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

NAMA to sell €3.5 billion of loans and property assets

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NAMA, having already agreed the sale of its Northern Ireland portfolio, is selling more than €3.5 billion worth of loans and property assets in the Republic which includes Project Redwood, a €200 million portfolio of commercial assets in Dublin, which was recently launched and is expected to attract “strong interest”, Nama chief executive Brendan McDonagh told a conference hosted by the Sunday Business Post in Dublin yesterday.

Brendan McDonagh promised that NAMA will bring packaged portfolios, each with a minimum value of €250 million, to the market in each quarter.

For more information please contact Rod Nowlan, David Carroll, or Neil Bannon of Bannon

NTMA to hold Bond Auction on 8th May

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The National Treasury Management Agency (NTMA), which manages the national debt, announces that it will hold a bond auction tomorrow, 8th May. The auction will be conducted on the Bloomberg Auction System and will be confined to recognised primary dealers. A non-competitive auction for 15 per cent of the amount sold in the competitive auction will immediately follow and will close at 10:00 am on Friday 9 May.

The details of the auction are as follows:

• Bond to be auctioned:  3.40% Treasury Bond 2024
• Auction size:  €750 million
• Auction opens:  8:00 am
• Auction closes:  10:00 am
• Settlement Date: 13 May 2014

The NTMA raised €1bn in a bond auction last month. That issue was 2.8 times oversubscribed. The auction of the 3.4pc treasury bonds resulted in a yield of 2.917pc. Following that auction, the NTMA has raised €5.75bn in the bond markets so far this year, which is more than 70pc of its €8bn funding target for the full year.

Please see the NTMA’s website www.ntma.ie for further details of the Primary Dealer System and bond issuance arrangements.

Retail Ireland urges Government to cut income tax

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Retail Ireland, the national representative body for the entire retail sector, in advance of a conference in Dublin today, has called on the Government to cut income taxes, promote better regulation for the sector and do nothing to add to business costs and claimed that the sector has the potential of creating 40,000 new jobs in the sector in coming years.

The lobby group says that recent retail sales figures have shown that while the volume of sales (excluding cars and bars) has increased by 2.2% in the past year, the values of sales has stayed the same. This clearly indicates that shops are aggressive discounting in an effort to attract customers. The pressure on the sector remains. To address the key challenges that still face the sector, Retail Ireland called on government to Cut income tax, this will put more money into the pockets of Irish consumers, and ultimately benefit the Exchequer though greater economic activity and tax revenue.

Retail Ireland MasterCard Annual Conference – 6th may 2014 www.retailireland.ie

Ikea’s plan for ‘flagship’ store in Cherrywood will not proceed

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Ikea , the Swedish household goods multiple, will not be permitted to proceed with its plans for a new 35,000sq m “flagship” store in the Cherrywood area of south Co Dublin. The company had sought to have the latest masterplan for this strategic development zone (SDZ) amended to include large-scale retail warehousing to accommodate a “flagship project of national significance”.

But An Bord Pleanála, in its decision to approve the SDZ masterplan, made no provision for such a development – in line with the recommendation of senior planning inspector Tom Rabbette, who had presided at a lengthy oral hearing.“I would not recommend that the board insert a specific objective allowing for a large-scale retail warehouse use in Cherrywood and I would not recommend that the board modify the proposed land uses to accommodate such a use,” he said.

To secure a site of 0.8ha for the retail warehouse and parking for 1,500 cars, the company wanted the masterplan modified to “rezone” a specific site off Wyatville Link Road for the proposed development and include it in the first phase of Cherrywood. But Green Party transport spokesman Tom Kivlehan argued that such a “destination-type retail offer” would have traffic implications for the area – a view also taken by the National Roads Authority (NRA) – and that retailing in Cherrywood was always intended to be local.

Depending on the outcome of a joint study by the council, the NRA and the National Transport Authority, the council could “at some stage in the future” vary the planning scheme for Cherrywood by including provision for a “large-scale retail warehouse”, he said. An Bord Pleanála generally approved the Cherrywood SDZ planning scheme, which covers an area of 800 acres – the largest undeveloped area within the M50. The scheme provides for approximately 70,000sq m of offices, a town centre and up to 7,000 new homes.

€130m for Nama Acorn Portfolio

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Joint agents Bannon and JLL have been appointed to handle the first single lot sale of a NAMA shopping portfolio comprising Blackpool Shopping Centre and Retail Park in Cork, Millfields, Balbriggan, Co Dublin and The Showgrounds, Clonmel, Co Tipperary, at a guide price of more than €130 million. At that valuation, the portfolio will show an initial yield of about 9.6 per cent. Stephen Tennant of Grant Thornton is to oversee the sale of the Acorn Portfolio just as the real estate market is experiencing a tangible turnaround with overall returns at 7.2 per cent in the first three months of this year, marking the best performance since 2006.

The three centres are producing a rent roll of €13 million after allowing for rent abatements. About 75 per cent of the overall space of 62,705sq m (675,000sq ft) is let to institutional-type traders on leases which have an average of 11 years to run.  David Carroll of Bannon expects considerable interest in the portfolio given it offers investors an immediate exposure to the Irish domestic recovery story underpinned by regionally diverse assets.

For more information please contact Rod Nowlan, David Carroll, or Neil Bannon of Bannon

www.acornportfolio.com

Ernst and Young to create almost 500 new jobs in Belfast

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Accountancy and consultancy firm Ernst and Young, known as EY, is to expand its operation in Belfast with creation of nearly 500 new jobs. EY which already employs 1,450 people across its five offices in the Republic and Northern Ireland, said the 486 new roles which will be phased in over the next four years would be in various business consultancy fields, including auditing. These new jobs will contribute £19 million in salaries to the local economy.

Invest Northern Ireland is providing just over £3 million in grant aid to support the project and Northern Ireland’s Department of Employment and Learning is also providing training support. Northern Ireland First Minister Peter Robinson said securing “these high quality jobs” had been a “real coup” for the region.“This announcement sends an unambiguous message to international investors to have confidence in Northern Ireland as a competitive location from which to grow their business,” he added.

EY Ireland managing partner Mike McKerr said the new roles would comprise of a mobile and static workforce to provide assurance and advisory services to its domestic and international client base. “This announcement will help the firm to achieve its twin targets of increasing its market share and delivering a quality, cost-effective service to its customer base,” he added. Ernst and Young has its headquarters in London and employs about 175,000 worldwide. It had global revenues of almost $26 billion (€19 billion).

 

Summary of “The Commercial Property Review & Outlook 2014”

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A Summary of the Commercial Property Review & Outlook 2014 published by the Society of Chartered Surveyors Ireland (SCSI).

Offices

The office sector in Dublin is leading the way in the Irish Commercial Property Market. The SCSI Commercial Property Review & Outlook 2014, published in conjunction with Amárach Research, confirms that prime office rents in Dublin are between €350 per square metre and €377 per square metre in Quarter 1 2014 based on improved activity levels at the end of 2013 and start of 2014. There was a 23% increase in office take up in 2013.  While the turnaround was mainly driven by Dublin’s office market, improvements in the Irish economy in the second half of 2013 led to growth in both the retail and industrial sectors by the end of Quarter 4. The vacancy rate for prime office space has fallen close to 9%, and two thirds of Chartered Surveyors expect the supply of prime office space in Dublin to decrease significantly over the coming 12 months.

Industrial

Take-up in the industrial sector increased by 18% in 2013 and rents remained steady in 2013. Although there is an oversupply in certain locations, there is increased demand for prime industrial space, in particular by online companies with a greater need for modern logistics and distribution centres. Industrial prime rents have remained steady in Dublin at €61 per sq.m. per annum. Industrial rents increased in all categories in Leinster.

Retail

Rents for prime retail in Dublin continued to fall in 2013 and are now just above the €4,000 per square metre per annum mark. Rents for major town centre style malls showed a marginal decrease, indicating that rents in this sector have stabilised. Rents for prime retail increased in Leinster and are now at €325 per square metre, an increase of 7.3%. Rents for prime retail continued to fall in Munster in 2013 reflecting tough trading conditions in Cork City, Limerick City and Waterford City. On the other hand, rents increased across most retail categories in Connaught/Ulster in 2013, possibly reflecting more buoyant conditions in Galway City.

Investment

Approximately €1.9bn was invested in the Irish property market in 2013, which is three times more than in 2012. According to a report on Emerging Trends in Real Estate Dublin is the top spot in Europe for new investments in 2014. This is attributed to Ireland’s economic turnaround, falling unemployment and a forecast GDP growth of 2% in 2014, as well as the perception that prices have bottomed out and are beginning to recover. The main demand was for large office properties and growth was also recorded for industrial and retail properties.

Over half of investment spend in 2013 came from international investors with strong demand from the US, Europe and Asia. This is set to continue as an international report ranked Dublin as the number one location in Europe for new investment in 2014. This predicted growth is based on Ireland’s economic recovery.

Development Land

Non-agricultural land sales were up four fold between 2012 and 2014. This activity in Dublin is being driven by the improving office market and the increasing demand for family homes in the residential market.

For full report please go to www.scsi.ie/commercialreport2014

Two restaurants on high-profile sites for sale at fraction of original cost

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Two fully glazed stand-alone restaurants on high-profile sites along the river Liffey campshires at North Wall Quay in Dublin 1 are to be offered for sale by tender at a fraction of their original cost, with a guiding price of €350,000 for the J2 Grill & Sushi building and €400,000 for the slightly larger single-storey premises close by that currently is vacant.

David Carroll of Bannon advised two of the purchasers.

The north docks has been substantially transformed in the past decade or so with the development of Spencer Dock and more recently the completion of Convention Centre Dublin and the Point Village. Even without taking site values into account, the Dublin Docklands Development Authority (DDDA) spent €1 million about 15 years ago developing each of the two distinctive buildings, which were designed to cater for the dining needs of workers in the adjoining International Financial Services Centre.

More good News for Dublin’s Office Market

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Airbnb, the world’s leading community-driven hospitality company, last Friday marked the official opening of its new Dublin office with Taoiseach Enda Kenny T.D. announcing the creation of an additional 100 new roles which increases to 200 new roles in Dublin.

Airbnb plans to double the size of its EMEA operation in Ireland to 200 employees by year end, with recruitment already started for roles in the customer experience and hospitality teams.

Attending the official launch event, Brian Chesky, co-founder and chief executive officer of Airbnb said,“We came to Dublin because it has hospitality in its DNA and I’ve been so inspired by the culture we’ve already created in our office here. We have an amazing home in Dublin from which we’re supporting our community across Europe and I can’t wait to welcome another 100 people to join us.”

Modern Retail Warehouse Park Units in Carlow for Let

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Modern, purpose-built Retail Warehouse Park, Barrow Valley Retail Park is available for Let on new leases.  It is a high profile location with over 500 metres frontage to the N80 Northern Relief Road. Easily accessible, convenient location 2km from Carlow Town Centre, which has a population of 23,030.

Please view our online brochure: Barrow Valley Retail Park, Carlow
For further information please contact Cian McMorrow on 01 6477900

Two development sites in Limerick for Sale

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Two new development sites have come to the market in Limerick, both sites are zoned Industry under the Limerick
County Council Development Plan 2010 – 2016.
Limerick is Ireland’s third largest City with a population of 100,000 people.
Multinational companies in Limerick include Intel, GE Capital, Shannon Aerospace and Lufthansa Technik

Dock Road Roundabout, Dock Road, Limerick City
0.74 ha. (1.84 acres)
Uses permitted in principle include: Petrol station, Car Repair/Sales, Warehouse
Uses open for consideration include: Retail Warehousing, Office, Logistics, Local Shop, Restaurant/Cafe, Garden Centre
0.74 ha. (1.84 acres)

Foynes Port, Foynes, Co. Limerick
35.88 ha. (88.66 acres)
The designation is primarily to cater for port industries which are heavy industries by nature.
35.88 ha. (88.66 acres)

Further information is available in the online brochures and from Cian McMorrow from Bannon on 01 6477900

Society of Chartered Surveyors - SCSI Ireland

Address

Hambleden House
19-26 Pembroke Street Lower
Dublin 2
D02 WV96
Ireland
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Phone: +353 (1) 6477900
Fax: +353 (1) 6477901
Email: info@bannon.ie

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