The first CBRE | Bi-Monthly Research Report of 2013 - a report that focuses on current trends and transactions across all sectors of the Irish Commercial property market - includes news of an encouraging volume of activity in all sectors of the market since the beginning of the year with:
- a steady volume of activity in all of the occupier markets
- very strong demand from investors for prime Irish real estate
- yields for prime properties now showing signs of improvement
- prime headline office rents starting to grow as competition for the best office buildings increases
- increased disposals by way of asset and loan
THE OFFICE MARKET
2013 has started well in the office occupier market with a steady volume of office letting activity concluded during January and February and a number of notable transactions being negotiated at present.
The year started with news that Irish investor Larry Goodman had emerged as the successful purchaser of the former Bank of Ireland office building on Baggot Street for a strong price of €43 million.
Lettings agreed since the beginning of 2013 include the letting of additional 2,300m2 at The Harcourt Building in Dublin 2 to Investec; the letting of approximately 1,900m2 at Classon House in Dundrum to Cartrawler; the letting of approximately 1,394m2 at Guild House, Dublin 1 to Axa; the letting of approximately 1,115m2 to Bloomberg (Polar Lake) at The Harcourt Building, Dublin 2; the letting of 836m2 to Samsung at The Grange and the letting of 789m2 in Park Place on Hatch Street, Dublin 2 to Pepper Home Loans.
Terms have also reportedly been agreed on 4,645m2 at No. 1 Central Park in south Dublin to Salesforce. In addition to healthy volumes of leasing activity, a number of occupiers continue to weigh up the merits of purchasing office buildings as demonstrated by the recent sale of two office blocks in Park West.
A number of Georgian office buildings have also recently sold, some of which are being purchased for conversion to full residential use but some of which will remain in office use. Although corporate occupiers remain cautious about making significant location decisions, there is an encouraging volume of prevailing demand for Dublin offices.
Twitter who are currently in serviced offices in Dublin have been looking for approximately 2,787m2 of accommodation and are reportedly moving into office accommodation at The Academy building on Pearse Street in Dublin 2. A number of occupiers that are currently in serviced accommodation are focussed on securing more permanent accommodation. Meanwhile, Facebook are to recruit an additional 100 staff at their premises in Dublin Docklands. Microsoft, who has been in the market with a 37,160m2 requirement for some time, has reportedly now identified a site for its new headquarters campus at South County Business Park in Sandyford, subject to planning permission.
Outside of Dublin, the recent announcement that eBay will create 450 new jobs in Dundalk, Co. Louth is welcome. Meanwhile, Hewlett Packard has recently lodged planning for a new 8,361m2 facility in Galway. Although we do not expect to witness significant rental growth in any sector of the Irish market in 2013, there is potential for headline office rents to increase somewhat. Indeed, we have recently increased our prime city centre headline rent series for the first time in six years to €306.66 per square metre or €28.50 per square foot and expect we will be revising this upwards again over the coming months as competition for the best office buildings increases.
THE RETAIL MARKET
Following what proved to be a relatively good Christmas trading period for retailers in many sectors of the Irish market, the first two months of 2013 have been dominated by negative news flow.
An interim examiner was appointed to a chain of Dublin city centre convenience stores; B&Q’s Irish stores went into examinership with speculation that two of their eleven Irish stores will ultimately close; The Ashleaf Shopping Centre in Crumlin in Dublin 12 went into receivership; men’s formalwear retailer Blacktie went into administration; an examiner was appointed to 12 Pamela Scott stores and 16 HMV stores around the country closed resulting in a large number of job losses.
Despite this, there has been a notable improvement in demand in the retail property market over recent months and a number of transactions have been completed or are currently in active negotiations. NAMA have announced that they are to fund the amalgamation of two adjoining retail units on 57/58 Grafton Street creating 743m2 of accommodation for which there is likely to be considerable demand from both new and existing retailers.
Indeed, there has been strong demand from retailers for the vacant stores at 117 and 118 Grafton Street, which are currently on the market, guiding €3.8 million.
Benefit Cosmetics have recently signed a letting on a new store on South William Street in Dublin city centre. Following the recent resolution of the Dunnes Stores litigation at the Point Village in Dublin Docklands, there is now new momentum from a range of restaurant users encouraged by increasing success of the Odeon cinema which opened last year.
Milano are to open a new restaurant adjacent to the recently opened Nando’s at Blanchardstown Town Centre; Kilkenny Design have opened a new store at Douglas Shopping Centre in Cork; Choice have opened a new store at Shop Street in Galway; UK multiple Bank fashion recently opened a store at Liffey Valley shopping centre in West Dublin; UK furniture chain DFS have opened a new store in Citygate Park in Mahon, Co. Cork; TK Maxx are to open a new 3,251m2 store in Dublin’s ILAC centre; discount retailer Eurogiant are to open a new store at Parnell Street in Dublin 1; Tesco are to
open a new store at Maypark on Dublin’s Malahide Road; Aldi are to open a new store in Mulhuddart in Dublin 15; Nike have opened a new store at West End Retail Park in Blanchardstown, Dublin 15 and Gap are to open a new store in this park later this month.
Despite disappointing car sales over recent months, there has ironically been good demand for motor showroom facilities that have come to the market over recent months. The former Appleyard Motors facility in Stillorgan Industrial Park in south Dublin recently sold to Spirit Motor Group for close to €1.5 million and the former Legrande Garage in Stillorgan, Dublin 18 sold to Merrion Fleet for approximately €1.2 million. Meanwhile, the former Winfield Motor showrooms in Sandymount, Dublin 4 was recently let to Michael Grant Renault dealership; a deal has recently been agreed at the former Renault car showroom at Airside in North Dublin and there has been good demand for the former Renault car showrooms at Liffey Valley in West Dublin.
Although conditions in the retail sector remain difficult and many retailers continue to struggle with rent and rates obligations, there is an evident improvement in activity in the retail property sector with several bidders on many of the well-located properties that are being brought to market at present. The effect of polarisation is very evident in the retail sector with a scarcity of suitable stores in some locations to suit occupier’s specific requirements and significant oversupply in other locations around the country where demand is considerably thinner.
Following what proved to be a relatively good Christmas trading period for retailers in many sectors of the Irish market, the first two months of 2013 have been dominated by negative news flow.
An interim examiner was appointed to a chain of Dublin city centre convenience stores; B&Q’s Irish stores went into examinership with speculation that two of their eleven Irish stores will ultimately close; The Ashleaf Shopping Centre in Crumlin in Dublin 12 went into receivership; men’s formalwear retailer Blacktie went into administration; an examiner was appointed to 12 Pamela Scott stores and 16 HMV stores around the country closed resulting in a large number of job losses.
Despite this, there has been a notable improvement in demand in the retail property market over recent months and a number of transactions have been completed or are currently in active negotiations. NAMA have announced that they are to fund the amalgamation of two adjoining retail units on 57/58 Grafton Street creating 743m2 of accommodation for which there is likely to be considerable demand from both new and existing retailers.
Indeed, there has been strong demand from retailers for the vacant stores at 117 and 118 Grafton Street, which are currently on the market, guiding €3.8 million.
Benefit Cosmetics have recently signed a letting on a new store on South William Street in Dublin city centre. Following the recent resolution of the Dunnes Stores litigation at the Point Village in Dublin Docklands, there is now new momentum from a range of restaurant users encouraged by increasing success of the Odeon cinema which opened last year.
Milano are to open a new restaurant adjacent to the recently opened Nando’s at Blanchardstown Town Centre; Kilkenny Design have opened a new store at Douglas Shopping Centre in Cork; Choice have opened a new store at Shop Street in Galway; UK multiple Bank fashion recently opened a store at Liffey Valley shopping centre in West Dublin; UK furniture chain DFS have opened a new store in Citygate Park in Mahon, Co. Cork; TK Maxx are to open a new 3,251m2 store in Dublin’s ILAC centre; discount retailer Eurogiant are to open a new store at Parnell Street in Dublin 1; Tesco are to
open a new store at Maypark on Dublin’s Malahide Road; Aldi are to open a new store in Mulhuddart in Dublin 15; Nike have opened a new store at West End Retail Park in Blanchardstown, Dublin 15 and Gap are to open a new store in this park later this month.
Despite disappointing car sales over recent months, there has ironically been good demand for motor showroom facilities that have come to the market over recent months. The former Appleyard Motors facility in Stillorgan Industrial Park in south Dublin recently sold to Spirit Motor Group for close to €1.5 million and the former Legrande Garage in Stillorgan, Dublin 18 sold to Merrion Fleet for approximately €1.2 million. Meanwhile, the former Winfield Motor showrooms in Sandymount, Dublin 4 was recently let to Michael Grant Renault dealership; a deal has recently been agreed at the former Renault car showroom at Airside in North Dublin and there has been good demand for the former Renault car showrooms at Liffey Valley in West Dublin.
Although conditions in the retail sector remain difficult and many retailers continue to struggle with rent and rates obligations, there is an evident improvement in activity in the retail property sector with several bidders on many of the well-located properties that are being brought to market at present. The effect of polarisation is very evident in the retail sector with a scarcity of suitable stores in some locations to suit occupier’s specific requirements and significant oversupply in other locations around the country where demand is considerably thinner.
THE INDUSTRIAL MARKET
There has been a steady volume of activity in the industrial sector since the beginning of the year. A number of transactions have been agreed or are in legals although in some instances it is taking several months for transactions to sign and complete.
Much of the industrial leasing activity being completed at present comprises relatively small lot sizes although there are a number of larger requirements outstanding and there is an emerging scarcity of quality modern logistics stock larger than 4,645m2, along certain corridors.
Prime headline industrial rents are now stable at approximately €60 per m2 although rents on secondary and provincial properties remain under downward pressure. A number of corporate occupiers are focussing on purchasing buildings as opposed to leasing them.
Recent sales transactions agreed include the sale of the 4,181m2 former Mitsubishi headquarters building at Westgate Business Park in Dublin 12; the sale of a 1,672m2 facility at Northwest Business Park in Dublin 15 and the sale of a 2,323m2 showroom at Airside Motor Park in north Dublin.
Recent lettings agreed include the letting of 743m2 at Unit 10, Northern Cross Business Park in Dublin 1 and the sub-letting of 418m2 at North Ring Business Park in Santry, Dublin 9. In another recent transaction, South Dublin County Council has agreed to lease 11 hectares at Grange Castle Business Park to a Spanish pharmaceutical company for more than €6 million.
There have been some sales of industrial facilities around the country completed recently although outside of Dublin, demand for such facilities is obviously thinner and this is reflected in the prices achieved for these facilities.
Recent sales include the sale to an Irish company of a 15,965m2 facility in Tipperary Town for approximately €1 million and the sale of the 3,871m2 former Talk Talk call centre in Waterford for a reported €500,000 to a manufacturing company.
There has been a steady volume of activity in the industrial sector since the beginning of the year. A number of transactions have been agreed or are in legals although in some instances it is taking several months for transactions to sign and complete.
Much of the industrial leasing activity being completed at present comprises relatively small lot sizes although there are a number of larger requirements outstanding and there is an emerging scarcity of quality modern logistics stock larger than 4,645m2, along certain corridors.
Prime headline industrial rents are now stable at approximately €60 per m2 although rents on secondary and provincial properties remain under downward pressure. A number of corporate occupiers are focussing on purchasing buildings as opposed to leasing them.
Recent sales transactions agreed include the sale of the 4,181m2 former Mitsubishi headquarters building at Westgate Business Park in Dublin 12; the sale of a 1,672m2 facility at Northwest Business Park in Dublin 15 and the sale of a 2,323m2 showroom at Airside Motor Park in north Dublin.
Recent lettings agreed include the letting of 743m2 at Unit 10, Northern Cross Business Park in Dublin 1 and the sub-letting of 418m2 at North Ring Business Park in Santry, Dublin 9. In another recent transaction, South Dublin County Council has agreed to lease 11 hectares at Grange Castle Business Park to a Spanish pharmaceutical company for more than €6 million.
There have been some sales of industrial facilities around the country completed recently although outside of Dublin, demand for such facilities is obviously thinner and this is reflected in the prices achieved for these facilities.
Recent sales include the sale to an Irish company of a 15,965m2 facility in Tipperary Town for approximately €1 million and the sale of the 3,871m2 former Talk Talk call centre in Waterford for a reported €500,000 to a manufacturing company.
THE IRISH INVESTMENT MARKET
Following a surge in investment activity in the final quarter of last year, the first two months of 2013 have been less frantic in terms of transactional activity. Much of the focus in the Irish investment market in the first two months of this year has been on preparing assets for sale and completing the sale of assets that were brought to the market late last year, with very little new product having been released for sale during January and February.
Notable transactions completed since Christmas include the sale of the Bishop’s Square office building in Dublin 2 to US investor King Street for €65 million, reflecting an initial yield of 9.8%; the sale to German fund GLL of two adjoining buildings on Grafton Street for a reported €40 million, reflecting an initial yield of 6.9%; the sale of St. Martin’s House in Baggot Street, Dublin 2 to German investors for a reported €22.5 million, reflecting a yield of 13.26%; the sale to an overseas investor of the SAP office building in Citywest for €14 million, reflecting an initial yield of 11.2%; the sale of an office building on Burlington Road, Dublin 4 for €13.1 million, reflecting an initial yield of 7.25%; the sale of a 62 apartment development off the North Circular Road in Dublin 7 for €9.6 million to an Israeli investor and the off-market sale of a property on Grafton Street.
A deal has also reportedly been agreed in recent weeks on the River Lee Hotel investment in Cork. In addition to these larger transactions, for which the purchasers are predominantly overseas investors, a number of smaller investment properties are also selling in the current market. Recent transactions include the sale of a secondary industrial facility in Ballycoolin, Dublin 15 for approximately €1.5 million; a block of 18 apartments at Rathgar Road, Dublin 6 for €2.4 million; the sale of a terrace of 14 townhouses in Galway by NAMA for approximately €1.4 million; the sale of a Tesco Express store on Upper Rathmines Road, Dublin 6 for €900,000; the sale of a Bank of Ireland branch at The Diamond, Donegal Town for €900,000; the sale of 19 William Street in Galway to a US investor for €715,000 and the sale of Brick Alley Café in Temple Bar in Dublin city centre for €470,000.
Irish investors sold over €2.4 billion of property investments in the UK in 2012 in 62 transactions and we continue to see Irish owned assets in the UK being offered for sale. Recent sales by Irish investors include the sale of the Woolgate Exchange office building in the City of London for £265 million and the sale of 1 Victoria Street in London for £180 million.
In a notable move, Irish REIT legislation was introduced in the Finance Bill in recent weeks, facilitating the establishment of an Irish REIT in due course. The framework is quite similar to the UK REIT model with a stipulation that 75% of the income must come from rent and 85% of this income must be redistributed to investors.
Much of the focus in recent weeks has been on loan portfolios, fuelled to some extent by NAMA’s decision to bring two Irish loan portfolios to the market and the likliehood of other loan portfolios coming to the market following the liquidation of the Irish Banking Resolution Corporation (IBRC) last month.
While there is undoubtedly very strong demand for Irish loan portfolios, there is a cohort of investors, particularly institutional investors, who have a preference for direct investment and will continue to focus their attention on purchasing prime property assets as they are released to the market.
There is likely to be very strong interest in the Harcourt Building in Dublin 2, which has just been released for sale guiding €28 million. Some international investors are now moving up the risk curve in order to secure product. The weight of money chasing prime investment opportunities in the Irish market is impacting postively on yields to the extent that we have adjusted our CBRE prime yield series this month by 25 basis points for prime offices, prime retail high street and prime shopping centres and upgraded our short-term outlook for yields in several sectors.
Following a surge in investment activity in the final quarter of last year, the first two months of 2013 have been less frantic in terms of transactional activity. Much of the focus in the Irish investment market in the first two months of this year has been on preparing assets for sale and completing the sale of assets that were brought to the market late last year, with very little new product having been released for sale during January and February.
Notable transactions completed since Christmas include the sale of the Bishop’s Square office building in Dublin 2 to US investor King Street for €65 million, reflecting an initial yield of 9.8%; the sale to German fund GLL of two adjoining buildings on Grafton Street for a reported €40 million, reflecting an initial yield of 6.9%; the sale of St. Martin’s House in Baggot Street, Dublin 2 to German investors for a reported €22.5 million, reflecting a yield of 13.26%; the sale to an overseas investor of the SAP office building in Citywest for €14 million, reflecting an initial yield of 11.2%; the sale of an office building on Burlington Road, Dublin 4 for €13.1 million, reflecting an initial yield of 7.25%; the sale of a 62 apartment development off the North Circular Road in Dublin 7 for €9.6 million to an Israeli investor and the off-market sale of a property on Grafton Street.
A deal has also reportedly been agreed in recent weeks on the River Lee Hotel investment in Cork. In addition to these larger transactions, for which the purchasers are predominantly overseas investors, a number of smaller investment properties are also selling in the current market. Recent transactions include the sale of a secondary industrial facility in Ballycoolin, Dublin 15 for approximately €1.5 million; a block of 18 apartments at Rathgar Road, Dublin 6 for €2.4 million; the sale of a terrace of 14 townhouses in Galway by NAMA for approximately €1.4 million; the sale of a Tesco Express store on Upper Rathmines Road, Dublin 6 for €900,000; the sale of a Bank of Ireland branch at The Diamond, Donegal Town for €900,000; the sale of 19 William Street in Galway to a US investor for €715,000 and the sale of Brick Alley Café in Temple Bar in Dublin city centre for €470,000.
Irish investors sold over €2.4 billion of property investments in the UK in 2012 in 62 transactions and we continue to see Irish owned assets in the UK being offered for sale. Recent sales by Irish investors include the sale of the Woolgate Exchange office building in the City of London for £265 million and the sale of 1 Victoria Street in London for £180 million.
In a notable move, Irish REIT legislation was introduced in the Finance Bill in recent weeks, facilitating the establishment of an Irish REIT in due course. The framework is quite similar to the UK REIT model with a stipulation that 75% of the income must come from rent and 85% of this income must be redistributed to investors.
Much of the focus in recent weeks has been on loan portfolios, fuelled to some extent by NAMA’s decision to bring two Irish loan portfolios to the market and the likliehood of other loan portfolios coming to the market following the liquidation of the Irish Banking Resolution Corporation (IBRC) last month.
While there is undoubtedly very strong demand for Irish loan portfolios, there is a cohort of investors, particularly institutional investors, who have a preference for direct investment and will continue to focus their attention on purchasing prime property assets as they are released to the market.
There is likely to be very strong interest in the Harcourt Building in Dublin 2, which has just been released for sale guiding €28 million. Some international investors are now moving up the risk curve in order to secure product. The weight of money chasing prime investment opportunities in the Irish market is impacting postively on yields to the extent that we have adjusted our CBRE prime yield series this month by 25 basis points for prime offices, prime retail high street and prime shopping centres and upgraded our short-term outlook for yields in several sectors.
THE DEVELOPMENT LAND MARKET
Statistics released in recent weeks point to increases in the volume of new home starts in many local authority areas over the last 12 month period, albeit from a very low base. In the Dublin market, small new homes developments have commenced in locations including Carrickmines, Maynooth, Dun Laoghaire, Saggart, Rathgar and Knocklyon while a number of new planning applications for housing developments have been lodged.
On the back of this gradual improvement, there has been an increase in the volume of enquiries for development sites, with encouraging volumes of demand emanating for well-located strategic sites that are priced appropriately. The vast majority of development sites being sold at present comprise small infill sites, for which there is strong demand, predominantly from cash buyers.
Sales completed recently include the sale of Weston Airport in West Dublin for €3.5 million; the sale of a 0.8 acre site in Dublin 2, which had been quoting €2.35 million; the sale of a 0.79 acre site facing onto the LUAS red line on Benburb Street in Dublin 7 for a price in the order of €1 million; the sale of a 0.38 acre former Texaco petrol station site on the eastern side of Churchtown Road in Dublin 14 for approximately €600,000 and the sale of a 0.2 acre site at Newtownpark Avenue in Blackrock, Co. Dublin for approximately €550,000.
One of the largest transactions to complete recently was the sale of 486 acres at Milverton Demesne in Skerries in North County Dublin for a price believed to be in the order of €7.5 million. Outside of Dublin, Griffith College are believed to be paying €2 million for the former St Patrick’s Marymount hospice building on 5 acres in Cork City.
Development properties that have come to the market recently include the former Richmond Hospital on North Brunswick Street in Dublin 7, which is guiding €3.5 million; the 0.87 acre former Iceland site at Lower George’s Street in Dun Laoghaire, Co. Dublin, which is guiding €1.75 million; a 0.45 acre office site at Church Street, Dublin 7, which is guiding €1.5 million; a 5.58 acre development site in Athlone, Co. Westmeath, which is guiding €1.2 million; a church on X acres in Ringsend, Dublin 4, which is on the market guiding €500,000 and a 0.25 acre site in Harold’s Cross in Dublin 6W, which is guiding €350,000. Outside of Dublin, there is more limited demand for development opportunities.
According to recent statistics released by the Department of the Environment and Local Government, local authorities have dezoned up to 15,000 hectares of land around the country while building on a further 13,000 hectares has been banned until 2019. 33 of the country’s 34 local authorities have dezoned land over the last few years.
Despite the extent of dezoning that has occurred, the vast majority of provincial sites that are selling are trading at agricultural values. The sale of agricultural land continues at a brisk pace around the country, fuelled to a large extent by cash purchasers. There has been a notable increase in the volume of agricultural land sales being conducted by auction over the last few months.
Some of the more notable agricultural land sales completed recently include the sale of a 206 acre farm in Donegal at auction for €3.1 million or €15,000 per acre; the sale of Dowth Hall on 420 acres in Drogheda, Co. Louth for €5 million or €11,900 per acre; the sale of a 245 acre land parcel in Killaloe, Co. Clare for €3.5 million; the sale of 161 acres at Tobinstown, Tullow, Co. Carlow at auction for €1.87 million or €11,600 per acre and the sale of 37.2 acres at Bagnelstown, Co. Carlow for €14,000 per acre. We expect to see an increasing number of vendors bringing sites to the market over the coming months to capitalise on the current strength of demand for well-priced strategic sites in core locations, particularly in Dublin city centre.
Statistics released in recent weeks point to increases in the volume of new home starts in many local authority areas over the last 12 month period, albeit from a very low base. In the Dublin market, small new homes developments have commenced in locations including Carrickmines, Maynooth, Dun Laoghaire, Saggart, Rathgar and Knocklyon while a number of new planning applications for housing developments have been lodged.
On the back of this gradual improvement, there has been an increase in the volume of enquiries for development sites, with encouraging volumes of demand emanating for well-located strategic sites that are priced appropriately. The vast majority of development sites being sold at present comprise small infill sites, for which there is strong demand, predominantly from cash buyers.
Sales completed recently include the sale of Weston Airport in West Dublin for €3.5 million; the sale of a 0.8 acre site in Dublin 2, which had been quoting €2.35 million; the sale of a 0.79 acre site facing onto the LUAS red line on Benburb Street in Dublin 7 for a price in the order of €1 million; the sale of a 0.38 acre former Texaco petrol station site on the eastern side of Churchtown Road in Dublin 14 for approximately €600,000 and the sale of a 0.2 acre site at Newtownpark Avenue in Blackrock, Co. Dublin for approximately €550,000.
One of the largest transactions to complete recently was the sale of 486 acres at Milverton Demesne in Skerries in North County Dublin for a price believed to be in the order of €7.5 million. Outside of Dublin, Griffith College are believed to be paying €2 million for the former St Patrick’s Marymount hospice building on 5 acres in Cork City.
Development properties that have come to the market recently include the former Richmond Hospital on North Brunswick Street in Dublin 7, which is guiding €3.5 million; the 0.87 acre former Iceland site at Lower George’s Street in Dun Laoghaire, Co. Dublin, which is guiding €1.75 million; a 0.45 acre office site at Church Street, Dublin 7, which is guiding €1.5 million; a 5.58 acre development site in Athlone, Co. Westmeath, which is guiding €1.2 million; a church on X acres in Ringsend, Dublin 4, which is on the market guiding €500,000 and a 0.25 acre site in Harold’s Cross in Dublin 6W, which is guiding €350,000. Outside of Dublin, there is more limited demand for development opportunities.
According to recent statistics released by the Department of the Environment and Local Government, local authorities have dezoned up to 15,000 hectares of land around the country while building on a further 13,000 hectares has been banned until 2019. 33 of the country’s 34 local authorities have dezoned land over the last few years.
Despite the extent of dezoning that has occurred, the vast majority of provincial sites that are selling are trading at agricultural values. The sale of agricultural land continues at a brisk pace around the country, fuelled to a large extent by cash purchasers. There has been a notable increase in the volume of agricultural land sales being conducted by auction over the last few months.
Some of the more notable agricultural land sales completed recently include the sale of a 206 acre farm in Donegal at auction for €3.1 million or €15,000 per acre; the sale of Dowth Hall on 420 acres in Drogheda, Co. Louth for €5 million or €11,900 per acre; the sale of a 245 acre land parcel in Killaloe, Co. Clare for €3.5 million; the sale of 161 acres at Tobinstown, Tullow, Co. Carlow at auction for €1.87 million or €11,600 per acre and the sale of 37.2 acres at Bagnelstown, Co. Carlow for €14,000 per acre. We expect to see an increasing number of vendors bringing sites to the market over the coming months to capitalise on the current strength of demand for well-priced strategic sites in core locations, particularly in Dublin city centre.
THE HOTELS & LICENSED MARKET
Hotel transaction numbers were well up in 2012 with 24 properties sold in Ireland last year compared to only 8 transactions in 2011. These 24 sales accounted for a total spend of €146 million between them. This momentum has continued into 2013 with several hotel sales agreed during the first two months of the year and a number of transactions currently in negotiations or in legals.
Some of the more significant hotel transactions negotiated since the beginning of this year include the sale of the West County Hotel in Ennis, Co. Clare to the Treacy Hotel Group from Waterford for approximately €2 million and the sale of the 66 bed Sheen Falls Lodge in Kenmare, Co. Kerry to a UK-based group of private investors for €5 million.
In Dublin, a deal has been agreed on the former Ormond Hotel on Ormond Quay, while an established Dublin hotelier has leased the 120 bed Plaza Hotel in Tallaght, Dublin 24. Another notable transaction related to the hotel sector was the recent sale by Lloyds of loans associated with the Bewleys Moran Hotel Group, to the US hedge fund Canyon Capital Advisors, for a reported €42 million, reflecting an approximate 70% discount.
A deal is now nearing completion on the 32 bed Barry’s Hotel in Dublin 1, which was guiding €900,000 and generated considerable interest from a range of potential users since it was launched for sale earlier this year.
Discussions are believed to be on-going with various parties interested in purchasing the 5 star Ritz Carlton hotel in Wicklow, which recently went into liquidation after a 100 day examinership failed to save the business. The Morrison Hotel, which was purchased by a Russian investor during 2012, has now re-opened following an extensive €7m upgrade and is the first Irish hotel to trade under Hilton’s DoubleTree brand.
Next month will see the opening of the 52 bed Deane Hotel on Harcourt Street, Dublin 2 and 185 bedroom Marker Hotel in Dublin’s Docklands. As banks and NAMA continue to deleverage, we expect to see more hotel assets being offered for sale over the coming months with considerable international appetite likely to be focussed on any Dublin hotels that are brought to the market.
Following the sale of 12 Dublin pubs last year, there has been a noticeable increase in the volume of pubs going into receivership and being offered for sale in the first two months of 2013. In recent weeks alone, the Halfway House in Walkinstown, Dublin 12 and The Submarine in Crumlin, Dublin 12 have both gone into receivership.
Pubs that have been released for sale in recent months include Russell’s in Ranelagh, Dublin 6, which is guiding €1.75 million and has now gone to best bids; Larry Murphy’s on Lower Baggot Street in Dublin 2, which is guiding excess €1 million; Rosie O’Grady’s in Harold’s Cross, Dublin 6W, which is guiding €750,000; The Drake Inn in Finglas, Dublin 11, which is guiding excess €600,000; The Melt’n’Pot in Blackrock, Co. Dublin, which is guiding €550,000; The Malt House on James Street, Dublin 8, which is guiding €250,000 and The Hatch Bar in Newcastle, Co. Dublin, which is being offered for sale by auction later this month guiding €250,000. The sale of the leasehold interest in The Dawson Lounge in Dublin city centre for a reported €250,000 was recently confirmed.
Demand for well-located Dublin pubs is encouragingly strong with several bidders on many properties and several assets achieving higher prices than the asking price.
Although most purchasers are cash buyers, there has been some improvement in the availability of funding for licensed premises over recent months. There has also been a noticeable increase in the availability of funding for the acquisition of well-located hotels and we understand this new funding pool is also available to hotel owners for their leasing and capital expenditure requirements.
Hotel transaction numbers were well up in 2012 with 24 properties sold in Ireland last year compared to only 8 transactions in 2011. These 24 sales accounted for a total spend of €146 million between them. This momentum has continued into 2013 with several hotel sales agreed during the first two months of the year and a number of transactions currently in negotiations or in legals.
Some of the more significant hotel transactions negotiated since the beginning of this year include the sale of the West County Hotel in Ennis, Co. Clare to the Treacy Hotel Group from Waterford for approximately €2 million and the sale of the 66 bed Sheen Falls Lodge in Kenmare, Co. Kerry to a UK-based group of private investors for €5 million.
In Dublin, a deal has been agreed on the former Ormond Hotel on Ormond Quay, while an established Dublin hotelier has leased the 120 bed Plaza Hotel in Tallaght, Dublin 24. Another notable transaction related to the hotel sector was the recent sale by Lloyds of loans associated with the Bewleys Moran Hotel Group, to the US hedge fund Canyon Capital Advisors, for a reported €42 million, reflecting an approximate 70% discount.
A deal is now nearing completion on the 32 bed Barry’s Hotel in Dublin 1, which was guiding €900,000 and generated considerable interest from a range of potential users since it was launched for sale earlier this year.
Discussions are believed to be on-going with various parties interested in purchasing the 5 star Ritz Carlton hotel in Wicklow, which recently went into liquidation after a 100 day examinership failed to save the business. The Morrison Hotel, which was purchased by a Russian investor during 2012, has now re-opened following an extensive €7m upgrade and is the first Irish hotel to trade under Hilton’s DoubleTree brand.
Next month will see the opening of the 52 bed Deane Hotel on Harcourt Street, Dublin 2 and 185 bedroom Marker Hotel in Dublin’s Docklands. As banks and NAMA continue to deleverage, we expect to see more hotel assets being offered for sale over the coming months with considerable international appetite likely to be focussed on any Dublin hotels that are brought to the market.
Following the sale of 12 Dublin pubs last year, there has been a noticeable increase in the volume of pubs going into receivership and being offered for sale in the first two months of 2013. In recent weeks alone, the Halfway House in Walkinstown, Dublin 12 and The Submarine in Crumlin, Dublin 12 have both gone into receivership.
Pubs that have been released for sale in recent months include Russell’s in Ranelagh, Dublin 6, which is guiding €1.75 million and has now gone to best bids; Larry Murphy’s on Lower Baggot Street in Dublin 2, which is guiding excess €1 million; Rosie O’Grady’s in Harold’s Cross, Dublin 6W, which is guiding €750,000; The Drake Inn in Finglas, Dublin 11, which is guiding excess €600,000; The Melt’n’Pot in Blackrock, Co. Dublin, which is guiding €550,000; The Malt House on James Street, Dublin 8, which is guiding €250,000 and The Hatch Bar in Newcastle, Co. Dublin, which is being offered for sale by auction later this month guiding €250,000. The sale of the leasehold interest in The Dawson Lounge in Dublin city centre for a reported €250,000 was recently confirmed.
Demand for well-located Dublin pubs is encouragingly strong with several bidders on many properties and several assets achieving higher prices than the asking price.
Although most purchasers are cash buyers, there has been some improvement in the availability of funding for licensed premises over recent months. There has also been a noticeable increase in the availability of funding for the acquisition of well-located hotels and we understand this new funding pool is also available to hotel owners for their leasing and capital expenditure requirements.
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