Some of the most noteworthy construction & property stories from the last week, as compiled by the team at Construction Network Ireland.
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The major shift in Irish society from a nation of owner-occupiers to a nation of renters was underscored by quarterly ESRI statistics released by the Residential Tenancies Board this week that shows that 20% of Irish people now live in rented accomodation.
The statistics show that rental growth is slowing in Dublin, but only because many renters have reached the absolute limit of what they can pay. Annual growth in the first three-quarters of the year was 8.3% in Dublin, which is still high but lower than in previous periods.
Rental growth continues unabated outside of Dublin, with rents increasing by more than 9% in the year to the end of September. High rents nationwide is a major factor which is slowing down the rate at which Irish consumers are able to purchase homes.
When NAMA speculates publicly that a property market is in deep trouble it is worth while taking note, and perhaps selling off hastily if you are exposed to the market. Thankfully they aren’t saying that about Ireland anymore.
Yesterday Frank Daly, Chairman of NAMA, told Irish politicians that according to analysis carried out by NAMA, “the fall in U.K. prices may be much higher than official estimates… Analysts are forecasting that prices will fall further over the coming years, partly in response to a weakening economy and to the likelihood that companies will move staff overseas in response to Brexit.”
It’s estimated that property prices in central London are down 10% since the vote on Brexit, but Daly’s comments suggest that this may be understating the actual results on the ground.
NAMA (and by extension the Irish taxpayer) has an exposure of £800 million to UK property, but this is down from £12 billion in recent years.
The was bad news at the start of the week when Pfizer announced that it was shelving plans for a €400 million expansion to its Grange Castle plant in Dublin due to the poor performance of a drug for which there had been high hopes.
The expansion would have resulted in 350 permanent jobs and 1,250 construction jobs had it materialised, but poor early results for an anti-cholesterol drug it had in production led to the project being cancelled.
It can be hard to get onto the property ladder when you have to pay Dublin rents, but it looks like one of Ireland’s most high-profile renters – Google – is finally ready to settle down and commit to Dublin.
According to sources in contact with the Irish Times, the technology giant is looking to buy an office block in East Point where it currently rents another five buildings .
Google appears ready to hand over €10 million for ‘Block L’, a 40,000square foot office block. The firm currently rents five office blocks in the same park, ranging in size between 32,000 and 50,000 square feet.
The heat in the Dublin Hotel market shows no sign of dissipating anytime soon, but the news that the property which was home to the superpub Zanzibar looks set to double it’s guide price of €5 million on the back of its central location and planning permission for an 89 bedroom hotel, is still rather stunning.
According to reports in the Irish Independent there were in the region of 100 enquiries about the property on Ormond Quay in Dublin from parties in the US, UK, Europe and Asia.
Such tales are often overblown by sales agents, but given the sale price of €10 million and the current lack of supply in the hotel market in the capital, the estimate may be accurate.
It emerged this week that companies associated with Cerebus, a US vulture fund that has made a killing buying up distressed property assets in Ireland, has paid a little over €6,000 in tax on profits of more than €108 million in Ireland.
The Irish Times and Irish Independent revealed that Promontoria Ram, which bought distressed loans from Ulster Bank and UIster Bank Ireland paid just €2,168 tax on €19.5 million in profits that were generated in a six-month period from May to December last year.
It also found that Promontoria Chestnut paid tax of just €1,977 on profits of €11.5 million; and that Promotoria Eagle, which was set up to buy NAMA’s Project Eagle loans in Northern Ireland, paid just €1,900 tax on €77m in profits.
Promotoria Eagle was used to acquire €1.6 billion of NAMA’s Northern Ireland loans, a deal which the Comptroller and Auditor General estimates may have cost the taxpayer up to €200 million. NAMA strenuously denies the estimate.
Rumours abound in Cork that Facebook, or at least a Facebook-owned firm, is in negotiations to occupy the top floor of the €50 million John Cleary Developments (JCD) development on the site of the former Capitol Cinema in the city centre.
A subsidiary of Facebook Oculus VR, acquired a Cork startup InfiniLED recently – the talk around Cork seems to relate to a swanky new pad for the social networks new acquisition
Low housing stock looks set to result in further housing inflation in 2017 according to a panel of experts assembled by the Irish Times. The abbreviated read – ‘there does not seem to be any quick answer to the current housing crisis’.
President-elect of the US Donald Trump announced a name familiar to the Irish business community as his future Treasurer Secretary this week-Wilbur Ross, former shareholder of Bank of Ireland.
Ross invested in Bank of Ireland at a key time – many at the bank and in government believed that if he had not, the bank would have had to be nationalised. The canny septuagenarian invested however, saving Bank of Ireland while also more than tripling his money.
The billionaire is also known as the “Bankruptcy King” in the US, which may not be reassuring to the US public. Perhaps more worrying to the rest of the world is the announcement late last night that Trump is to appoint a retired US Marine Corps General known to colleagus as “Mad Dog” as his Defence Secretary.
We’ve talked a lot recently about the problems when the common man or woman put blind trust in a familiar figure they know from the television who is outspoken and believes their own hype…
Eddie Hobbs, the author of books with such understated titles as “LOOT!” and television shows called Rip-Off Republic, Show Me the Moneyand 30 Things to do with your SSIA founded Brendan Investments and when the fund stopped fundraising in 2008 it had raised €13 million from investors, many of them small investments of €5,000 or a little more.
Now it seems that the fund is to be wound up in the next year, having lost 90% of investors money.
The Irish Times reports that the outspoken Corkman resigned from Brendan Investments in 2015 when he cofounded the political party Renua, which also flopped, but retains 4.5% of the shares in the company.