for €90.75m in cash from a syndicate of private investors in an off-market transaction. The price reflects a capital value of €629 per sq.ft and a net initial yield of 6.6%.

Guild House and Commerzbank House are two adjoined Grade A office buildings located in the IFSC, Dublin 1, one of the principal locations for the financial services industry in Ireland. The offices are fully let off average rents of €39 per sq.ft on leases running to 2025 with a weighted average unexpired term to break of three years. The principal tenants are FBD Holdings Ltd, Commerz Management Services and BNY Mellon.

Following the completion of this transaction Hibernia will have concluded nine acquisitions since listing, deploying €337m, 91% of the net proceeds raised in December 2013, with a further €63m committed.

Pizza Express sells to Chinese firm for £900m

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The Pizza Express restaurant chain, which owns Milano in Ireland, has been sold to Chinese firm Hony Capital for £900 million.

With over 500 restaurants – 12 Milano’s in Ireland, 436 Pizza Express restaurants in Britain and 68 internationally – 12 restaurants in Hong Kong and nine in Shanghai, as well as outlets in India, Saudi Arabia and Bali – employing more than 9,000 workers. Hony aims to open another 200 restaurants in the UK.

The chain was owned by the Gondola Group, the market leader in the UK casual dining sector, which confirmed the sale to Chinese private equity firm Hony.

Unit A, Crag Crescent, Clondalkin Industrial Estate, Dublin 22

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Available to purchase end of terrace industrial unit for sale in Crag Crescent, Clondalkin Industrial Estate, Dublin 22.

  • Two storey offices to front, approx. 288 sq m (3,100 sq.ft) plus mezzanine
  • Car parking for approximately 12 cars to the front and side

Please click here to view brochure. For more information please contact Niall Brereton on +353 (1) 6477900

ESB HQ lodge planning application for Fitzwilliam Project

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ESB plans to demolish and redevelop its Fitzwilliam Street headquarters at a cost of about €150 million. Their vision is to deliver a successful new office redevelopment, in keeping with its 18th century surroundings and to provide modern, efficient, sustainable accommodation to more people.

In addition to the estimated employment generated during construction (approximately 400 construction related jobs over 2.5 years), the building will create opportunities for small businesses in the area. The proposed building will accommodate up to 3,000 workers without increasing the footprint above ground.

Careful planning and design by ESB and its team of experts, which include Bannon, means that the €150m (approx.) cost of the building will be paid for by savings and other benefits over time, including:

  • Reduced maintenance costs.
  • Extra space generated from efficient design allowing rental income from third parties or savings achieved by accommodating staff currently located elsewhere.

Early next week ESB will lodge the planning application with Dublin City Council and the public consultation phase will begin. The project will not increase the price of electricity.

www.esbprojectfitzwilliam.com

Davy H1 Irish Real Estate Report

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During the first half of the year the investment in Ireland’s commercial real estate (CRE) market has totalled €1.8bn year-to-date, Dublin’s office market accounted for 70% of all capital invested in Ireland in H1 2014 and the changing risk premium for Dublin offices has enticed investor groups into the market for the first time, notably UK open-ended fund Knight Frank Investment Managers.

Crucially, the requisite economic and real estate fundamentals to support these factors have been in place. Rising rents are a clear manifestation of the improvements. Office rents are up 15% since the start of the year, and there are now signs of rental growth in segments of the retail and industrial sectors.

Please view full report:

Davy H1 Irish Real Estate Report

Bannon appointed management agents for Gorey shopping centre

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Bannon have been appointed management agents for the Gorey shopping centre.

The centre is anchored by Dunnes Stores in the South-East, who are joined by some of the leading Irish and international retail names such as the Carphone Warehouse, Elverys Sports and Gamestop.

Gorey has over 30 stores spanning more than 150,000 square feet, is open 7 days a week, and have over 400 FREE parking spaces.

Retail Investment for Sale in Cavan Town

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Bannon & Crotty Auctioneers are delighted to bring to the market the sale of Townsparks in Cavan Town. The investment is guiding €1,950,000 plus VAT which represents an initial yield of 15%. The building is located in the retail core of the Town and has direct access to the Town Centre Car Park. The property has a contracted rent of €292,876 per annum and is anchored by The Odeon Cinema which occupies 1,568 sq.m and accounts for 27% of the schemes total contracted rent. In addition to the Cinema the property has 4 individual retail units & bowling alley all which are occupied and leased at an annual rent of €213,645. Dealz the UK discount retailer account for 22.5% of the schemes income. Adjacent occupiers include Tesco, Dunnes Stores and Boots.

For further details contact Paul Fahey of Bannon on 01 6477900 or Crotty Auctioneers on 049 436 5020.

NTMA offers outright buyback terms for Treasury Bond 2016

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The National Treasury Management Agency (NTMA) will, today, offer outright buyback terms for the 4.6% Treasury Bond 2016 and will also offer switch terms from the 4.6% Treasury Bond 2016 into the 3.9% Treasury Bond 2023. Those opting to swap the 2016 bonds will be offered 2023 bonds at a price of 114.177, a 2.095% yield. The debt agency has said the country is already fully funded for 2014 and has raised over 70% of the €8 billion earmarked to fully pre-fund for 2015.

A sale of 10-year paper in March was Ireland’s first bond auction since it was locked out of the market in September 2010 and it has continued to raise funds at record low yields this year. Next week’s bond auction, which will be held on Thursday, will be the only one held between now and the end of September.

Information sourced from www.ntma.ie

High Court decision in the Bewleys case overturned

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High Court decision in the Bewleys case overturned. Supreme Court unanimously finds that the upward only rent review provision in the lease stands.

The decision means Bewley’s must continue to pay the €1.46 million rent up to 2017 and the cafe company said today it was “immensely disappointed” with the outcome.

Bewley’s had claimed its lease allows rents to fall as well as fluctuate upwards while Ickendel claimed the terms meant rents cannot fall. The High Court heard various reports indicated commercial retail rents have fallen by over 50% while a 2013 judgement in the Circuit Court fixed a new rent on a Grafton street property at just 53% of the previous rent.

The court was concerned with construing rent review provisions in a commercial lease which are articulated in conventional terms, she said. If Ickendel was correct, the rent payable was €1.46 million but if Bewley’s was correct, it was some €728,187.

Sourced from the Irish Times

Changes to Commercial Rates Law effective today, 1 July 2014

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Changes to Commercial Rates law, which come into effect today, 1 July 2014, allow businesses to take up new premises without fear of facing rates arrears from previous occupiers whilst not affecting the collection powers of the relevant local authorities to recoup the rates arrears in question.

Under previous law dating back to 1838, a subsequent occupier of a commercial property could be held liable for up to two years arrears of rates which could not be recovered from the previous occupier. Section 32 of the Local Government and Reform Act 2014 removes liability from subsequent occupiers and instead imposes new duties on owners of commercial property.

The Act defines an owner as any person other than a mortgagee not in possession who is entitled to receive the rents from the property thus extending its application to landlords, receivers, liquidators and mortgagees in possession.

Under the Act, where a property or an interest in a property is transferred so that a change in the party primarily liable for rates occurs, two obligations are introduced.

1. An owner must notify the relevant Local Authority of the transfer within two weeks. It should be noted that a transfer would include not just the sale of a commercial property but also leases, assignments or surrenders.
2. The party transferring the property or interest in the property is obliged to discharge all rates for which he/she is liable for and on the date of the transfer.

Even though the Act provides that the primary liability of the previous occupier for outstanding rates is not affected, an owner can become liable for up to two years rates due by a previous occupier if the owner fails to notify the local authority within the permitted two weeks – or if the arrears are not discharged at the time of the transfer, even if those arrears in fact relate to another party’s occupation of the property.

Any rates due by an owner, and not discharged, shall remain on as a charge on the property for up to 12 years.

Potential purchaser/lessees will need to seek evidence at the time of the transfer that all rent arrears have been cleared and obtain evidence of notification of transfer to the local authority. Owners not in occupation will need to be particularly vigilant in insuring the prompt discharge of rates by occupiers given the risk of the possible liability for any arrears passing to that owner.

These changes come into effect on 1 July 2014.

SME reports €8.6bn in loans are in arrears over 90 days

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The Central Bank has published an SME Market Report compiled by economists in the Financial Stability Division. This report gives an up-to-date picture of developments in the Irish SME credit market, it provides information on credit demand, credit access, loan terms and conditions, loan default, interest rates and credit market concentration.

The report shows up to €8.6 billion in loans held by the covered banks to small and medium businesses are in arrears over 90 days. At the end of 2013, the average SME owed its bank €71,101 and was paying interest at 6.41 per cent. The numbers show that just over 26 per cent of all loans to the sector were in default, meaning that repayments on these debts were 90 days or more overdue.

The highest default rates are found among construction companies, hotels, restaurants, and SMEs with exposure to the domestic economy. The SME sector has been flagged as a huge problem for the Government. Last month the Government announced the creation of the Strategic Banking Corporation of Ireland, which has funds of €500 million, and which lend money to a SMEs through resident lending institutions.

Gross new lending to SMEs has remained static at €350m to €750m over the period between 2010 and the end of last year. The number of SMEs applying for credit has decreased from 40% to 35% between 2011 and 2014.

View Full Report SME Market Report: H1 2014

Ireland sells €500m of Treasury Bills by auction

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The National Treasury Management Agency (NTMA) has today completed an auction of Irish Treasury Bills, selling the target amount of €500 million. Total bids received amounted to €2.1 billion which was 4.2 times the amount on offer. The Treasury Bills, which have a maturity of three months, were sold at an annualised yield of 0.105%.

The NTMA has raised €6.5 billion of Ireland’s long-term money this year already, bringing it 81 per cent of the way towards its full-year funding target of €8 billion.

Ardstone Capital make profit on D4 Property

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David Carroll of Bannon has advised Ardstone Capital on their most recent Irish purchase of the Crampton Buildings in Temple Bar.  The investment manager acquired the block for €8.2m representing an initial yield of 6.15% which is occupied by a range of leisure and retail users.

The upper floors are held by Dublin City Council who are due to embark on a significant refurbishment of the old Artisan dwellings which will significantly enhance the immediate area. Bannon will continue to advise Ardstone on the asset management strategy for the block whilst also taking over the day to day management.

Ardstone originally bought the four-storey modern block at 85 Pembroke Road about 12 months ago for €4.75 million. The 875sq m (9,410sq ft) building was then occupied by AIB Capital Markets on a lease which then had a further 11 years to run.

Retail Ireland welcomes new Retail Consultation Forum

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Retail Ireland, the Ibec Group that represents the Irish retail sector, has welcomed the opportunity to participate in this week’s inaugural session of the Government’s new Retail Consultation Forum.

Retail Ireland has long campaigned for the establishment of a dedicated engagement forum between Government and the sector and welcomed the decision to establish the Retail Consultation Forum, announced earlier this year, as part of a number of initiatives under the Action Plan for Jobs 2014. The establishment of the Forum and the opportunity for Retail Ireland to participate in it is an endorsement of Ibec’s ongoing campaign to place retail firmly at the heart of Government thinking.

The Forum will meet quarterly with a different topic under consideration at each session. At this week’s meeting, Retail Ireland had the opportunity to engage with other industry representative groups to propose fiscal measures and other initiatives to support the industry under this year’s budget.

Information sourced from www.ibec.ie

New office construction gearing up

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Property developer Johnny Ronan is gearing up to re-enter Dublin’s office construction market after agreeing to buy a key site beside the former Burlington Hotel along with a UK partner for €40.5 million. The site has full planning permission for a high density office block with a net floor area of 15,384sq m (166,668sq ft). The site is currently occupied by a 1980s office block which has been vacant since it was sold in 2007 by Allianz Insurance to developer Bernard McNamara for €105 million.

Johnny Ronan was responsible for the vast majority of the large- scale office projects in Dublin in recent years including the 700,000sq ft Central Park; the 100,000sq ft high rise Monte Vetro sold to Google; the 200,000sq ft Connaught House and Bank of Ireland HQ on Burlington Road and the 400,000sq ft PwC and Fortis blocks at Spencer Dock along with the adjoining National Convention Centre.

There has been no new office construction in the city for the last six years and the only two office blocks currently being developed in Dublin – at Canada House on St Stephen’s Green and the Veterinary College in Ballsbridge – are being built by telecoms billionaire Denis O’Brien and the Galway-born Comer brothers.

Story sourced from the Irish Times

Construction activity builds upwards according to recent PMI

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Ulster Bank’s monthly construction purchasing managers’ index (PMI)

Ulster Bank’s monthly construction purchasing managers’ index (PMI),  a seasonally adjusted index designed to track changes in construction activity, posted a score of 60.2 points for May; down on the previous month’s 63.5 point reading but still ahead of the neutral 50-point mark which separates a sector in decline from one in growth mode. The rise in new business came from both domestic and external markets.

Sharp expansion in commercial activity
The commercial sector was the best-performing again in May with a score of 61.4, while a strong expansion in housing activity was also recorded during the month. While May’s index showed a strong expansion in housing activity, it was the commercial sector which once again led the overall sector’s growth.

Rises in purchasing and employment
Higher activity led construction firms to raise their buying activity and take on extra staff during May. Employment increased for the ninth consecutive month and the rate of job creation remained sharp despite easing from the previous month. Growth of input buying also remained strong during May, with around 30% of respondents increasing their purchasing levels.

View Full Report Ulster Bank Construction PMI Report (RoI)

NAMA’s financial highlights 2013

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NAMA continues to be profitable according to the 2013 Annual Report Summary released this morning. Nama reports a profit after impairment, tax and dividends of €211m, making an operating profit, before tax and impairment charges, of €1,198m in 2013, an increase of 45% over 2012.

In the chairman’s report it states NAMA invested €600m in commercially viable projects in their Irish portfolio and have committed to investing at least €2.5 billion in total development funding in Ireland by the end of 2016 if suitable commercial opportunities present themselves. 92% of NAMA’s Irish portfolio is located in Dublin, in the counties contiguous to Dublin and in Cork, Limerick and Galway and it is in these areas that demand for commercial and residential assets has emerged most strongly over the past year. NAMA generated cash proceeds of €4.5 billion in 2013.

Another major objective NAMA has to fulfil is their commercial remit within the shortest feasible timespan. Of the €30.1 billion of the senior Bonds that NAMA originally issued, just under €20 billion was outstanding by the end of march 2014.

View Report:NAMA Summary Report 2013 (PDF)

Aldi to open a further seven stores in Ireland

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Aldi Stores (Ireland) yesterday announced it is opening a further seven stores and hiring an additional 450 employees in 2014. The new roles will be created nationwide, as Aldi continues to expand its store network, building on the momentum which has seen the retailer grow year on year sales by over 22% to capture 8% of the Irish grocery market.

High Court approves scheme for Elverys Sports

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The High Court has approved a survival scheme for one of Ireland’s best known brands, Elverys Sports which employs some 700 people full and part-time in 52 stores across the country. The scheme, supported by the National Assets Management Agency (Nama), will see Staunton Sports exit examinership on Friday.

NAMA announces sale of the Project Tower loan portfolio

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NAMA announces the sale of the Project Tower loan portfolio to Blackstone Real Estate Partners Europe, Blackstone is one of the world’s leading investment and advisory firms. The portfolio relates to loans secured on assets under the control of the O’Flynn Group which was one of the biggest Irish construction companies. The assets are located primarily in Ireland, the UK and Germany.

The Project Tower portfolio has a book value of €1.8 billion. Blackstone’s is believed to have paid €1.1 billion, which reflects an approximate 37% discount to the outstanding balance and €100 million above the €1 billion “reserve price” mandated by NAMA, which is effectively the minimum price indicated to all parties at which a trade would be accepted.

The deal is expected to complete this week. NAMA said it would not disclose the terms of the deal as they were commercially sensitive. UBS sold Project Tower on NAMA’s behalf

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