(As always, apologies for any typos, it’s difficult to get good help on a Sunday!)
If you only have time for one Sunday broadsheet today, I definitely recommend picking up The Sunday times for the most comprehensive construction and property market coverage. It’s the first time in a couple of months that the newspaper has beaten the Sunday Business Post or even the Sunday Independent for unique stories and commentary.
Dun Laoghaire building transformation is a model to learn from
‘Go-ahead council transforms unrentable block of bedsit into energy-efficient apartments’, writes John Hearn. This article refers to the much-maligned Rochestown House, which is a 1970s social housing apartment block in Dun Laoghaire, South Dublin. As the building began to fall into disrepair, the local authority was faced with trying to maintain it, or having to tear it down and start over again, or perhaps to refurbish it entirely. According to the project architect, the top floor had become entirely unusable due to roof issues and as units became vacant the council could not move new tenants in due to damp and general poor condition. It was at that stage passive design specialist MosArt Architects reached out to the council to talk about the Passive House Institute’s EuroPHit programme to support projects involving energy retrofits. The architects were looking for Irish case studies to participate, in return for which the council could make use of a free passive-house design consultancy. The building was clearly in poor condition and it was expensive to run. According to the project architect, the existing fabric had no insulation, air-quality was poor and windows had to be kept open. There was also an issue with the layout of the 34 bedsits. As the accommodation was aimed primarily at downsizers, one of the first design decisions was to make the apartments larger. In order to provide for more generous sizes and keep the same number of units, it was decided to add a third storey to the building. “Getting the ventilation right posed particular challenges in a building of this size and type. We went through several options with the mechanical engineering consultant. We first looked at three centralised ventilation systems that would be installed over the new storey. There were a few problems with this. Ceiling heights were low, making it difficult to find space for ducting in overhead voids. In addition, using a dispersed ducting system would have required for the installation of a higher number of fire dampers, which would have generated a significant maintenance burden.“ The design team instead chose to install separate mechanical heat recovery ventilation units in each apartment. This is working well, with tenets of the building describing the units “as warm as toast“. This is a great example of how to bring industry innovation together with the state, via local authorities, to make unusable housing units usable again. Well done to all involved. You can read more about this particular project in the latest issue of Passive House Plus, passive.ie.
Writing in the Home Hunter column today, Valerie Flynn has a piece titled ‘When words of wisdom fall on deaf ears… If property buying is ancient history for you, the plight of today’s frustrated wannabes may be a puzzle. To avoid irritating them, there are some things you really shouldn’t say’. The article opens with the writer suggesting that “the people who most enjoy Move [the property supplement] already own a house. Reading about inexorable price rises and looking at pictures of beautiful homes is fun, if you have one. Genuine home-hunters have to brace themselves before opening these pages. It’s a bit too close to the bone.” After more than a decade of working with property buyers, including first-time buyers, some of these points really rang true for me today. For example, there is no need to tell renters that renting is dead money, they are generally not renting by choice. Although I really must point out here that in some cases renting your home can be a smart, strategic financial decision, particularly when your housing needs are subject to change and you are actively investing in other asset classes. Buying the wrong property, or the right property in the wrong location, as we have seen with many of the so-called “lost generation” in negative equity, is much more detrimental than the so-called “dead money“ spent renting. But that’s an argument for another day…
Other property news
- Both the Sunday Independent and The Sunday Times make big news of the Google deal to purchase Treasury building for an estimated €120 million. The deal is reportedly close to being struck, and commercial agents CBRE are understood to be acting for Google in the acquisition. Google currently employs over 6000 people in Dublin and is rumoured to be looking at additional office space in the Dublin 2 area.
- Writing in the Sunday Business Post today, Róisín Burke talks about developer Tommy Keane’s plan to build a retirement village in County Laois. Apparently the project has received financial backing to the tune of €60 million. If this project goes ahead, it has the potential to transform our current healthcare and care-home model. Significantly, it will have an impact on our current model of sheltered housing for the elderly. This will be an interesting project to watch.
- Developer Gerry Barrett has reportedly held talks with James Murphy, founder of Lifes2Good, about investing in his Galway portfolio including hotel, leisure and property interests.
- Padraic and Martin McHale of Welhale Holdings have built up equity of more than €36.5 million in the Number One Ballsbridge development in Dublin. The brothers own 50% of the Ballsbridge development on Shelbourne Road together with the Comer brothers, Luke and Barry.
- Continuing this success trend of Irish development brothers, Bovale Developments, Dublin building group run by brothers Michael and Tom Bailey, has just been given the go-ahead for a revised second phase of development at Charlestown shopping centre in North Dublin. The scheme will include 222 apartments in five blocks that will be up to seven storeys in height. The development also includes 6,400 m² of retail space, a crèche and an outdoor playground. As part of the planning approval, the developer must pay €2.2 million to Fingal county council towards local infrastructure, the bond of €888,000 (or €555,000 cash) must be lodged with the council before work commences.
- Cuisine de France co-founder Ronan McNamee has agreed a €66 million refinancing deal on his Chicago retail development.
- A British Reit, New Frontier, has agreed to purchase a warehouse at Ballycoolin in North Dublin for €8.5 million. This will be the Reit’s first foray into the Irish market. The warehouse is let to office supplies company, Viking Direct with lease until 2027, bringing in an annual rent of €743,518.
- Grainne Rothery, writing in The Sunday times today, has a piece ‘Whisper it quietly, off-market is real deal’. This piece refers to the “notable increase“ in off-market deals in the Irish investment market this year. Commercial agents Cushman & Wakefield estimate that €272 million worth of transactions, or just under 21% of the total investment turnover between January and September this year, related to off-market sales. By comparison, CBRE estimates that figure to be much lower. In 2015 the commercial agents estimate that just 8.6% of deals done were off-market, and for 2016 they estimate just 4.1% of all transactions are off-market (no estimate for 2017).
- The property supplement of the SBP today focuses heavily on the commercial market. Donal Buckley writes that “The capital’s commercial property market may not yet have reached its peak, as demand continues to keep pace with supplying prime areas“. He finds that office rents in Dublin look set for further increases and this is supported by a recent survey by SCSI. The extent of new office space completed and delivered between 2014 and summer 2017 is still less than the office space rented throughout that period.
- Karl Deeter writes ‘ Mortgage to rent is a sure bet: We love our middle-class welfare, and mortgage-to-rent deals are just another illusion whose true cards are revealed after the fact’. He describes the mortgage-to-rent deal as “one of the finest giveaways and rent seeking opportunities in recent decades. As with many charades, what makes it so good is the obvious nature in the trick that you can only really see after the fact.” He goes on to breakdown the true cost of the initiative to the tax-payers. It doesn’t make for comfortable reading.
- Speaking of uncomfortable reading, Finbar Filan gives a very candid interview on life and hope after bankruptcy on page 5 of the SBP today that is definitely worth a read. As always, I see no need to synopsise personal property-related stories that have no relevance to the market and are little more than industry gossip and speculation, however, it is always appreciated when prominent businesspeople and developers have the integrity to share insights from their failures as well their successes.
- I’ve been watching with interest the trend for developers to by-pass estate agencies when it comes to selling new homes and apartments. There are very distinct advantages to doing this, however, there are disadvantages too. The fine line between those, in my opinion, is technology and the developer’s ability to understand and connect with changing buyer trends. With this in mind, it is interesting to see Cairn Plc directly market a number of their newly-launched or soon-to-be launched housing developments in the same publications as their appointed selling agents are marked in the same developments.
To keep up-to-date on all things tech and innovation for the planning, construction and property industries, head over to http://www.prop-tech.ie, the national resource website for innovators, investors and mentors.
We have no more free mentoring sessions for #proptech start-ups available in 2017, however, we are now taking appointments for dates in January, February and March before this CSR initiative ends, email email@example.com for details.
Property Insiders Guide
Oak Tree Press has launched their new ebook series for the Irish property market , further details here: http://www.successstore.com/property-insiders-guides.html
Also, the new book, written by myself and solicitor Susan Cosgrove of Cosgrove Gaynard is now available: