Lucy Connolly – Divisional Director – “The anticipated impact of covid-19 on the Dublin office market translated to a take up figure of 75,000 sq.ft. this quarter. We do expect to see a busier Q3 with over 700,000 sq.ft. of accommodation reserved, with some large transactions close to completing in the coming weeks. We commenced the quarter on a positive note with the recent announcement that Gilead are to create 140 new jobs following their letting of over 30,000 sq.ft. at North Dock”.
Hibernia REIT has let the remaining space in its 2WML building to online fashion platform Zalando Ireland.
The 47,500 sq.ft has been rented on a 15-year lease, with term certain of seven years, at initial rent of €2.9 million per annum – almost €60 per square foot.
The building is now let to Zalando, Udemy and gym firm Perpetua, at a contracted rent of €3.9 million per annum.
The news follows Hibernia Reit’s statement earlier this month that negotiations over leases on the majority of its vacant office space were “advanced” following an active fourth quarter in the Dublin office market.
“Following this letting the Quarter’s circa 400,000 sq.ft of office accommodation is fully occupied, marking the completion of a six-year programme to transform the Windmill Lane area in Dublin’s South Docks and the creation of our first cluster of office buildings,” said Justin Dowling, Hibernia’s director of property.
Hibernia REIT has made two acquisitions in recent months as it bought assets next to properties it already owns.
In a trading update covering the period from October to today, the commercial property firm said it spent €2.5m on the two acquisitions.
Hibernia REIT also said it was in negotiations with tenants to take 56,000 square foot of space in its redeveloped property on Cumberland Place in Dublin city centre.
In today’s trading update, Hibernia said the Dublin office letting market saw another highly active fourth quarter, following two relatively quiet quarters.
It noted that take-up exceeded 3.3 million square feet in 2019 as a whole.
While this was lower than 2018, when a record 3.9 million square feet was leased, a number of deals were outstanding at the end of the year, with over 1.3 million square feet of space reserved.
“In addition, active demand at year end stood at 3.8 million square feet, which should be supportive for the occupational market in 2020,” Hibernia REIT said.
Hibernia said the vacancy rate in its in-place office portfolio remains at 12% and is mainly across its 2WML, Central Quay and the Forum developments.
It said it has made good progress in lease negotiations for the majority of the space available, adding that it expects these to start concluding shortly.
Kevin Nowlan, chief executive of Hibernia, said that the Dublin office letting market ended 2019 strongly, with a pick-up in demand from tenants of all sizes, after a quieter period in the middle of the year, particularly for smaller occupiers.
“Levels of active tenant demand remain high and 2020 has started positively,” he said.
“Property investment market volumes set a new record in 2019 though it remains to be seen how the market reacts to the tax changes introduced in the recent Budget,” he added.
Mr Nowlan said Hibernia REIT had made good progress with the lease negotiations that are ongoing over much of the available space in the office portfolio.
“We continue to work on advancing our development pipeline and have made two small property acquisitions to enhance the future value of the assets we already own,” he said.
“Hibernia remains well-positioned with an extensive development pipeline, low financial leverage and a talented team,” he concluded.
Connectivity is firmly established as a necessary utility for office tenants. However, there are still many office locations that don’t deliver the connectivity that businesses require. A Bisnow survey carried out in September found that 69% of businesses had moved location to improve connectivity, while 41% of respondents said poor quality connectivity hindered them from doing their job properly on a weekly basis.
The savviest landlords and developers are therefore using all available technologies to achieve high connectivity. Dublin Airport Central has taken IT infrastructure seriously from the first stages of development, and the scheme has now achieved WiredScore Platinum certification.
“Today, fast internet is the most important factor for specific companies searching for office space who see their IT infrastructure as more important than the physical building they occupy,” DAC Head of Sales and Marketing Paul Byrne said. “Until now there has been very little information available to tenants about the quality of internet connectivity in office spaces. Wired Certification provides that transparency and access to information for tenants.”
What Good Connectivity Means
WiredScore has quickly become a recognised benchmark for a landlord to demonstrate a property’s level of connectivity. To achieve Platinum certification, the development must demonstrate an extremely high quality of infrastructure, as well as factors such as good communication with fibre providers, in-building mobile planning and free WiFi in common areas.
All these elements come together to provide a high level of experience for those who use the building. They come at a cost to the developer, of course, but the return will be an increased level of tenant interest. Businesses will increasingly turn away from offices that don’t meet their connectivity requirements.
Additional concerns for a landlord or property owner are IT security and reliability. Business operations are now so dependent on the internet that tenants need to be assured that they can stay online at all costs.
“At DAC we have installed multiple diverse routes underground that deliver fibre optic connectivity to the IT hub in each building,” Byrne said. “In addition, there are several different IT routes into the overall campus for further security. Being an airport city, IT security is one of, if not the, most important requirements we deliver for our customers.”
To ensure reliability, developments are increasingly including back-up generators to supply emergency power if needed. DAC has taken this further by providing space within the buildings’ plant areas for tenants to install their own private generators.
Future Proofing
It’s not enough for a business to improve connectivity for today’s technology, however. The speed of improvements to both wireless and mobile connectivity and what can be done with technology mean that an office provider must keep one eye on the future. “We have invested and we continue to invest very significant capital into future proofing our campus,” Byrne said. “In a rapidly evolving digital economy, technology is increasingly central to operations. Fast and reliable connectivity is the lifeblood of any modern business.”
An example of DAC’s investment in future proofing is the inclusion of a distributed antenna system to effectively provide high-speed wireless coverage across the campus buildings. This means that when 5G is rolled out, for example, high mobile connectivity should be available.
“Being an airport city, physical connectivity has always been one of our main unique selling points in terms of attracting companies here,” Byrne said. “However, in respect of the actual building and services, achieving world class IT infrastructure was a goal for us from the very beginning as we have always recognised that business continues to evolve at a rate of knots and we must stay up with the pace. For perspective, the iPhone only turned 12 this year, it still isn’t even a teenager. Where will the world be in a decade?”
We are already getting glimpses of how 5G, artificial intelligence and the Internet of Things will change the way we operate. To ensure businesses can make the most of new technology when it arrives, a landlord must lay the IT foundations today.
This feature was produced by Bisnow Branded Content in collaboration with Dublin Airport Central.
The combination of Dublin’s status as a location to deploy international capital and its standing as the city favoured by global tech giants for their European headquarters is expected to spur significant interest from European and international investors in the sale of Fitzwilliam 28.
Located on Fitzwilliam Street and at the heart of the traditional central business district in Dublin 2, the building, which has just been leased in its entirety to workplace collaboration tech giant Slack Technologies, is being offered to the market by joint agents Savills Ireland and Bannon at a guide price of €168 million.
Fitzwilliam 28 is one of two adjoining but independent blocks both being developed by Ireland’s largest utilities company, the ESB. The sister block to 28, Fitzwilliam 27 will be owner-occupied by the ESB.
Upon completion in the second quarter of this year, Fitzwilliam 28 will comprise 12,599.2 sq.m (135,617 sq.ft) of prime grade-A accommodation over eight floors with 50 car-parking spaces.
Slack Technologies have taken a new long-term lease of the entire building from practical completion. The rent roll will be in excess of €7.7 million per annum, reflecting an initial yield of about 4.2 per cent. Colliers International represented Slack Inc in the recent letting, while Savills Ireland and Bannon represented the landlord.
Slack’s decision to rent all 135,617 sq.ft of space at Fitzwilliam 28 will give it the capacity to add as many as 1,100 jobs in Dublin. The company currently employs about 180 people at its existing European headquarter operations at One Park Place on nearby Hatch Street.
In terms of specification, Fitzwilliam 28 will feature extensive landscaping and sunken gardens, a double-height reception with marble walls and natural stone floored area leading to a centralised core offering the occupier maximum flexibility. The A3 BER-rated building will also feature more than 1,759 sq.m (18,933 sq.ft) of rooftop, courtyard and terrace gardens, providing extensive views of Dublin, in particular Merrion Square.
The building is designed by internationally acclaimed Grafton Architects and O’Mahony Pike Architects. PJ Hegarty & Sons, who are the leading design and build contractors in Ireland, are the contractors. They have a strong track record of developing high-profile offices. Recent experience includes No 10 Molesworth Street, AIB’s new corporate headquarters, and No 40 Molesworth Street, Jet. com’s headquarters.
The Fitzwilliam scheme enjoys a prime location within close proximity to Government Buildings, the traditional retail core of Grafton Street and St Stephen’s Green and the city’s south docklands. The immediate area is well serviced by Dublin’s public transport network with both the Luas and Dart, and numerous Dublin Bus routes located within a short walk.
Fergus O’Farrell, director of investment at Savills Ireland, says: “Interest remains strong in the office sector. Dublin’s strong occupier market and economy, coupled with the quality of this asset and its central business district location, will attract interest from global investors.”
Rod Nowlan, investment director at Bannon adds: “As proven by recent lettings to the likes of LinkedIn, Twitter and Stripe, modern offices of scale situated in the traditional city core represent the focus of the current and likely future wave of occupiers. This reflects an increased emphasis by companies on “employee experience”, and there are few modern buildings that can deliver on this aspiration more than Fitzwilliam 28.
With 3 transactions in excess of 100,000 sq. ft. take-up reached an impressive 1.2m sq. ft. in Q4. This brings the year-end total to 3.29m sq. ft. across 204 transactions. Full report to follow.
Companies priced out of Dublin’s core central business district and the prime postal code areas of Dublin 2 and Dublin 4 will be interested in the opportunity to locate at 6 Northbrook Road.
Situated within a five-minute walk of Leeson Street and Ranelagh Road, this Victorian property has been thoroughly refurbished to provide more than 9,400 sq.ft of office accommodation over four floors at a competitive €45 per square foot.
Quite apart from the immediate cost benefit available to the prospective occupier, 6 Northbrook Road offers the benefit of modern open-plan and cellular office accommodation complemented by numerous of the building’s original Victorian features, including stained-glass windows and an impressive central staircase.
In terms of its facilities, the property’s specification includes: Cat 5E cabling, generous floor-to-ceiling heights throughout, recessed spot and ornate feature lighting, gas-fired central heating, floor boxes and part perimeter trunking, tea stations, solid timber flooring in part, shower rooms, an eight-person passenger lift and ladies’ and gents’ toilet facilities on all levels.
Externally, the building features a landscaped set-down area, a communal summer garden to the rear, 11 car-parking spaces and bike storage.
The property is well connected in terms of public transport. Charlemont Luas stop is just 450m away while the quality bus corridor on nearby Leeson Street Upper is served by 10 Dublin Bus routes. The surrounding area offers numerous amenities including restaurants, cafes and bars such as the Sussex, Canal Bank Cafe, Dillingers, the Butcher Grill, Bunsen, and Cinnamon.
Rebecca Jones, who is handling the letting on behalf of Bannon, says she expects to see “significant interest” from occupiers looking for a location for their headquarters within close proximity to Dublin’s central business district.
Contact our Office Department today for more information on 01 6477900
Hibernia Reit has sold a south docklands office block for €6.9 million more than it paid for it 14 months ago.
The sale, in which Bannon acted for the vendor and Knight Frank for the purchaser, is to a German pension fund which has secured an initial yield of 4.65%. This off-market transaction underlines the considerable weight of international capital competing for exposure to the Dublin market.
Hibernia bought the mid-sized office building at 77 Sir John Rogerson’s Quay last February for €28.7 million.
Its sale for €35.6 million, after deducting €200,000 on improvement works, marks a 24% rise in value.
After buying the building, Hibernia quickly agreed to let it to Regus on a 25-year lease from mid-2018 at an initial rent of €1.8 million and a nine-month, rent-free period. This letting was also handled by Bannon.
Built in 2004
The six-storey building was built in 2004 and includes 3,196 sq.m (34,400 sq.ft) of office space and 20 basement car-parking spaces. Individual floor plates extend to 540 sq.m (4,812 sq.ft).
Prior to its sale last year, it had been used as serviced offices by Fitzwilliam Properties since 2006. A number of high-profile foreign direct investment companies – including LinkedIn, PTC Bio, Indeed, Zendesk and Future Finance – got their first taste of the south docklands through short-term rental arrangements at No 77.
The area around the building is one of the most vibrant hubs in the docklands, with the tenant line-up including Accenture, Airbnb, BOI, Facebook, Google, State Street, TripAdvisor, Matheson, LogMein and BNY Mellon.
It will be interesting to see if the sale of 77 will renew interest in the nearby Reflector office block on Hanover Quay which went on the market in February through Savills and CBRE with a guide price of €155 million.
This prime block is probably the standout Dublin asset on the market at the moment. It will produce an annual rent roll of about €7 million and, given its asking price, would suggest a net initial yield of 4.2%.
No 77 is within 10 minutes’ walk of Luas and Dart services and is close to the Bord Gáis Energy Theatre and the 3 Arena.
Dublin Airport Central, a major new office development in the heart of the airport campus, has landed a high-profile anchor tenant for the first of two headquarter-style buildings now under construction.
US multinational food company Kellogg is to relocate its 220 Irish and European office staff to Three Dublin Airport Central, where the six-storey block will be located close to Terminal 2.
Kellogg will take 3,600 sq.m (38,750 sq.ft) of the 8,500 sq.m (91,494 sq.ft) in the first block at a rent of €363 per sq.m (€33.75/sq.ft). Car parking spaces will cost an additional €1,750 per space.
Kellogg is currently based at Airside Business Park on the outskirts of Swords and expects to begin the fit-out of its new headquarters by the second quarter of 2019. The company will have the use of 2½ floors and around 65 car-parking spaces in the block, which is being built to international standards.
Construction is also well advanced on a second block, Two Dublin Airport Central, which will extend to about 11,500 sq.m (123,786 sq.ft).
The Dublin Airport Authority has planning permission for four corporate buildings, with 41,700 sq.m (448,854 sq.ft) of offices and associated facilities. DAA chief executive Dalton Philips said he was delighted to have secured Kellogg as the first tenant.
“We can’t wait to welcome Kellogg and its employees to their new home. Ireland is well recognised as a world-class location for business and Dublin Airport Central can accommodate the requirements of major multinationals such as Kellogg and also Irish firms seeking a modern, flexible location with unmatched connectivity.”
The two office buildings under way are the first newly constructed blocks at the airport and follow the redevelopment of the 1960s former Aer Lingus headquarters, which is now known as One Dublin Airport Central and accommodates about 500 ESB international staff.
With construction of the two new office building well under way there has been “very strong interest in Dublin Airport Central from a range of potential tenants,” according to Brian Coppinger, head of Dublin Airport Central.
He said the business park appealed to internationally-focused firms due to its unrivalled location, the high quality of the buildings, the amenities available on site and the flexibility for future growth.
The Dublin Airport campus is home to more than 200 businesses, which together employ more than 19,000 people. It has more than 30 restaurants and cafes, a range of retail outlets, and leisure facilities including a gym and swimming pool.
Last year Dublin Airport handled 30 million passengers and so far this year the numbers are 6% higher.
Handling the letting along with agent Bannon is BNP Paribas Real Estate. Cushman & Wakefield acted for Kellogg.
Dublin is now the most popular post Brexit location for UK firms over its European peers (Frankfurt, Luxembourg and Paris) in terms of company moves (not staff numbers) according to the latest EY Brexit Tracker. This is despite the perception that the city has lost out to its competitors due to the erosion of competitiveness, lack of residential rental supply, a cautious regulator and limited infrastructure.
The EY Brexit Tracker found that 21 firms (we have broadened the definition and have identified 23 firms) have confirmed they will shift some or all of their operations to Dublin. This places Dublin ahead of Frankfurt, with 12 firms, Luxembourg with 11 and Paris with 8 firms.
Breakdown of Goodbody Data Analysis:
Sector Breakdown (Re-locations):
– 57% are within the financial services sector
– 27% are within the legal sector
– 9% are within the insurance sector
– 4% are within the fintech sector
– 4% are within the services sector
– 100% of announcements have been for the Dublin region.
A further 17 firms are noted as planning to increase their presence within Ireland due to Brexit adding at least 1,000 employees to their Irish operations. Such expansions are likely to create demand for a further 200,000 sq ft of office space.
Sector Breakdown (Expansions):
– 82% are within the financial services sector
– 6% are within the legal sector
– 6% are within the insurance sector
– 6% are within the fintech sector
County Breakdown (Expansions):
– 77% are expanding their presence within Dublin
– 12% are expanding their presence in Cork
– 6% are expanding their presence in Limerick
The emerging consensus is that Brexit will not play a significant role in driving office rental growth in Dublin, with existing take-up patterns (Tech dominated) continuing to dominate. Nonetheless, the city has sufficient office space capacity and developments in the pipeline to deal with this additional channel of demand. Furthermore, such moves are welcome in diversifying the occupier base of the Dublin office market and add to an already strong demand base. This is evident in our analysis on estimated office space requirements for the publicly announced moves over the last two years.
Dublin Office Market reported by Goodbody
Irish Life has found tenants for a newly developed office block at the Irish Life Centre on Lower Abbey Street, Dublin 1.
Depfa Bank, formerly based in the nearby IFSC, has completed contacts to lease 1,856 sq.m (20,000 sq.ft) on the third and fourth floors of Block 5 at a rent of €484 per sq.m (€45/sq.ft).
The second tenant, Apex Fund Services, is understood to have made a commitment to lease 1,383 sq.m (15,000 sq.ft) at a headline rent similar to the one agreed with Depfa Bank.
Block 5 has an overall floor area of 3,716 sq.m (40,000 sq.ft) and is finished to a high specification, including a reception area of 1,600 sq.ft. The building benefits from the creation of a new civic plaza to the front.
Depfa Bank is a wholly-owned subsidiary of the German state agency, FMS Wertmanagement.
Apex Fund Services was established in Bermuda in 2003 and has around $350 billion in assets under management.
Deirdre Hayes, head of property asset management at Irish Life Investment Managers, called the wider Irish Life centre campus an integral part of the Dublin landscape. So it was essential that the latest phase provided a quality, sustainable space that met market requirements. “We are delighted with the outcome and welcome both Apex and Depfa Bank as our new neighbours within the development,” she said.
“Great to be involved in another successful Irish Life office project.” – Bannon Office Department
Bannon are delighted to officially launch ‘Fitzwilliam 28’ today, a state-of-the-art office development currently under construction at the heart of Dublin’s historic Georgian core.
Extending to approximately 12,500 sq.m (134,548 sq.ft) and capable of accommodating upwards of 1,200 workers, Fitzwilliam 28 is being delivered by leading contractors PJ Hegarty, along with the adjoining Fitzwilliam 27 on the site of the ESB’s former headquarters on Fitzwilliam Street Lower.
At 13,500 sq.m (145,312 sq.ft), Fitzwilliam 27 will have the capacity for 1,300 workers and is set to serve as the new ESB head office.
Located immediately next to Merrion Square, the overall scheme – which is due for completion in spring 2020 – involves retention and refurbishment of a number of protected Georgian structures and the construction of the two new seven-storey office blocks designed by internationally acclaimed Grafton Architects, and O’Mahony Pike Architects.
The redevelopment of the site, which is effectively an entire city block, was given the green light by An Bord Pleanala in late 2015.
Joint agents Savills and Bannon will be quoting a rent of €619 per square metre for Fitzwilliam 28 based on a single tenancy.
The building’s key features will include:
Commenting on the opportunity Fitzwilliam 28 presents for the potential occupier, Savills Ireland chairman Roland O’Connell and Lucy Connolly of Bannon said: “There is simply no similar office development of this scale and flexibility available in the heart of the Georgian core and traditional CBD, close to all amenities and facilities, and certainly not with the sense of place and historic relevance this scheme exudes.
“With the understandable development constraints inherent in this area of architectural beauty and heritage it is unlikely we will see another new office scheme of this scale developed in this location again.”
ESB chief executive Pat O’Doherty said: “Today marks another key milestone in this project and I know that the new building will create a modern, sustainable and innovative office space which will reduce carbon emissions, as well as deliver an attractive commercial property in Dublin’s historical Georgian Quarter.”
Contact Lucy Connolly or Cian McMorrow in our office department today on 01 6477900 for further information.
Hibernia REIT plc (“Hibernia”) announces that it has exchanged contracts to acquire 77 Sir John Rogerson’s Quay (“77 SJRQ”) for €28.7m.
77 SJRQ is a six storey office building of 34,400 sq.ft with 20 basement car parking spaces which was constructed in 2004. The building is situated towards the eastern end of Dublin’s South Docks where a number of large development projects are nearing completion. Hibernia is acquiring the building vacant and expects to spend €0.5m on improvement works: including these the purchase price equates to a capital value of €850 per sq.ft for the office space.
Separately, Hibernia has agreed to let the entire building to a subsidiary of International Workplace Group plc (“IWG”, formerly Regus) on a 25 year lease, with 15 years term certain. IWG will pay initial rent of €1.8m (€50 per sq.ft) and will receive nine months rent free: the lease is expected to commence in mid 2018. The net yield will be 5.8% after expiry of the rent free period, rising to 6.3% following a fixed uplift in rent after year five.
Kevin Nowlan, Chief Executive Officer of Hibernia, said:
“We are delighted to be acquiring 77 SJRQ and welcoming IWG as a long-term tenant. The eastern end of the South Docks is undergoing a transformation with several large development projects approaching completion and occupiers such as JP Morgan and Indeed.com joining State Street, Accenture and AirBnB in the area. The simultaneous agreements show Hibernia’s ability to drive value through combining our asset management and deal sourcing capabilities.”
Bannon Capital Markets acquired the building whilst Bannon’s office team sourced and secured the leasing deal to IWG.
The international law firm Walkers will double its Dublin office space when the firm moves shortly to The Exchange at the International Financial Services Centre.
Walkers will occupy 1,781 sq.m (19,178 sq.ft) on the penthouse floor of the five-storey building, which has an overall capacity of 9,986 sq.m (107,500 sq.ft). Walkers will pay a rent of €538 per sq.m (€50/sq.ft) under a long-term lease agreement.
The firm has been based in Ireland since 2010. Its primary focus is to provide the cross-Border market with legal, taxation and listing services. The firm also advises international and domestic financial institutions, corporates and real estate developers on a range of Irish law and taxation matters.
The Exchange was developed by the Cosgrave Group in conjunction with the IPUT pension fund. The new office block fronts on to Mayor Street and is located beside George’s Dock Luas station.
Louise Doherty of Bannon acted for the tenant.
In its most recent sale, Ardstone settled on a profit of about €3 million for Block P2 in Eastpoint Business Park. This was sold to Avestus Capital Partners and Ares Management for €12.05 million.
Following its decision to offload its office portfolio and turn attention to the Dublin housing market, Ardstone has had a string of successes – and additional profits of more than €37 million – over the past two years. The company plans to deliver more than 3,000 new houses to the market over three to five years. Its first development is scheduled for Kinsealy next September.
Ardstone bought the Eastpoint office block in 2013 after it had been let to Virgin Media Ireland. The 4,613sq m (49,653sq ft) building has been under-rented for some time. The current rent roll of €647,276 reflects a rental level of €129/sq m (€12/sq ft) and €700 for each of the 71 car parking spaces.
A number of adjoining buildings in Block P2 are let at double that rent level, and many of the other car-parking spaces are also yielding €1,350 per annum.
Donal O’Neill, managing director of Ardstone, said the company was pleased to have made another exit from the office market, which had recovered very strongly over the past four years and has now entered a new phase dominated by core buyers.
Other office assets sold include the eight-storey Velasco office building at Clanwilliam Place, which was bought by Irish Life for €58 million; 2 Harbourmaster Place to German investor Real IS for €53.75 million; and €20.5 million from Credit Suisse for the newly refurbished office block at 100 Mount Street.
More recently, Ardstone sold a retail strip along Morrison Chambers, to Meyer Bergman at a significant profit.
Property investment group Hibernia Reit has acquired three office buildings close to Lower Mount Street in Dublin 2 for €51m.
International property investor London + Regional was seeking about €54m for Blocks 1,2 and 5 Clanwilliam Court, when they went on the market at the end of April.
The buildings, which were constructed in the 1970s, total 93,700 sq.ft arranged over five to six floors above a double basement with 220 underground car parking spaces.
The buildings occupy a prominent position on the corner of Mount Street Lower and Clanwilliam Place, a short walk from Merrion Square and Grand Canal Dock railway station.
According to Hibernia, the buildings are only partially let with a 76% occupancy rate with tenants that include the ESB, An Bord Bia and Hines Real Estate Ireland. The buildings are currently generating rent of €2.9m per annum, equivalent to an average of €34 per sq.ft, excluding parking.
The weighted average period to break and expiry is five years with all leases due to expire by the end of 2021.
Hibernia said the purchase price equates to a capital value of €544 per sq.ft for the office accommodation and a net initial yield of 5%.
“Once fully occupied and post-settlement of an outstanding rent review the contracted rent is expected to rise to over €4m per annum, equating to a yield on cost in excess of 7.5%” the group said.
Report by the Irish Times
Investment returns from Irish commercial property cooled off in the first quarter of 2016, according to new data from the IPD/SCSI Ireland Quarterly Property Index. Total returns from Irish investment property closed at 2.9% in Q1 2016, down from the 6% recorded in the final quarter of 2015. The twelve-month return for Irish commercial property of 23.5% to the end of March 2016 remains significantly higher than that of the UK which reached 11.7% according to the IPD UK Monthly Property Index.
Industrial property has now emerged as the strongest performing asset class with total returns of 5.6% and capital value growth of 3.6%, reflecting robust levels of rental growth in the sector. Industrial property in South West Dublin performed particularly well in Q1, with returns up 6.5%.
Retail property is now seeing sustained growth, with returns up 3.3% in Q1 driven by rental growth of 2.1%. Performance on Dublin’s two main high streets remains strong, with quarterly returns of 4.3% and 4.2% recorded for Grafton and Henry Street respectively as rental values continue to increase in line with a steadily improving consumer economy. Moreover, the data suggest that the recovery is now spreading beyond Dublin, with total returns from retail property in provincial locations also closing at 3.3% in Q1.
Following stellar growth over the past two years associated with a strongly improving economy and shortage of office space in prime locations, offices are now the weakest performing asset sector registering a return of 2.6% in Q1, down from 5.7% in the previous quarter. Office capital value growth moderated to 1.6% while rental value growth was 2% in Q1.
Muted returns in the first quarter could be a sign of uncertainties among Irish and overseas investors alike following an inconclusive general election result and the impending Brexit vote, the consequences of which on the Irish economy are unclear as yet. Stability will be crucial to maintaining confidence in the sector and ensuring the recovery continues to spread nationally.
Prime office and retail rents in Dublin are expected to rise by about 12% in 2016, while residential development land values in the capital are expected to rise by a similar amount according to a new commercial property survey by the Society of Chartered Surveyors Ireland.
Surveyors expect prime office rents in the rest of the country to increase by between 5% to 6% while retail rents are expected to increase by 7% to 8% in Munster and Leinster (excluding Dublin) but by 4.5% in Connacht.
The survey found that investment in the commercial property market reached approximately €3.7 billion in 2015. While this figure is below the record investment level of €4.5 billion achieved in 2014, it nevertheless represents an exceptionally buoyant year for Irish property investment, as all sectors of the market recorded marked increases in activity.
The 2015 property market has seen investment spread more broadly through the regions compared to 2014, when investment was largely focused on the Dublin Region.
Close to 500 Chartered Surveyors were surveyed for the SCSI annual report which was developed and published in conjunction with Future Analytics Consulting.
Office Sector
According to the report there was a 24.1% year on year increase in prime office rents in Dublin in 2015 which reflects the continued demand for city centre locations from new and existing investors, particularly from technology based companies. Positively, respondents also noted an increase in investment activity and a rise in the number of firms that located in suburban areas in 2015, enticed by lower rental prices and newly renovated facilities.
The Review found that prime office rents in the capital were priced at €561 per sq.m at the end of 2015 but are set to increase by a further 11.7% this year.
Regional locations also experienced an increase in office sector demand. Respondents reported a marked increase in activity and demand for office space in the regional cities as the economic recovery resulted in an increase in new company formations and expansions.
This trend is likely to continue in 2016 as respondents predict that prime office rents in Connacht/Ulster will increase by 5.2% and in Munster and Leinster (excluding Dublin) by 5.9% and 6.1% respectively.
Brian Meldon, SCSI Commercial Agency Professional Group Chair, said; “While some respondents are anticipating an increase in supply in 2017, no new office space has been delivered to the Dublin market for the last five years and as a result demand continues to surpass supply. As a result, there are ongoing concerns about Dublin’s ability to continue to attract service sector Foreign Direct Investment in the absence of appropriate office space.”
“Concerns have also been raised by respondents about the lack of housing for potential future employees, as well as access to high quality public transport which could act as barriers to investment in the office sector in the short term. These concerns should weigh heavily on the minds of Ireland’s political parties who will contest the upcoming general election on the back of their plans for further job creation” he said.
Retail
In the retail sector, retail rents in Dublin’s Grafton Street grew by approximately 17.9% in 2015. Rents increased by 16.8% for prime rental in Dublin as Zone A prices reached €5,247 per sq.m. Respondents to the survey expect prime retail rents in Dublin to increase by 11.5% in 2016. In Connacht/Ulster, they are expected to increase by around 4.5% and in Munster and Leinster by approximately 8.0% and 7.2% respectively.
Brian Meldon said rental value growth within the retail sector had increased progressively throughout the course of 2015.“This reflects a strengthening domestic economic recovery and improving consumer sentiment. However, demand in town centres, suburban areas and neighbourhood shopping centres remains subdued and higher vacancy rates will likely remain a challenge within these areas in 2016, despite the positive forecasts for rental value growth”
Development Land
Development land values continued to increase in 2015. Most notably, residential development land increased by 19.7% in Dublin, 16.7% in Munster, 15.1% in Leinster and 10.0% in Connacht/Ulster. SCSI members anticipate residential development land values in Dublin will increase by around 12.1% in 2016.
However, growth in the value of office development land in Dublin surpassed all other development land types in all regions, with a rise of 26.7% in 2015. This growth is set to continue in to 2016 with expected increases of 16%. Notably, Dublin is the only region in which growth in the value of office development land exceeds growth in the value of residential land.
Brian Meldon said the increasing demand for housing and office units has strongly contributed to a growth in development land activity.
“Development finance remains the biggest single issue in ensuring additional new residential and commercial units are built over the short-term. Many contractors are reportedly experiencing very limited access to finance, with lending of only 30% to 50% being offered by financial institutions; with high interest rates and other inputs adding further to development costs. Ensuring the availability of development finance for measured speculative development, as well as speeding up the planning system will address supply issues and create a more sustainable market.”
Industrial
The industrial sector also experienced positive growth, and while much of this was focused on the Dublin market, the Munster Region experienced the greatest levels of rental growth, albeit from a low base. In Dublin, prime industrial rents under 500 sq.m increased to €84 per sq.m, representing an increase of approximately 2% year-on-year, while secondary rents on properties over 500 sq.m increased by 34.1% to €55 per sq.m.
“Industrial rental values continued to strengthen in 2016. Demand was strong for logistic-type properties, as the logistics networks expanded to meet the growing online retail phenomenon. There is an undersupply of these large-scale, modern logistic-style units, and build costs for such units remains high, undermining the financial viability of any speculative development” Meldon concluded.
Survey by SCSI
The Dublin Airport Authority (DAA) has had early success with its new business park beside the airport with the completion of legal contracts to lease the former Aer Lingus headquarters to ESB International (ESBI).
The new tenant is to move from offices on St Stephen’s Green to the former airline HQ which is undergoing a radical redevelopment at a cost of over €10 million. The 45-year-old block is to be given a grade-A specification, an A3 energy rating, a new triple-glazed façade, much improved insulation and a T50 broadband service throughout.
Rent saving
ESBI has agreed a rent of about €297 per sq.m (€27.60 per sq.ft) for the gross area of 7,524 sq.m (81,000 sq.ft) – probably a significant saving on the rent it is paying Irish Life for about 7,432 sq.m (80,000 sq.ft) in Stephen’s Court beside the former Anglo Irish bank HQ on St Stephen’s Green.
Irish Life is expected to upgrade the block and put it back on the market at an even higher rent given its prime location and the shortage of high volume space in the south inner city. ESBI rents the St Stephen’s Green offices on several leases close to running out. The six-storey-over-basement block at the airport is expected to be ready for fit-out early in the new year. The long-term lease includes break options in years five and 10.
Lucy Connolly of the Bannon agency handled the letting along with BNP Paribas Real Estate. Michael Healy of Savills advised the new tenant.
ESBI is a leading global engineering consultancy specialising in energy-related projects. It employs more than 700 staff across operations in Europe, the Middle East and Asia.
DAA originally set a long time frame of 25-30 years for its 70-acre business park but, after the earlier-than-expected success with the old Aer Lingus building and a favourable response to the marketing campaign highlighting its strategic location, insiders believe that it is only a matter of time before it unveils its plans for the next phase of four blocks with an overall floor area of 37,160 sq.m (400,000 sq.ft).
The airport business campus has considerable advantages over most parks in the Dublin area because of its superb road system and the fact it is serviced by no fewer than 1,500 local and national bus and coach movements on a daily basis.
The park is set to benefit from the airport’s direct links with Europe – there are about 108 daily flights to and from London alone – as well as America and the Middle East.
The ambitious plans by the DAA to broaden its revenue base through the development of a top-of-the-range business park comes after Manchester and Schipol (Amsterdam) airports also signalled their intention to open up their campuses to commercial property tenants wanting to avail of the wide range of support services.
Article in the Irish Times
An Bord Pleanala has granted permission for the development, subject to 19 conditions, which includes carrying out a survey of the controversial Block A, built by architect Sam Stephenson in the 1960s, and which involved the demolition of 16 Georgian Buildings on what was known as the ‘Georgian Mile’.
The development site includes various buildings dating from the 1940s to the 1980s, ranging in height from four to seven storeys, including 11 protected structures.
All of the 20th century buildings will be demolished, with nine protected Georgian houses to be refurbished.
The new building will be almost 50,000 square metres, including 36,917 square metres of office space. Some 440 bicycles will be accommodated, along with 110 car parking spaces.
In addition, apartments will be developed along with private and public open spaces in the form of terraces, balconies and garden areas.
The board said that the Sam Stephenson building should be subject to a detailed survey and added to the records of the Irish Architectural Archives, despite not being a protected structure.
The development is on a 1.2 hectare site which comprises most of a city block, bounded by Fitzwilliam Street Lower to the west, Mount Street Upper to the north, James’s Street East to the east and Baggot Street Lower to the south.
In its decision, the board said that “notwithstanding the high architectural quality” and “historic significance of the Stephenson building, it was not listed.
“The Board further had regard to the location of the proposal on the “Georgian Mile”, the most important Georgian vista in Dublin and considered that this diminished the case for the retention of Block A,” it said.
“Having regard to the submissions on file and to the difficulties presented in operational terms by the complex of buildings on site, and having further regard to the nature of the proposed replacement buildings, the Board accepted the case for demolition of the buildings on the site including the demolition of Block A.”
“The Board is satisfied that the proposed development would protect and improve the existing architectural and civic design character of this important part of Georgian Dublin.”
Article By www.independent.ie
Previous Article bannon.ie/news/esb-fitzwilliam-project
The first of the fast-track developments planned for Dublin’s docklands has been given the go ahead by the city council.
The planning permission for the site on Sir John Rogerson’s Quay will involve 58 apartments and 9,000 sq.m of office space.
As long as planning applications meet criteria set out in the SDZ plan, they can be expected to be granted permission and it cuts the length of the planning process from three years to 18 months.
Other planned redevelopments include the Boland Mills site for which the council has requested some changes.
The city council is planning two new bridges in the docklands and a programme of investment in streets and public spaces.
Reported by RTE News
Dublin Airport Authority (DAA) is to spend an estimated €10 million on the redevelopment of the former Aer Lingus head office at the airport. It is part of the first phase of a planned 70-acre business park aimed at international high-tech companies involved in research and development as well as other service industries.
Work is to start later this month on the regeneration of the 45-year-old block which is to get a Grade A specification, a LEED gold certification and an A3 energy rating before it is ready for fit-out by the end of the year.
The six-storey over basement building with a floor area of 8,300 sq.m (89,400 sq.ft) will in future be known as One, Dublin Airport Central. PJ Walls has been appointed as design and build contractors, while Henry J Lyons are acting as architect and design consultants.
Letting agents Bannon and BNP Paribas Real Estate are reporting “significant interest” in the block even before the formal launch, saying that it would appeal particularly to large multi-national corporations looking for a European or EMEA headquarters. The layout of the building will allow it to be leased to a single tenant or on a multi-let basis because of plans to provide a dual access reception area.
The regeneration process will include a new triple-glazed façade, improved insulation, flexible layout and the installation of T50 broadband throughout. About 60 jobs will be created during the construction phase and an estimated 700 people will be based there when the offices are fully let.
The airport site has 1,500 local and national bus and coach movements on a daily basis. It also has a sophisticated information technology infrastructure, round the clock security, a wide range of restaurants and bars, a fitness centre and a large number of sports facilities.
Reported in The Irish Times
Starwood Property Trust has acquired a portfolio of stabilised offices in Dublin from Lone Star for €350m, in the firm’s first equity investment in Ireland and also the first by a major US REIT in Dublin. The office portfolio sale reflects a net initial yield of circa 5.6% and is indicative of the emerging flight of capital by US REITs into Europe, following NorthStar Realty Finance Corp’s €1.1bn acquisition of the 11-strong SEB portfolio in January.
Lone Star’s original strategy was a €400m refinancing of the Dublin portfolio, including Project Holly assets as well as single properties acquired from RBS, NAMA and Ulster Bank, including 75 St Stephen’s Green. However, Lone Star’s sale to Starwood’s mortgage REIT did not include 75 St Stephen’s Green, acquired through an RBS loan in December 2013 for €79m, which is now expected to be separately sold.
Also excluded from the original Project Holly portfolio was CityNorth, a 100-acre mixed-use commercial development, comprised of office blocks and CityNorth Hotel, the four-star 128-bed hotel in Gormanston.
The assets acquired by Starwood Property Trust include:
London-based SW3 Capital has added two more Dublin office investments to its portfolio. It has bought Dublin Business School (DBS) on Aungier Street, South Great George’s Street, for €10 million and another office investment, J5 Plaza at North Park on the North Road in Dublin 11, for €5.6 million.
SW3 will get an initial return of 8.6% on the J5 Plaza office building which extends to 5,834 sq.m (62,796 sq.ft). The selling price will reflect a capital value of €1,184 per sq.m (€110 per sq.ft). The HSE contributes more than three-quarters of the rent which is €520,000 per annum. The other tenants include the Special Olympics, engineering consultants Fehily Timoney and Kavanagh Accountants.
David Carroll, of Bannon handled the negotiations for the vendor.
Ardstone Capital, the private investment manager, and CBRE Global Investment Partners, have bought 2 Harbourmaster Place for €37.85 million in a deal that will show a net initial yield of 5.4%.
The 5,688 sq.m (61,012 sq.ft) multi-let building close to the main entrance of the IFSC and Connolly Station has a mix of tenants in the block including KPMG, Wells Fargo, Bank of Montreal, Kleinworth Benson, Aspen Reinsurance and United Health Group.
Ardstone was advised by the Bannon agency while JLL acted for Irish Life.
2 Harbourmaster Place is the seventh office investment in the area to have changed hands this year as long-term investors availed of the pick-up in the market to offload assets on which they claimed 100 per cent capital allowances over a 10-year period.
The Central Bank is expected to submit a planning application for its new headquarters which will be built on the Dublin Docklands site once earmarked as a head office for the former Anglo Irish Bank, which will cost an estimated €140 million, reports the Irish Times.
The application seeks approval for an eight-storey office block. The 30,000 sq.m building can house approximately 1,400 staff and will contain a range of open floor office areas and meeting rooms. Its energy rating of A2 will make it one of the most power-efficient buildings in the country.
If it gets the go-ahead, the building will create 350 jobs during the construction phase until its target completion date in 2016.
Google is understood to be in discussions to buy the historic Boland’s Mills site in Dublin’s Docklands.
The landmark building, which was at the centre of fighting during the 1916 Easter Rising, is controlled by Nama. The Boland’s Mill site was bought by developer Sean Kelly for €42m during the boom, with plans to build apartments, offices and retail unit on the 1.7-acre site. Treasury Holdings owned adjacent sites to the mills.
So far Google has spent around €1bn in Ireland over the last decade between buildings and staffing costs.
The National Asset Management Agency (NAMA) has announced that it will bring five Irish property portfolios, with a combined value of approximately €600m, to the market in Q4 2014. The portfolios will comprise offices, shopping centres, hotels and apartments. This announcement is in line with NAMA’s publicly stated intention to bring property portfolio sales with a minimum value of €250m to the market each quarter.
The portfolios for sale will consist of:
The social media giant, Facebook is doubling the size of its European headquarters in the Dublin Docklands with an adjoining office to take its total space up to 250,000 sq.ft. The deal includes the standard landlord fit-out including ceilings, floors, light fittings and air conditioning.
It is reported that the lease which will be for 25 years will see Facebook pay the new standard city centre rent of approximately €45 per sq.ft, but the deal does include the option to break the lease after a period of 13 years. Facebook is understood to have negotiated a rent of no more than €376 per sq.m (€35 per sq.ft) for its first block at 4 Grand Canal Square at the end of 2011.
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
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.
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.
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.
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.
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.
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:
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.
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.
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
A Summary of the Commercial Property Review & Outlook 2014 published by the Society of Chartered Surveyors Ireland (SCSI).
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.
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.
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.
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.
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
DUBLIN City Council (DCC) has requested an extension of the proposed Living City tax relief initiative to include offices in its submission to the Minister for Finance.
All six city councils including Cork, Limerick, Kilkenny, Galway and Waterford have submitted proposals which include the areas of their inner cities where pre-1915 buildings could qualify for the tax reliefs.
DCC proposes to confine the scheme to four areas of the city between the canals. Some might argue that the prices for properties in Merrion and Fitzwilliam Squares, which have sold for up to €2m in recent times, suggest that these squares don’t need tax incentives. Nevertheless DCC points out that older office properties in the area have recently been losing occupiers to modern offices in areas such as the Docklands.
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.”
New to the market is Block 9 Blackrock Business Park, Blackrock, Co. Dublin – For Sale or To Let
(On the instructions of Brendan O’ Donoghue, Russell Brennan Keane (Receiver).
Two storey building extending to 438 sq m. (4,715 sq ft.) with potential for each floor to be self-contained with separate access. Block 9 also features high quality specification with air conditioning and 9 surface car parking spaces included with the property. Current occupiers in the park include; Tektronix Communications, CIT, An Post, Skill Pages and HRBR.
Please view our online brochure: Block 9 Blackrock Business Park, Blackrock, Co. Dublin
For further information please contact Louise Doherty or Katie Williams on 01 6477900
Bannon, on the instructions of the local Quinn family, are bringing to the market a modern mixed-use investment opportunity situated in the heart of Sligo with an asking price of €3.7m.
Known as Castlewood House, the opportunity comprises a modern commercial and residential development which was completed in 2010 and finished to an exceptionally high standard. The property was developed by local businessman Kevin Quinn and family.
The development has dual frontage onto both Rockwood Parade, along the Garrivogue River, and Castle Street.
The sale includes a large department store fronting Castle Street which is occupied by Heatons, together with three floors of self-contained office accommodation, 16 apartments and car parking.
Heatons occupy the 2,341 sq m department store on a 25 year lease from 2010 with over 22 years unexpired term certain. The current rent of €200,000 per annum (set in 2010) will be subject to a fixed uplift in 2015 to €250,000 with market reviews five yearly thereafter. The office accommodation is accessed via a separate access and lobby from Castle Street.
The residential element in its entirety includes 21 apartments, 16 of which are the subject to this sale (9 x 1 beds and 7 x 2 beds). 15 of these 16 apartments are currently occupied and producing a gross income in the region of €120,000 per annum. Each apartment is fitted to a high standard with modern fixtures and fittings throughout. The apartments, many of which have river views, are developed within two blocks and benefit from a landscaped courtyard area. These apartments are amongst the highest quality outside of the capital.
A basement car park with over 50 spaces provides parking for the residential and office elements and also forms part of the sale.
David Carroll of Bannon, who will be handling the sale, comments ‘we expect there to be considerable interest in the opportunity given the secure long term nature of the Heaton’s income and the opportunity to acquire a portfolio of residential units with a proven high occupancy record in the heart of Sligo’. The property will be sold in three lots with Lot One comprising the commercial element and car park, Lot Two the residential element and Lot 3 the entire.
Irish Life is delighted to welcome ‘Great Place to Work’ to Hambleden House, on Lower Pembroke Street, Dublin 2. ‘Great Place to Work’ (GPW) was established in Ireland in 2002 and works with many of the most successful and innovative businesses around the world to create, study, and recognise great workplaces. In recent years, the company has enjoyed continued success and have decided to relocate from Swords to the centre of Dublin’s Business District. Bannon has reportedly leased 147 sq m to PW on a 10 year lease (with a break at the end of year 6) at a headline rent of €323 per sq m.
Now the only remaining space within the building comprises 593 sq m (6,383 sq ft) on the lower ground floor. The recently refurbished floor offers open plan accommodation with maximum flexibility to accommodate tenant’s requirements. The floor benefits from full air conditioning and excellent light penetration as well access to a private landscaped courtyard.
Katie Williams of Bannon commented that this is ‘a perfect opportunity to acquire 3rd generation offices with a 21st century interior finish in the heart of historic Georgian Dublin’. The offices are available to let on a flexible lease terms through sole agents Bannon.
(Link to Irish Times Article, Feb 13 2013)
Bannon have been instructed to market the largest portion of a portfolio of former Bank branches which are due to come to the market in the coming weeks.
James Quinlan of Bannon has confirmed that he has been instructed to dispose of 13 of the former bank branches which closed in October last year.
Indications are that there is strong local interest for the former branches which are located in counties Clare, Limerick, Tipperary, Wexford and Waterford. Quinlan suggests that there is also likely to be strong interest for the former branch on William Street, Limerick with a significant volume of enquiries received already. Guide prices are likely to range between €75,000 and €200,000 for the branches in the provincial locations.
The majority of the former branches have a residential element which may suit owner occupiers looking for quality residential opportunities similar to that pictured in the popular seaside resort of Kilkee.
Bannon has been appointed by Dublin City Council to let the Park Building in Rathmines. The building has an area of 543 sq m and is suitable for crèche, educational or office use.
The property details can be viewed at brochures.bannon.ie/rathmines-park-building-dublin-6
Rent reduction discussions are commonplace in the current Irish Property market particularly in the retail area but they need to be seen for what they are; A Re-negotiation of Existing Lease Terms.
If you are in the business of re-negotiating lease terms then why stop at the rent? It is important that landlord’s asset managers and their funders are live to the opportunity to exchange potentially lucrative improvements in their overall lease profile for any rental concessions made to a tenant. We have set out some examples in our guide:
Rent Reduction Negotiations – A Guide for Landlords (PDF)
(Link to Irish Times Article, June 13 2012)
‘The AIB Trade Centre, a distinctive office investment near the front of Dublin’s IFSC, is to be offered for sale through Bannon’s investment department with a guide price of €7.8 million.
The three-storey over basement building at Custom House Quay, also known as Stack B, will give investors an immediate return of 9 per cent after costs are deducted.
The riverside block extends to 1,734sq m (18,665sq ft) and is let to AIB on a lease which has almost nine years to run. The lease agreement provides for an upwards-only rent review in 2016 on the current passing rent of €735,000 per annum.’
| Title | Price | Status | Type | Area | Purpose | Bedrooms | Bathrooms |
|---|
