15 October 2019
Last week’s Budget proved a disappointment for investors in commercial property, putting Ireland as the third highest in Europe in terms of transaction costs for commercial. It also introduced changes to both REIT’s and ICAV’s that no longer make it as attractive to investors. Since the budget on Tuesday the message we have received from our investor base it that of disappointment and frustration, every year having to deal with budgets that increase cost and change tax treatment is not a stable environment for investors.
On a more positive note its allocation of funding to address the challenges of a no deal Brexit is welcome. This funding should help to protect businesses and the recent recovery in the economy and thus help to provide reassurance for the occupier sector.
Meanwhile the Irish Times reported that Cushman & Wakefield has brought Naas Shopping Centre to the market with a €4.8 million guide price. Completed to shell and core, it comes with four existing retail properties on the town’s Main St.
Finally, we are delighted to sponsor and help bring the annual ULI conference to Dublin for the third year running. Held on Thursday 24 October in 1 Windmill Lane, this year’s event will focus on ‘Good Density: Drivers, Dividends and Debates’. Register for this event here.
Kind regards, Aidan Gavin
New heights: Marlet submits plan for €250 million 21-storey tower Marlet Property Group is seeking planning permission for a landmark 21-storey tower development in the heart of Dublin city. If approved it will be one of the tallest residential buildings in the city, availing of the government’s revised caps on heights in some urban areas.
The €250 million tower on the site of the old Apollo House on Tara Street, would be mainly residential with 56 apartments sitting over a state-of-the-art office complex.
The Sunday Times carries a similar report and says the apartments will be accommodated in a 10-storey tower on top of an 11-storey office development that already has planning permission and is under construction.
The project, to be known as College Square, spans the Apollo House site and the adjoining College House and Screen Cinema sites. Marlet is reported to have paid more than €100m for the three plots and will spend €200m on the construction work.
Developer to submit new planning application for Iveagh Markets building Dublin City Council has been seeking to repossess the historic Liberties building which is in a parlous state of dereliction, saying that a 15-year-old deal with Developer Martin Keane to develop it for a new market and hotel is no longer valid.
Keane has said he is forging ahead and added on Friday that a new planning application would be submitted at the end of this month.
Tide turns against shared living concept The tide has turned against shared living this year. In recent weeks, Dublin City Council’s planning division has issued several key decisions that suggest they won’t be approving the shared-living applications lodged to date unless developers drastically amend their approach.
Bartra Capital, controlled by Richard Barrett, has been repeatedly refused permission to build a 102-bedspace shared living development in Rathmines. Other applications to develop a 61-bed shared living scheme in Harold’s Cross and a six-bed scheme in Crumlin were also refused by planners.
Beneficial ownership amendment to be added to investment measure The government will introduce an amendment to the Investment Limited Partnership (ILP) bill to ensure the fund structures are covered by beneficial ownership legislation. The move was made by Minister of State at the Department of Finance Michael D’Arcy following revelations by the Sunday Business Post that the ILP funds were not covered by European anti-money laundering law which requires the identification and registration of the real owners behind obscure and complex funds.
“There will be a substantive amendment related to the introduction of a beneficial ownership register for ILPs. This is to ensure any investors in an ILP structure will be treated the same as one in our other investment funds vehicles with separate legal personality or structured as a trust,” he said.
Perpetua motion as brothers bid to expand their fitness brand Spurred on by the recent growth of Ireland’s fitness sector, Michael and David Price opened Perpetua Gym in Dublin in April at a cost of €2 million.
Now, with long-term plans to expand their brand in the domestic market and beyond, the brothers are on the lookout for suitable premises to house two more Dublin gyms next year. They previously ran two Crossfit gyms and decided to pivot the business earlier this year.
Dublin 8 picks up pace as new developments come on stream The property supplement has a feature which says that the pace of urban renewal in Dublin 8 is gathering momentum as reflected in the latest of the new developments to come on stream.
The area’s need for such urban renewal was recently reflected in a Geodirectory survey which shows that this relatively central part of Dublin recorded the highest commercial property vacancy rate in the capital. It had a 15.4pc vacancy rate among commercial properties in the second half of 2019.
Pret a Manger sets its sights on Irish expansion Well known sandwich chain Pret a Manger is set to open in Ireland next year. It is understood the group has identified two locations, one of which is in Dublin city centre. The group has 389 stores in Britain and is owned by JAB Holdings.
Merrion Vaults strikes gold as it prepares to invest in international growth plans Merrion Vaults, an Irish safety deposit rental company, is to open new facilities in New York, Barcelona and Edinburgh as part of an investment worth up to €3m. Shavo, Merrion Vaults’ parent company, plans to expend the number of safe deposit boxes it rents to customers from 8,000 to 30,000 over the next five years.
After opening in Ballsbridge, Dublin, it has already expanded into Glasgow, Newcastle, Liverpool and Nottingham.
Donohoe fails to get stamp of approval for property changes When it comes to institutional property changes the Budget may have been a case of closing the door after the horse has bolted.
In a commentary on the effects of the Budget on the property market, two senior accountants are sceptical that the 1.5pc increase in stamp duty will achieve the €141m yield expected by Finance Minister Paschal Donohoe. That would require transactions totalling €9.4 billion, one explains.
Avestus offshoot to build houses in Rush Skerries Road Partnership, a company linked to Avestus Capital Partners, has applied for permission to build 117 houses and 48 apartments in the fast-growing north Dublin town of Rush. Last year Avestus raised €160m to invest in the Irish residential rental sector.
Apple seeking a buyer for Athenry data centre site The tech giant Apple is selling a 500-acre plot near Athenry in Co Galway where it planned to build an €850m data centre. A sales brochure for the land does not disclose the price being sought. The American tech giant started is believed to have paid Coillte, the state forestry agency, close to €15m for the Galway site, which is mostly forested.
Donhoe knocks it out of the Henderson Park One of the biggest losers in last Tuesday’s budget looks to be Henderson Park Capital Partners.
Henderson Park, which is purchasing the Irish property company Green Reit for €1.3bn, got hit twice, as the finance minister Paschal Donohoe closed off two loopholes. A tweak to the Reit legislation means it may be saddled with a capital gains tax bill.
Henderson Park is also using a High Court scheme of arrangement to effect the takeover. Here, existing shares in Green Reit are cancelled and then new shares reissued. Under the scheme, there is no transfer of shares and therefore no stamp duty to be paid.
Practically every takeover of a stock market company has been structured this way in the past five years. Donohoe last week moved so that changes of ownership through such schemes will now be subject to 1% stamp duty. The liability for Henderson Park is €13.8m.
So last Tuesday afternoon it seems Henderson Park discovered it had an unexpected tax liability — estimated at €65m — just 24 hours after Green Reit shareholders approved the deal. The shareholder approval locked and loaded the transaction. It cannot back out.
Investors fork out to fund expansion of Leon eateries Cibus Concepts, which holds the Irish franchise for healthy fast-food chain Leon, has raised €3.6m from a number of strategic investors, including Tetrarch Capital’s Michael McElligott, to help fund its national expansion. Cibus Concepts, which trades as Leon Ireland, is to raise a further €1m by the end of the year.
Cibus opened its first Leon in Dublin’s Temple Bar in May and will open another one at Dundrum Town Centre in March next year. It hopes to announce two more high-profile Dublin city locations shortly. Stuart Fitzgerald, Leon Ireland Managing Director and a shareholder, expects that the chain will have five restaurants by next May. Its target is 20 outlets within four years.
Tenancy deals offer respite from equity funds Up to 200 households avoided inclusion in an €800m sale of non performing mortgages by Ulster Bank last week by agreeing to surrender ownership of their homes in exchange for a lifetime tenancy.
Most are expected to end up in the government-backed mortgage-to-rent scheme, which has so far supported 1,680 households saddled with unsustainable mortgages, according to new figures released by the Housing Agency last week.
The scheme writes off a family’s mortgage debt while allowing them to remain in their homes, but as tenants rather than owners. Almost 600 mortgage-to-rent deals have been completed, according to the Housing Agency, with another 1,100 being processed.