Your 10 at 10 –
Some of the most noteworthy construction stories from the last week, as compiled by the team at Construction Network Ireland.
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Ratings agency Standard & Poors (S&P) launched a report into the Irish Housing Market this week which claimed that it may take a decade before supply meets demand, due to “crisis legacy issues”, particularly high levels of household debt eight years after the housing market hit rock bottom.
The report says that there will be a significant lag before recent government policy and private sector investment can have a significant effect on the housing market.
The report also estimates that housing inflation will hit 7% in 2017 and 5% in 2018, mostly due to the relaxation in Central Bank lending rules.
Tenders are out for a large development in the grounds of Dublin Airport which is due to commence this summer.
The Dublin Airport Authority (DAA) has received planning permission for the development of four large office blocks and a new car park which will be situated adjacent to Dublin Airport’s Terminal 2 and the new 402 bedroom hotel which is to be built on the site.
The construction of the new business park, Dublin Airport Central Development, will total 42,000 square metres and is one of many significant developments happening on the Dublin Airport Campus.
Another week, another Daft report showing rents rising at new, unprecedented rates. Like climbing Kilimanjaro, every time you think you’ve reached the peak,over the horizon comes an even greater height.
The figures from Daft.ie’s quarterly rental report showed that the cost of renting a home is at the highest level ever in the state, and is rising at the fastest rate since it began reporting in 2002.
Based on the report, rents went up 13.5% in the final quarter of 2016 nationwide and 14.5% in Dublin. The rates in Dublin are also 13.7% higher than they were during the previous height of the rental market, back in pre-bust 2008.
Rents in Limerick, Cork and Galway were up 12.5%, 12% and 10% respectively in the same period.
On a brighter note, the Ulster Bank Construction Purchasing Managers Index showed an increase in new constructions jobs at one of the fastest rates since the monthly survey began in 2001.
A total of 27% of firms reported that they would increase their staffing numbers in January’s report. Good news – but the report also cautions that inputs to the cost of building was increasing at its quickest rate in a decade.
Park Development Group is adding to it’s Carrickmines campus ‘The Park’, with the first major development on the site to commence shortly.
‘The Hampstead Building’, is a €24 million, 60,000 sq ft office development that will join the existing Iveagh, Hyde & Herbert buildings at the Dublin 18 site located close o the M50 and the LUAS green line.
Savills is the rental agent and is expected to have tenant(s) signed up by year end. The campus is already home to major businesses including Vodafone & Getty Images.
Revenue and profits are up at building materials company Kingspan, with revenue hitting €3.1 billion, an increase of 12%, and trading profits rising by 33%, totalling a whopping €340.9 million.
The company is based in Cavan but is becoming a truly international business, with operations in North America, Britain and continental Europe.
Another company which did fantastically well in 2016 was IRES Reit. The publicly quoted, foreign-backed landlord (Canadian firm Capreit is the largest investor) saw net rental income up by 50% to €30.6 million and pre-tax profits up by 53% to €47 million.
In 2016 the average monthly rental income increased by 8.6% and occupancy was almost 99%.
IRES Reit is the largest home owner in Ireland, with 2,400 properties on it’s books. Revenues are set to increase again this year with rental hikes expected at many of the companies properties.
It is not all going IRES Reit’s way however – planners in Dun Laoighre-Rathdown County Council have knocked back plans for a high density development at a site it had purchased from NAMA in 215 for €87.5 million.
IRES had submitted planning permission for three 14 story blocks of apartments along with several commercial units at the Rockbrook site, but planners have rejected them as ‘monolithic’ and ‘overbearing’.
It is believed that IRES is in the process of resubmitting a new proposal – surely Councils in Dublin will eventually realise that if the housing crisis is to be addressed then provision must be made for well designed, well run, high density developments?
The development at Capital Docks – particularly the 79 storey building which is to be Ireland’s highest building when it is completed – is getting a lot of coverage this week, including this piece from RTE news. Definitely worth a watch.
A report from the European Commission this week predicts GDP growth in Ireland of 3.4% for 2017 and 3.3% for 2018, double the EU average of 1.6% for the same period.
The report highlights domestic drivers, particularly the housing market, as the main driver of growth during that period.
“Residential property is expected to remain the main driver of investment, supported by government policies,” it said.
There is a cautionary edge to the report, with concerns that international factors risk destabilising the market in Ireland in the longer term.
We can’t think of where we’ve heard of such a scenario before – a small, open economy where the domestic market was driven by house prices, ultimately derailed by global instability and poor governance – but it certainly sounds familiar.
Answers on a postcard to the usual address…