Agents pick the most significant deals (for the six months to end of March 2016)
Elm Park campus, Merrion Road, Dublin
Type of deal Investment
Vendor Duff & Phelps (receivers)
Purchaser Starwood Capital and Chartered Land
Size 17.3 acres
Price €183.47m (£144m)
Chosen by Aidan Gavin, managing director, DTZ Sherry Fitzgerald
When it comes to mixed-use investments, one of the most valuable recent transactions in Ireland was the purchase of the Elm Park campus by a joint venture involving Starwood Capital and Chartered Land. Located in prestigious Dublin 4, Elm Park stands on 17.3 acres of prime land. It generates €9.5m from office, residential and retail accommodation and the new owners plan to invest around €35m on enhancements that will help them get more out of their new acquisition. Further rental income could also be generated from at least one of the office blocks where Swiss multinational pharmaceutical company Novartis is paying €1.46m for 85,000 sq ft. This equates to €17 per sq ft at a time when prime Dublin office rents are being forecast to rise to €65 per sq ft. This historically low rent, set in 2013 when it took the lease, is subject to a rent review in 2018.
Project Jewel, Dublin
Type of deal Investment
Vendor Nama and Chartered Land
Purchaser Allianz & Hammerson
Size 1.5m sq ft in Dundrum town centre, plus various others
Value €1.85bn (£1.46bn)
Chosen by John Moran, managing director and head of investment, JLL, Dublin
Two aspects make the deal involving Project Jewel stand out: it represents both the largest sale from Nama to date, and also the largest, single investment transaction so far in Ireland. The portfolio included loans relating to Dundrum town centre, 50% of the Ilac shopping centre, 50% of the Swords Pavilions shopping centre, the Dundrum Phase II development site and the Dublin Central development site off Henry Street. In acquiring the Project Jewel loan portfolio from Nama, Allianz and Hammerson outbid three underbidders in what was a highly competitive and complex deal. The €1.85bn deal, agreed as a 50:50 joint venture, reflected a 28% discount on the gross liabilities on the €2.57bn Project Jewel. This transaction and the international attention it has commanded is testament to the quality of the assets that underlie the loan sale. This deal further reinforces the confidence international investors have in the Irish economy.
8-10 Donegall Square North, Belfast
Type of deal Investment/Leasing opportunity
Vendor Danske Bank
Purchaser Cabra Property Company
Size 27,328 sq ft
Initial yield c2.8%, reversionary 6.95%
Price In excess of £5.75m asking price
Chosen by Martin McDowell, managing director, Osborne King
This transaction is a major indication that the growth potential of Belfast’s office sector is being taken seriously in the marketplace. Belfast City Council has occupied the basement, ground and mezzanine levels for 15 years from July 2013 on a stepped rental agreement with annual fixed increases until an open market review in 2022. The additional five floors of refurbished office accommodation were vacant at the time of sale, albeit with an ERV based on £14.50 per sq ft. Following a marketing campaign that promoted, among other things, the property’s spectacular location overlooking City Hall, a new leasing agreement with a tenant for the remaining 17,104 sq ft of space was secured. I anticipate rentals within this sector of the Belfast market are likely to show double-digit growth over each of the next couple of years. So, a deal such as this sends out a positive message to investors that there are opportunities here that shouldn’t be ignored.
7 things you need to know
12.2% GVA growth for Belfast for the period 2015-2025
£358m Amount invested in Phase 1 development of Titanic Quarter, attracting 2m visitors and £105m revenue since opening
€55 per sq ft Prime Dublin office rents, rising to €65, compared with €25-€30 in suburban markets
€35.1m The largest hotel sale so far in Cork, paid by Dalata Hotel Group for the Clarion Hotel
6.4m Total population for Ireland, comprising 4.6m in the Republic of Ireland and 1.8m in Northern Ireland
4.6m sq ft Industrial and logistics space take-up in Dublin during 2015, the largest annual figure recorded so far
2.8m sq ft Amount of office space under construction in Dublin. The largest single development is the 370,000 sq ft Microsoft site, South County Business Park
Going up
The EXO, which at 73m (240ft) will be Dublin’s tallest office tower, gained planning approval. Receivers Grant Thornton confirmed the 224,500 sq ft office at Point Village was consented following an application funded by Irish bad bank NAMA.
Green Property Group appointed JLL and Eastdil Secured to sell Ireland’s largest shopping centre, the 1.2m sq ft Blanchardstown Centre in Dublin, for more than €903m (£691m).
In his late 2015 spending review, chancellor George Osborne announced an increase in the block grant for Northern Ireland to more than £11bn by 2019-20. Funding for capital investment in new infrastructure would also rise by more than £600m over five years.
Green REIT completed a new set of leases with Vodafone at Central Park, Dublin, where the telecoms firm agreed to remove a lease break option in 2018 and committed to offices until 2026.
McAleer & Rushe entered into a £70m-plus agreement with Queen’s University, Belfast, to develop 1,200 student bedrooms.
Going down
Four Seasons Health Care announced plans to close seven loss-making sites in Northern Ireland, describing the decision as “difficult but unavoidable”.
