Investment Market Analysis - Dublin Office - IN ASSOCIATION WITH - Business Plus Magazine
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Dublin Office Investment Market Analysis 2019 Edition I N A S S O C I AT I O N W I T H
F O R E W O R D
P R O F I L E O F D U B L I N
D U B L I N O F F I C E M A R K E T P E R F O R M A N C E
9.2%
RANKING TABLES - OFFICE SECTOR PERFORMANCE: 2018, 2017 & 2016 TOTAL RETURN
TOTAL RETURN - % YEAR-ON YEAR
RANK 2018 RETURN 2018 RANK 2017 RETURN 2017 RANK 2016 RETURN 2016
All Dublin Office 9.2 6.2 11.8
North Suburbs
1.8%
1 12.5 1 12.5 1 24.3 1 YEAR
South & West Suburbs
Blackrock & Dún Laoghaire
2
3
11.9
10.4
5
8
5.7
2.3
3
7
12.8
9.1
DECEMBER
2018
Dublin Office
Dublin 1 4 9.9 4 6.9 4 12.3 Investment
Market
North Docks & IFSC 5 9.8 3 7.1 5 12.1 RENTAL GROWTH
Dublin 4 6 9.0 2 7.2 2 15.2
Dublin 2 7 8.7 6 5.6 6 10.9
South Docks 8 8.4 7 5.5 8 8.9
1 YEAR
RENTAL GROWTH - % YEAR-ON YEAR DECEMBER
»» This report takes a closer look at the Dublin office
2018 investment market in particular, analysing bespoke data
RANK 2018 RETURN 2018 RANK 2017 RETURN 2017 RANK 2016 RETURN 2016 from MSCI which tracks performance across a sample4
All Dublin Office
of Dublin office investments which have been broken
Blackrock & Dún Laoghaire 1
1.8
6.4 4
3.2
3.6 8
7.4
4.4
ALL DUBLIN down into eight distinct office submarkets.
OFFICE MARKET
»» On a standing investment basis, the All Dublin Office sector
Dublin 4 2 3.5 3 4.5 7 6.0 recorded a total return of 9.2% in the year to December
4.5%
South & West Suburbs 3 3.0 6 2.3 3 7.5 2018, representing a notable increase relative to 2017
North Suburbs 4 2.2 1 9.8 1 10.4 PERFORMANCE 2018 when annual returns stood at 6.2%. There was however
some variance in the performance of the underlying nodes
within this sample, with suburban locations recording
South Docks 5 1.8 2 4.6 2 8.6
stronger returns than city centre locations.
Dublin 2 6 1.4 5 3.5 5 7.4
CAPITAL GROWTH »» Rental values moderated throughout 2018 with the
Dublin 1 7 1.3 8 1.1 4 7.5
data reporting All Dublin Office rental inflation of just
North Docks & IFSC 8 0.4 7 1.5 6 7.4 1.8% in 2018 compared with 3.2% at the end of 2017.
Again variations have been seen across the various
submarkets with offices in Blackrock & Dún Laoghaire
recording particularly strong rental value growth during
EQUIVALENT YIELD - % AT DECEMBER 2018
this period.
5.4%
1 YEAR
RANK 2018 YIELD 2018 RANK 2017 YIELD 2017 RANK 2016 YIELD 2016
All Dublin Office
DECEMBER »» Equivalent yields for the All Dublin Office sector stood at
5.4 5.5 5.9 2018
5.4% in December 2018, representing a decline of 13.7
bps relative to December 2017. Yield compression has
Blackrock & Dún Laoghaire 1 7.8 2 7.7 2 7.8
been recorded across six of the eight office submarkets
North Suburbs 2 7.5 1 7.8 1 8.0 since our last report, with just Blackrock & Dún
EQUIVALENT YIELD Laoghaire and the South Docks submarket recording
South & West Suburbs 3 6.2 3 6.3 3 6.5
slight increases.
Dublin 4 4 5.6 4 5.6 7 5.6
»» In this report, we have focused on key metrics such as
Dublin 1 5 5.3 5 5.5 4 6.2
total return, rental growth, capital growth and yield
North Docks & IFSC 6 5.2 6 5.4 5 6.0 measures to examine performance across eight office
submarkets within the broader Dublin market.
Source: MSCI
Dublin 2 7 5.2 7 5.4 6 5.7 % AT
South Docks 8 4.9 8 4.9 8 5.2 DECEMBER
2018
4. - The total value of the sample under analysis is €6.76 billion across 182 unique assets.
D U B L IN OF F ICE I NV ESTMENT MAR KET ANALYS I S 2019 7
D U B L I N 1
D U B L I N 1
N O R T H D O C K S & I F S C
N O R T H D O C K S & I F S C
D U B L I N 2
D U B L I N 2
COUNTY DUBLIN
S O U T H D O C K SS O U T H D O C K S
D U B L I N 4
D U B L I N 4
DUBLIN 4
RECENT OFFICE INVESTMENT DEALS
PROPERTY LOCATION PRICE INITIAL YIELD
Belfield Office Campus Dublin 4 €90m 4.8%
Two Haddington Buildings Dublin 4 €24m 5.4%
22 Upper Baggot Street Dublin 4 €2.2m 4.6%
19 Herbert Place Dublin 4 €1.8m 3.9%
RECENT OFFICE OCCUPIER DEALS
PROPERTY LOCATION TENANT AREA (SQ.M)
Former AIB Bankcentre, Ballsbridge Dublin 4 Facebook 80,826
Boland’s Quay Dublin 4 Google 19,513
AIG House, Merrion Centre Dublin 4 Hibernia College 793
Simmonscourt House Dublin 4 Huawei 653
Ground & 1st Floor, Haddington Two Dublin 4 Xsellco 589
Cranford House Dublin 4 Teneo PSG 577
KEY DEVELOPMENTS UNDERWAY/IN PIPELINE
PROPERTY LOCATION AREA (SQ.M) STATUS
Fibonacci Square (Part of former
AIB Bankcentre lands), Ballsbridge
Dublin 4 40,321 On Site
Hume House, Pembroke Road Dublin 4 21,929 Plans Submitted
Boland’s Quay Dublin 4 19,513 On Site
IPC House, 35-39 Shelbourne Road Dublin 4 6,283 On Site
20 Merrion Road Dublin 4 5,481 Plans Submitted
Carrisbrook House Dublin 4 4,645 Permission Granted
45 Mespil Road Dublin 4 4,407 On Site
No. 10 Pembroke Place Dublin 4 2,205 PC March 2019
Note: All references to sq.m are approximate / rounded, based on figures available from developers and letting agents as well
as relevant planning authorities.
Source: BNP Paribas Real Estate Research
Number
D U B L IN OF F ICE I NV ESTMENT MAR One Ballsbridge
KET ANALYS I S 2019 29Developers and
investors are
now recognising
Developers and investors are
the appeal of
now recognising the appeal of
Ballsbridge which looks set to be
home to the expansion of the Silicon
Ballsbridge which
Docks in the coming years.
looks set to be home
to the expansion of
the Silicon Docks in
the coming years.
Number One BallsbridgeS O U T H & W E S T S U B U R B S
S O U T H & W E S T S U B U R B S
S O U T H & W E S T S U B U R B S
Blackrock
& Dún Laoghaire
For the purposes of this report, Blackrock and Dún Laoghaire
have been identified as a distinct office submarket that is
The attractiveness of Blackrock separate to the wider South Suburbs area. Blackrock and Dún
Laoghaire are key urban centres in South Dublin with a broad
as an office location has been mix of office occupiers located in the area.
significantly boosted by ongoing
investment with Friends First Similar to Dublin 4, office stock in Blackrock and Dún
Laoghaire is varied from modern blocks to office parks and
redeveloping both Enterprise older buildings located generally along main thoroughfares
House and Trident House – both and access routes. While Blackrock and Dún Laoghaire are not
usually seen a major office location in Dublin, they remain
of which have now been fully let attractive to certain occupiers seeking to benefit from more
to Zurich
AIRPORT Life Assurance. competitive rental levels and ease of access.
PORTMARNOCK
Redevelopment is now becoming a key feature of this
NORTH
submarket thanks to its accessibility and proximity to core DUBLIN AIRPORT M1
COUNTY DUBLIN
CBD locations such as Dublin 4. One of the key developments M 50
under construction at present is the new 8,120 sq.m
Enterprise House in Blackrock, which is being redeveloped by BEAUMONT
D17 Friends First. The scheme is due for completion in Q3 2019
with a pre-let already in place with Zurich Life Assurance.
HOWTH
M 50
D9
BROOMSBRIDGE Enterprise House
D5 CASTLEKNOCK
N3
CLONTARF
D13 M 50
PHOENIX
D3 N4 PARK
D7
D1
IFSC
NORTH
DOCKS
KEY OCCUPIERS N7 CITY
CENTRE
D8
DUBLIN
PORT »» EVO Payments
BALLSBRIDGE DUBLIN
KEY TRANSPORT
INFRASTRUCTURE
D2
BAY
SOUTH »» Zurich Life Assurance RATHMINES
DOCKS
D4 »» Kraft Heinz Ireland TYMON
D6W PARK
All maps are for illustrative purposes only, not to scale.
D6
»» Permanent TSB
BLACKROCK
N81
»» Irish Rail
»» Irish Fisheries Board DÚN
LAOGHAIRE
BLACKROCK DUNDRUM »» Dublin Bus
D14 DUN »» MCD Productions
LAOGHAIRE »» DART
MARLAY DALKEY
»» Sodexo PARK
N11
FOXROCK
»» M50 Motorway / N11
SANDYFORD
M 50
CABINTEELY
»» Darta Fund Services
D16 SOUTH
STACKSTOWN
»» Aecom
LUAS RED LINE IRISH RAIL/DART LUAS GREEN LINE
COUNTY DUBLIN
M 50
38 39
DUBLIN / WICKLOW CARRICKMINES
MOUNTAINS
D U B L IN OF F ICE I NV ESTMENT MAR KET ANALYS I S 2019
D18B L A C K R O C K & D Ú N L A O G H A I R E
N O R T H S U B U R B S
N O R T H S U B U R B S
KEY CONTACTS
KATE RYAN KENNETH ROUSE KEITH O’NEILL
HEAD OF RESEARCH MANAGING DIRECTOR & EXECUTIVE DIRECTOR
HEAD OF INVESTMENT OFFICE AGENCY
KATE.RYAN@BNPPARIBAS.COM KENNETH.ROUSE@BNPPARIBAS.COM KEITH.ONEILL@BNPPARIBAS.COM
BNP Paribas Real Estate Paris office
REFERENCE TERMS
Total Return is the overall level of return derived from Yield Impact quantifies the impact on capital values
property. This can be split into income return - the money of a change in yields. If yields rise, capital values fall;
investors receive from rent (net of costs) – and capital conversely, if yields fall, capital values rise. A positive yield
growth – the change in the capital value of the property, impact of say 10% would indicate that yields had fallen
Income return might be compared to the dividend on a by such an amount as to increase capital values by 10%.
company’s share; capital growth could be compared to the Likewise, a negative yield impact of say 15% would show
DAMIEN MCCAFFREY MATTHEW VANSTON BOBBY LLOYD
DIRECTOR SURVEYOR DIRECTOR
change in price of the share. that a rise in yields had caused capital values to fall by 15%.
The rate of Income Return is the rent actually paid by a The Equivalent Yield is the rate at which the prospective INVESTMENT INVESTMENT LAND & DEVELOPMENT
tenant over 12 months, divided by the capital employed rental income over the entire length of a lease is DAMIEN.MCCAFFREY@BNPPARIBAS.COM MATTHEW.VANSTON@BNPPARIBAS.COM ROBERT.LLOYD@BNPPARIBAS.COM
in the property. The income measure is net of any revenue discounted to equate with the current capital value.
expenditure incurred by the landlord, including incentives.
Over-renting occurs when the open market rental value
Capital Growth is the change in the capital value of falls below the rent actually paid by the incumbent tenant.
a property over 12 months net of capital expenditure, A reversionary property is one where the open market
expressed as a percentage of the capital employed over rental value exceeds the rent paid; a rack-rented property
the year. is where the two are equal.
At BNP Paribas Real Estate our people With our international scope,
The Capital Value of a property is in the view of the valuer, Non-operating Investments are those properties work with you to build targeted expertise and on-the-ground
the price the property would achieve on the open market. bought, sold, under development or undergoing a major and integrated real estate solutions presence, you will find the
On a rack-rented or reversionary property capital growth refurbishment. Non-operating index base dates may differ 20 Merrion Road, Ballsbridge
for your every need: Property perfect partner that can ensure
is roughly equal to the product of rental growth and the as MSCI’s client confidentiality rules suppress data based Dublin 4, Ireland Development, Transaction, Consulting, the success of your real estate
yield impact. The capital value of a property is affected by on small or skewed samples. +353 1 661 1233 Valuation, Property Management and projects.
two factors, rental levels and yield levels. realestate.bnpparibas.ie Investment Management.
Standing Investments are a subset of the All Asset index
Rental Growth is the change in the level of rent that a dataset that is based on completed and lettable properties PSRA No: 002702
valuer estimates a property might achieve were it let only, often described as operating properties.
on the open market. If a valuer thinks that open market
DISCLAIMER: BNP Paribas Real Estate is a wholly owned subsidiary of the BNP Paribas Group, the leading global Financial Institution. All rights reserved. The report
rental values have risen from say €400 per sq.m to €500
was prepared by BNP Paribas Real Estate Ireland. All data provided in the publication have been carefully verified, however the authors of the report shall not be
per sq.m, rental value growth would be 25%, and capital held liable for any damage or loss which may arise from the use of the data published. Reproducing, modifying or using any of the contents hereof without the
values would increase by this amount, all other factors permission of the authors of the publication is prohibited under the provisions of the applicable law. It is permitted to quote the contents of the publication only
when clearly stating the source.
remaining the same.
46 D U B L IN OF F ICE I NV ESTMENT MAR KET ANALYS I S 2019 47You can also read
