Crane Survey Conference Planning & Development Statistics - March 2022 - Deloitte
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Crane Survey Conference Planning & Development Statistics March 2022
John Doddy Partner and Real Estate Leader, Deloitte
Agenda
Time Topic Speaker
08:30 – 09:00 Registration & Networking Breakfast
09:00 – 09:10 Welcome John Doddy, Partner and Real Estate Leader, Deloitte
09:10 – 09:30 Keynote speech Darragh O’Brien TD, Minister for Housing, Local Government and Heritage
09:30 – 09:50 Crane Survey Deep-Dive: Trends & Perspectives Eoin O’Lideadha, Partner, Deloitte
Moderator:
• John Doddy, Partner, Deloitte
Panel:
• Eloise Heron, Chairperson of the Society of Chartered Surveyors Ireland
09:50 – 10:30 Panel Discussion
Sustainability Working Group
• Eugene O’Shea, Managing Director, Walls Construction
• Parag Joglekar, Head of Development, Respond
• Sean O’Neill, Managing Director, Park Developments, and Chairman, Irish
Home Builders Association
10:30 Closing Remarks John Doddy, Partner and Real Estate Leader, Deloitte
Crane Survey Conference 3
Darragh O’Brien, TD Minister for Housing, Local Government, and Heritage
Eoin O’Lideadha Partner, Deloitte
Residential Commencements
Schemes that included 20+ units had 24,304 units Annual Units In Schemes with 20+ Units
commenced in 2021. This translates to c.30,304* 70,000
60,000
units in total. 50,000
40,000
30,000
• 40% increase on 2020 20,000
10,000
0
• 16% increase on 2019 (pre-pandemic) Total Units Dublin Units Cork Units Rest of Ireland Units
Applications Lodged Planning Granted Commencements
Annual Commencements
35,000
30,304
30,000 26,237
25,000 22,467 21,686
20,000 17,572
13,234
Highest level of commencements in the period 15,000
10,000
8,747
2015 – 2021. 5,000
0
2015 2016 2017 2018 2019 2020 2021
*Deloitte track all schemes with 20+ units. Historical data shows that c. 6,000 units including one off builds are commenced each year
under this threshold.
Crane Survey Conference 6
Planning Pipeline
The pipeline is looking healthier with our data showing planning grants of 2021 Planning Granted:
42,453* units over the last 12 months and 24,304* commencements in 2021.
37% 57%
6%
Dublin Units Cork Units Rest of Ireland Units
*Deloitte track all schemes with 20+ units. Historical data shows that c. 6,000 units including one off builds are commenced each year
under this threshold.
Crane Survey Conference 7
Crane Survey Event
Judicial Reviews & Viability Issues
187.5 days to secure planning permission Average Time to Secure Planning (Days)
Q1 Q2 Q3 Q4
across Ireland in 2021 208 190 172 180
Mix of Unit Types Commenced in 2021
• Judicial Reviews reducing commencements 2020 Granted Planning Permission 2021 Commencements*
• Will transition from SHD to LRD reduce Judicial Apartments 26,224 6,691
Reviews? Housing 18,314 15,715
• Material Inflation for 2021 was 8.6% but certain key
materials were higher:
• Structural Steel 44.7%
• Timber 43.1%
• Electrical Fittings 14%
• Plaster 13.9%
*Deloitte track all schemes with 20+ units. Historical data shows that c. 6,000 units including one off builds are commenced each year under this threshold. Additionally, 1,898 units were unclassified in the planning
data collected. It is assumed they are apartments in mixed use schemes.
Crane Survey Conference 8
Other Market Challenges
1. Connections to Utilities & Local
Authority Approvals.
2. Labour Shortages of key trades
increasing prices.
3. Rents increased 10.3% year on year.
4. House Prices increases 7.7% year on
year.
Crane Survey Conference 9
The Office Sector
Of the 25 applications lodged in 2021; Dublin: Office Scheme Commencements
No. of schemes (Q1-Q4 2021)
• 11 were in Dublin 8
• 2 in Cork 6
• 12 were outside
4
2
these cities. 0
Applications Lodged Planning Granted Commencements
The office sector had Q1 Q2 Q3 Q4
a very strong finish
to 2021, with 40% of Rest of Ireland: Office Scheme Commencements
No. of schemes (Q1-Q4 2021)
all office transactions 6
taking place in Q4. 4
Sustainability a key issue 2
in the office market. 0
Applications Lodged Planning Granted Commencements
Q1 Q2 Q3 Q4
Crane Survey Conference 10Retail Challenges
The key challenges for the high street:
• The strength of the covenants and lease terms have changed significantly.
• A change in the types of leases available in high street retail, with tenant-friendly terms such as
short-term deals, increased rent-free incentives and more regular break options.
• More pro-active asset management and strategic direction to attract
and retain tenants.
• Funding appetite for retail has been
very limited
‒ Subsets of retail that have continued
to perform well during lockdown
include retail parks, neighbour-
hood centres, and grocery outlets.
Crane Survey Conference 11Undersupply in Logistic Market
• Logistics has become a strong asset class with
good levels of yield compression and substantial
capital (in excess of €1 billion) looking to invest in
these industrial and logistics assets in 2021.
• Existing logistics developments are attracting
strong valuations.
• There is strong demand and low vacancy levels for
new buildings in or near large population areas
such as Cork, Dublin, Limerick and Galway. By the
end of Q3 2021, there was a 20% reduction in
available space.
Crane Survey Conference 12Data Centres – Continued Expansion but Faces Challenges
The major data centre
operators in Ireland,
such as Microsoft,
Google, Amazon Web
Services and Meta
(Facebook’s parent
company) continued
to expand and see
Ireland as a significant
player in the sector.
Crane Survey Conference 13Regional Hotels Outperform Dublin Hotels
• Regional hotels occupancy at 52% and Dublin hotels at
38% for the year-to-date October 2021.
Dublin/Regional occupancy 2019-2021
100%
82%
78%
80%
60% 52%
46%
38%
40% 31%
20%
0%
Dublin occupancy Regional occupancy
2019 2020 2021
Crane Survey Conference 14Crane Survey Event
Rates Have Held But Costs are Increasing
2021 ADR outperforming 2019 & 2020 levels Dublin/Regional ADR 2019-2021
€ 142
in the Regions and Dublin achieving approx. € 150
€ 113 € 110
€ 120 € 103
80% of 2019 ADR. € 100
€ 87
€ 90
Dublin bedroom numbers will grow as the € 60
€ 30
pipeline of up to 4,000 hotel bedrooms reach
€0
completion in the medium term. Dublin occupancy Regional occupancy
2019 2020 2021
Dublin/Regional RevPAR 2019-2021
Challenges
€ 150
€ 117
• Government supports being removed € 120
€ 90 € 77
• Wage inflation to secure labour € 60 € 42 € 40
€ 57
€ 31
• Utility costs € 30
€0
• Return of the corporate traveller Dublin occupancy Regional occupancy
2019 2020 2021
Crane Survey Conference 15Favourable capital raising environment within the Irish Real Estate sector
Tailwinds Headwinds
• Growing population • Global volatility
• Under supply of housing • Uncertainty around planning
• Investors chasing yields • Interest rate rises
• Low interest rate • Tapering of quantitative easing
environment • Central Bank proposed caps on ICAV leverage levels
• Strong FDI • Government intervention (HPI linked rent caps, changes in taxation, increased
Part V)
Crane Survey Conference 16Tax Amendments for 2022
Residential Zoned Land Tax Pre-Letting Expenses
• 3% annual tax based on the market value of certain • Relief for landlords on certain pre-letting expenses with
specified land. respect to residential units that have been vacant for 12
months has been extended by 3 years to 2024.
Interest Limitation Rule
• Financing costs of companies which previously have
been fully tax deductible may now be restricted.
Help to Buy (HTB)
• The HTB will continue at its current enhanced rates for
2022.
Crane Survey Conference 17Panel Discussion
Panel Discussion
Ask our panel a question
Scan the QR code on the tripod
Eloise Heron Parag Joglekar leaflet, or go to Menti.com and
Chairperson of the Society Head of Development, insert the code 6978 4005
of Chartered Surveyors Respond
Ireland Sustainability
Working Group
Eugene O’Shea Sean O’Neill
Managing Director, Walls Managing Director, Park
Construction Developments, and
Chairman, Irish Home
Builders Association
Moderated by:
John Doddy
Partner and Real Estate
Leader, Deloitte
Crane Survey Conference 19At Deloitte, we make an impact that matters for our clients, our people, our profession, and in the wider society by delivering the solutions and insights they need to address their most complex business challenges. As the largest global professional services and consulting network, with over 312,000 professionals in more than 150 countries, we bring world-class capabilities and high-quality services to our clients. In Ireland, Deloitte has over 3,000 people providing audit, tax, consulting, and corporate finance services to public and private clients spanning multiple industries. Our people have the leadership capabilities, experience and insight to collaborate with clients so they can move forward with confidence. This publication has been written in general terms and we recommend that you obtain professional advice before acting or refraining from action on any of the contents of this publication. Deloitte Ireland LLP accepts no liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication. Deloitte Ireland LLP is a limited liability partnership registered in Northern Ireland with registered number NC1499 and its registered office at 19 Bedford Street, Belfast BT2 7EJ, Northern Ireland. Deloitte Ireland LLP is the Ireland affiliate of Deloitte NSE LLP, a member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”). DTTL and each of its member firms are legally separate and independent entities. DTTL and Deloitte NSE LLP do not provide services to clients. Please see www.deloitte.com/about to learn more about our global network of member firms. © 2022 Deloitte Ireland LLP. All rights reserved. Designed by CoRe Creative Services. RITM0955156
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