The Difference 2017 Outlook Welcome the Difference 17 Contents
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2016 REVIEW & 2017THE DIFFERENCE 2017 OUTLOOK WELCOME THE DIFFERENCE 17 CONTENTS 04 2017 View (If video doesn’t play click here) 06 Residential Our View 2016 saw a change at the helm of Lisney with James either buyers or sellers in Projects Emerald & Ruby, Our team in Belfast continues to perform well, in a market Land & New Homes Nugent becoming Executive Chairman, following four Project Gem, Project Pluto and Project Oyster. with real challenges ahead with BREXIT looming. They 13 years as Managing Director. I would like to thank him completed the largest investment deal of the year in for guiding us safely out of the recession and handing In the residential market, we sold 30% more houses Northern Ireland at Bloomfield Shopping Centre in Bangor over a firm in good shape. for over €1m in 2016 than 2015. We are pleased to be for £54m; where they advised Ellandi and Tristan. 20 Investment opening a new residential branch on the Howth Road on The environment in which we operate saw Dublin’s northside in January 2017. A reorganisation of our business in 2016 has brought major political events including the election of our property management business into the advisory 27 Loan Sales a minority Irish government in February and the Residential lettings have been in the news of late group and we are starting to see the benefits with some UK’s momentous decision to leave the EU in June. as rents have continued to grow at close to 10% per significant new instructions. These included a number of As the year drew towards a close, the US elected annum in 2016. Our teams based in Dublin and Cork are buildings at Deansgrange Business Park recently being Offices Donald Trump as its next president. In light of such providing a premium service and achieving excellent added to the management book. 29 major change, it is surprising that the market kept results for our clients; notably at the Elysian in Cork and functioning as well as it did. Shieling Square in Dublin. 2016 saw us say goodbye to Cushman & Wakefield as a partner. Lisney has been, and will continue to be, a proud- 34 Industrial The changes to tax treatment of some corporate As 2016 drew to a close, legislation to control rental ly independent Irish company owned and run by a group of structures made following Budget 2017 were not a increases was passed. The new controls will limit professionals who put their clients first without question. welcome development for the market. rental increases to 4% per year; or 12% over three 40 Retail years in designated ‘rent pressure zones’. It has Our future is in focus and we were delighted to have Rents grew in all sectors as economic growth in been implemented immediately in the four Dublin Aoife Brennan, our head of research, join the Board. This Ireland outstripped our European neighbours. local authority areas and in Cork city. This will have move promotes one of our brightest and commits senior 46 Cork consequences for the investment market but also, more resources to expand a team that has and will provide Investors continued to buy commercial investments worryingly, for the supply of new rental stock. our clients with the best information and analysis in the with the second highest level of investment turnover market. Northern Ireland ever recorded, witnessed in 2016; at close to €4.5bn. Our new homes team sold out another scheme in 57 We had our share of success in this market with Dundrum in 2016 and is shortly due to launch a new Ann Hargaden has decided to retire from the Board. She significant sales for Blackstone in Central Quay for scheme of high quality houses at Broadlands in Killiney. joined the firm over 30 years ago and we’re delighted over €50m and for a NAMA appointed Receiver in St We also successfully launched a scheme of 27 beautiful that she will continue to work with us as a consultant 63 Lis-news Edmund’s, Liffey Valley for over €35m. apartments in a former convent building in Blackrock, and bring her many great qualities to bear for many more Cork. We have built a high quality new homes team from years. Other highlights for Lisney included handling the scratch in recent years and are looking forward to taking 66 Meet the Team sale of the Central Bank building on College Green a significant market share in the coming years. As always the world we operate in changes and we are and acting on behalf of IKEA on its new store in The determined to be on top of the markets we operate in and Park in Carrickmines. Our industrial team cemented In Cork, we had some great results for clients including provide our clients with the right advice. 68 Office Details their place at the front of their market advising selling a long term ground lease on a 6 acre development the buyer of a significant industrial portfolio called site for CIE at Kent Station. The site will be developed in We look forward to working with you in 2017 and beyond. Project Ore. Our development land team had some to a significant mixed use scheme in the heart Cork City. very successful sales including the 2ha seafront site known as Roslyn Park in Sandymount. One of strongest divisions is our advisory team, which has expanded its offering to support many REITs, QIAIFs Duncan Lyster We continued to be a leader in advising on the real and ICAVs. We continue to provide high quality secured Managing Director estate aspects of the loan-sale market; advising lending, lease advisory and expert witness work. January 2017 VIEW 2017 DEVELOPMENT/ A VIEW ON 2017 NEW HOMES The development land market continued to perform well in 2016, with a relatively strong volume of sales achieved. The supply of new homes remained suppressed during 2016, in spite of strong demand and positive economic fundamentals. In the latter part of 2016, there were positive signs that the supply of new residential property was gaining momentum, with a number of developers commencing on-site. This momentum will gather pace in 2017, with a number of large RESIDENTIAL multi-phase developments due to get underway. Demand will The Dublin residential market stabilised somewhat be buoyant for residential sites in 2017, particularly those in 2016 as both buyers and sellers had to align that are suitable for starter homes. expectations in order to close a sale. The Lisney index of prices grew by 3.8% in 2016. The opening and closing quarters of the year saw the greatest growth at 1.4% each. Price growth in 2017 will be moderate with INDUSTRIAL CORK our models suggesting between 4% and 5%. The strong activity over the previous two years Demand for prime investment assets in the Cork region in the industrial market continued into 2016. will remain strong. Construction will commence on new Sales activity did drop in 2016, due to the office schemes in 2017, however no new speculative scarcity of stock but also due to the number of development is anticipated in the retail or industrial OFFICES owners that have purchased buildings under sectors. In the residential market, construction is the Capital Gains Tax holiday. This will continue expected to start on a number of schemes in the Unlike many other parts of the economy, Brexit should to limit the number of properties coming to the suburbs and satellite towns to meet growing demand. have a positive impact on the Dublin office market in 2017. market for sale up to 2020. There will be increased activity from companies looking to relocate from London and elsewhere in the UK as a result. This is likely to culminate in various deals being NORTHERN agreed towards the end of 2017. New office construction will continue to be one of the main talking points of the IRELAND year. In terms of what was under construction at the end of 2016, the figure reaches almost 320,000 sqm in the The Northern Ireland property market in 2017 will entire Dublin region. experience similar challenges to those of 2016. The uncertainty that Brexit has brought to the capital markets will take time to play out. The lack of available properties, particularly larger buildings, will remain a INVESTMENT concern in the office and industrial markets. Prime Zone A rents will increase during the year. Entering 2017, the investment market has the RETAIL least certain outlook since the depths of the Vacancy rates in Dublin and in prime retail locations downturn. This is mainly due to the immense nationwide have reached extremely low levels. With volume of property that has transacted since little or no new construction underway, expansion 2012. In spite of this, we expect to see private LOAN SALES opportunities in key areas will be difficult for the investors and investment funds continue to buy While not as busy as recent years, the loan sale foreseeable future. There is an increasing variance in property as an income generating, real asset. market was active in 2016. Yet again, NAMA the level of rents that different types of retailers can There are still good opportunities in major was a very busy player in the market. Apart pay. Restaurants and food operators have been the Irish towns and cities at prices well below from NAMA, Danske Bank and RBS (Ulster driving force behind the increase in rents. replacement cost. Bank) were also sellers during 2016. 00404 | /LISNEY LISNEY REPORT ANNUAL REVIEW LISNEY ANNUALLISNEY REVIEW REPORT / |005 05 RESIDENTIAL 01 RESIDENTIAL SALES of €20,000 can occur.