Firstly, as awards season closes in there were four different awards events on this week, with three on the same night. Congratulations to all those worthy companies short-listed and to each of the winners. Entering prestigious awards is a massive job and the short-listing criteria is tough so shortlisted organisations can be proud to be listed among the very best in the business, well done!
As a side note, regular readers will know that I try to keep politics out of my property synopsis each week – as I wish we could keep it out of housing policy issues altogether; however, quote of the day must surely go to Lise Hand writing her column in The Sunday Times about the Francis Fitzgerald furore: “If Shane Ross throws her under the bus, it’s the nearest he’s got to public transport“.
- Speaking of public transport, developer Sean Mulryan’s Ballymore Properties is set to partner with CIE on the development of a new high rise office scheme at Grand Canal Quay in Dublin’s Docklands (Boston Sidings). Sean Mulryan beat out competition from Johnny Ronan and Paddy McKillen who also submitted tenders for the development of the site, which is expected to accommodate up to 120,000 ft.² of office space.
- Richard Barrett, of Bartra Capital, is making headlines once again for his proposed “shared living“ apartment model, which he describes as “a new experiment in social living“ where tenants would rent a bedroom and bathroom but share centralised kitchen dining and laundry facilities, the type format that exists in other European capital cities. It is essentially an extension of the student housing model aimed at providing people, especially those under 30, with a affordable and flexible living arrangement close to the city centre. He has ear-marked a site in Smithfield that might be suitable. This will be an interesting one to watch. There is a full business insight interview with this prolific developer in the Post Plus section today, starting on the front page and it’s definitely worth a read.
- Avestus Capital Partners, the property investment house funded by former executive’s at Derek Quinlan‘s firm, is apparently putting the finishing touches to a new €200 million property fund dedicated to the private rented sector. The fund will consider development opportunities as well as the acquisition of completed apartment blocks.
- Tom Lyons writes ‘U2’s Edge used Delaware tax strategy for Malibu eco-mansions: Rock star embroiled in 12-year fight with environmentalists’. This refers, of course, to guitarist Dave Evans and his long-running struggle to develop 400 acres in Malibu after a protracted agreement saw him acquire the loans out of Nama and from project partner Derek Quinlan. He has now finally secured planning permission to develop the Malibu site.
- In construction news, a new contractor is to be appointed to the Central Bank Plaza site on Dame Street. According to Fearghal O’Connor writing in the Sunday Independent today “Construction company John Paul is currently removing it’s scaffolding and hoarding from the site. A new specialist contractor is expected to come on site soon, it is understood. It was unclear if this would require a new tendering process. John Paul was appointed under a management contract by international real estate firm Hines earlier this year.” A spokesman for Hines confirmed that a new specialist contractor had been appointed for the next stage and they are expected on site in the coming weeks.
- Grainne Rothery has a piece today headed ‘Small hotels can’t host large investors’, referring to the massive drop-off in hotel sales this year. Hotel transactions for the first nine months of the year so far total just 23 compared with 37 for the same period in 2016. In total last year there were 66 hotel transactions for value of €800 million. One explanation given for this is that “most of the hotels that were typically appeal to international investors had already traded“.
- The same journalist also has an article referring to the lack of new shopping centre developments underway in Dublin and current initiatives to revamp existing facilities in order to attract occupiers.
- The Minister for Finance Paschal Donohue has promised to tackle schemes to avoid budget 2018’s higher rate of stamp duty, according to Jack Horgan-Jones writing in the SBP today. This follows reports of legal schemes, for example, transferring the ownership of buildings into a so-called “corporate wrapper“ (a special purpose commercial vehicle) in order to avoid stamp duty.
Other property news
- There is a stunning photo on the front page of the Move section showcasing a snow-covered castle design home with the headline ‘Driving homes for Christmas: Traditionally, sales went flat during the festive period, but the market has changed’. This article refers to a trend, which we have seen over the last six or seven years, making the Christmas period quite a busy sales time for estate agencies. This is something that estate agencies have been talking about for the last number of years. Rural agents find that the most recent wave of emigrants tend to return home for a few weeks over the Christmas and New Year period. This is a good time to check out the local market and to make enquiries for a potential move back to Irish ours. Of course, this period also happens to coincide with the most common time of the year for people to reflect on their lives and make key decisions for the coming year. I would suggest that most big housing decisions, regardless of when they are acted upon, are made or at least discussed over these seasonal holidays. Smart property businesses have been tapping into this for the last number of years for example; Kinsella Estates use this time of year to connect with potential buyers and investors in the south-east, Wicklow and Wexford. Also, I see Hunters have rolled out their pre-season advertising campaign across many of the broadsheets this week and it’s definitely one to draw us in!
- Valerie Flynn, writes in The Sunday Times today about the likely expensive, future problems facing apartment owners who bought during the Celtic tiger era. Dublin city council‘s housing committee was last week warned that a 250-unit development with 14 lefts would need a sinking fund of €700,000 to replace these after 25 years. Directors of the Apartment Owners Network David Rouse and Bryan Maher are quoted throughout, Commenting on research that indicates 40% of owner-management companies have no sinking funds in place. The Apartment Owners Network, which represents the interests of owner occupiers and investors, is looking for new regulation of owner-management companies and legislation that would require developers to disclose the true cost of maintaining the building and services over the lifetime of the asset, which they suggest is 35 to 40 years. They also discussed insurance premiums, which have increased 20% to 30% over the last number of years.
- In the business section today Philip Connolly writes ‘Green Reit shareholders urged to rebel against leadership’. PRIC, The British proxy adviser, has told shareholders to oppose the re-election of Stephen Vernon and Pat Gunne to Green Reit’s board at the AGM next week as they cannot be considered independent due to their directorship roles in both the Reit and Green Property Reit Ventures, which is the company’s investment manager. It is interesting to note that Hibernia Reit internalised its investment manager, WK Nowlan Reit Management, two years ago while Green kept the investment manager separate to the public company.
- Home hunter Aaron Brazil writes a column in The Sunday Times today ‘ what chance have I got against fake bids?’ He refers to a conversation with IPAV president Brian Dempsey and writes “There’s no magic secret. It really is just about the money, but sometimes it’s about fake money. Fake money means money spent by word alone: the sum a bidder says they’re willing to spend, and then the even bigger sum the next bidder places, and so on, until the seller says stop. Until now, there’s been no way of knowing if a bid competing with yours exists. House hunters must take agents at their word. According to Dempsey, unconfirmed and undocumented building works both ways, and if you’re an estate agent, it’s frustrating when over-zealous potential buyers bid beyond their means only to vanish when the pressure is really on.“ The industry’s handling of the Fianna Fáil-proposed regulations for greater transparency have only reinforced the need for same. This is a great opportunity for estate agents who are embracing innovation, emerging technologies, and a new way of doing business to step up and show leadership. As consumer-driven progress is forced upon the industry, the gap between the best in the industry and all the rest is widening. The message to Irish estate agencies is clear, it really is time to pick a side and ensure that your firm is on the right side of that gap.
- Ronan Lyons has an article in the Sunday Independent today repeating his calls from early in the week for more apartments, rather than houses, in order to respond to current demand. There are several other articles across the other papers today referencing the same story. On a purely numbers basis, of course he is right; however, house hunters and investors who will only consider houses and who are finding houses not to be “a glut“ but rather in chronically short supply will not be too welcoming of this news.
- The SBP property supplement today is a review of their hosted property summit earlier this week so it’s mainly sponsored content in this issue but lots of interested titbits.
I tend not to cover issues and stories about homelessness in my weekly roundup and there’s a good reason for this; I believe that we have allowed so-called ‘charities’ to use the crisis to jockey for position and access to state funds. It is not popular to criticise charitable work particularly within our own industry, however, there are no fewer than 23 registered charities and up to 70 organisations claiming to help people in homelessness and drawing down state funds in order to do this. Clearly what they are doing is not working. As the vast majority of these have paid management and staff with organisational expenses like office premises and auditors, it is not a stretch to see resources wasted. Unfortunately we have allowed homelessness to be turned into an entire sector within the property industry and this sector is employing close to 1000 people and has annual payroll in excess of €80 million. It is crucial that we allow the organisations that are equipped to actually help with this crisis to do so and effectively get rid of the others, which are draining much-needed resources. I spoke about this difficult topic on Newstalk FM last week and you can listen back (with an open, compassionate yet logical mind please) here:
John Burns writing in his Atticus column today reveals that an Taoiseach has received support from an “unexpected quarter“ for his comments about homelessness. Independent councillor Jimmy Guerin spoke out about the emerging homelessness “industry“ in Ireland. He describes how recent policy changes instructing local authorities that half of all homes they allocate must go to people in emergency accommodation has had unintended consequence. He went in to suggest that “People soon realised it is far better to live in emergency accommodation and wait a year or two on a house, as opposed to a wait of 10 years or more on the ordinary housing list“.
It is vital for me to point out here that there is a handful of established and highly effective charitable organisations doing incredibly important work with people in homelessness and they deserve all of our support and the funds available through the state to continue.
In fact, the Simon Community, Focus Ireland and Peter McVerry Trust have joined forces to set up the Refund Project. This is an excellent initiative appealing to people who are in a position to donate their Irish Water refund. The refunds are estimated to amount to €173 million. While many families will need this refund, for others, the money spent will already have been written off and this might be a way to help with our homelessness crisis in time for the Christmas period. If you can support this critical work, through these credible organisations, you can donate at refundproject.ie from December 4th.
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
The first three books in the series are now available, starting with:
(Finally, as always, apologies for any typos, it’s difficult to get good help on a Sunday!)