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Archive for January 3rd, 2012

Back in October 2011 there was a report of a solitary squatter occupying property in Tullamore which the Irish Independent claimed was in NAMA. The NAMA link was tenuous but it was interesting that a judge in Tullamore District Court allowed the squatter to remain in the property, when it became apparent that no damage was being done to the vacant house on the Church Hill Demesne estate in the town; indeed, according to the squatter several improvements had been made. The estate has not appeared on the NAMA foreclosure list and the developer of the estatr had not previously been associated with NAMA, and the view on here was that it was probably not a NAMA development at all.

Yesterday, a group – difficult to know how you would characterise them, squatters or protesters – gained access to an office building in Corkcity centre, Stapleton House on Oliver Plunkett Street. There is a blog which is apparently associated with the group and describes the occupation. Apparently the group was provided with keys and undisclosed other “details” and are now in situ in the building which is pictured below. Confusingly, it has a Bowen banner on display, and Bowen is a company that is in NAMA, but it seems that the building is owned by a completely unrelated company, Padlake Limited.

It’s a 25,000 sq ft six-storey modern retail/office building in central Cork, close to the quays. It was apparently empty, though estate agent Sherry FitzGerald is advertising the property to rent on DAFT. What would it fetch if fully rented? Probably around €400,000 per annum or about €1,000 per day would be the estimate here – Sherry FitzGerald reported last April 2011 that “third generation Cork city centre” offices were commanding €230-270 per sq metre (€22-26 psf). The building was developed by Padlake Limited which is associated with developer Joe O’Donovan. A cinema site in Kent was reportedly sold last year by property receivers appointed to Joe’s company, Rydell Properties Limited, acting for NAMA which seems good enough evidence to suggest that Joe is in NAMA. Apparently NAMA is not commenting on whether or not this specific building in Cork city is subject to a NAMA loan but NAMA says that in the first instance, it would be the developer or receiver who was responsible for the security of their property. The property is not apparently on the NAMA foreclosure list, so if it is a building subject to a NAMA loan, then it would seem it is Joe O’Donovan’s responsibility to ensure it is secured. I have not been able to check to see if NAMA has registered any charge against the building at the Land Registry as it has done with a range of Irish property over the past year.

The O’Donovans – Howard and Joe – are probably best known for the development of the Wilton shopping centre in Cork.

The protesters/squatters are understood to be planning to use the currently empty building for “the empowerment and enlivening of the communities of Cork” This type of action might become more commonplace in a country in economic turmoil, with over 300,000 unemployed and almost 450,000 on the Live Register and where there is a surfeit of vacant property, both residential and commercial. Most protests inIrelandat present are small and low-key but you can’t help but notice what appears to be an increasing incidence of the word “protest” in news reporting.

UPDATE: 25th January, 2012. There have been a couple of developments in this story. Padlake Limited, the company that had owned the office/retail development at Oliver Plunkett Street had been struck off at the Company Registration Office. But it was restored last week on 19th January 2012 when according to the CRO the company submitted outstanding returns and late filing fees (see the company record extract below) The second development is the apparent legal action initiated by Padlake Limited against the occupiers. There is no record yet of the application on the Court Service system, however it is understood the application was made on 20th January 2012.  The owner of Padlake Limited, Joe O’Donovan is a NAMA developer though it remains unclear if this property is subject to a NAMA loan, but that is certainly a suggestion from press reporting. The question for NAMA is if this IS a company with NAMA loans, why was it allowed to remain dissolved, a status which would have prevented it taking legal action to protect its property rights. NAMA had no comment on the matter.


UPDATE: 30th January, 2012. The apparent owner of the building, Padlake Limited, has obtained an injunction today at Cork Circuit Court which effectively evicts the protesters. The judge refused permission to protesters to allow the landlord’s application to the courts to go to a full trial. The landlord claimed that a padlock had been broken to gain access to the building. A director of the landlord, Barry Doyle said that he had gone to the building in the company of Gardai on 3rd January to seek to have the protesters leave.  It remains unclear if the building is subject to a NAMA loan, though it does seem the building was bought in 2006 by Padlake Limited with a loan from Anglo.

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As we now have the usual quarterly troika of Irish residential property price surveys from DAFT.ie, Myhome.ie and Sherry FitzGerald (not on the website yet, I am working from a press release), this entry is a roundup to see what the surveys are telling us. Here’s the overview.

(1)  At a national level, prices dropped 2-8% in quarter four of 2011 and 13-18% in the last year and are now 43-60% down from peak.

(2) InDublin, prices dropped 3-11% in quarter four and 15-24% in the last year and are now 50-64% down from peak.

(3) DAFT.ie and Myhome.ie both provide 26-county-by-county results.

(3a) DAFT.ie says that for Q4, 2011, Meath recorded the biggest decline with prices dropping 15.9%. On the other hand, prices in Donegal rose by 0.6% in the quarter.

(3b) Myhome.ie says that for Q4, 2011, Leitrim recorded the biggest decline at 8.3% whilst Offaly has recorded the biggest annual decline at 28%. On the other hand prices in Cavan rose by 2.7% in the quarter and at minus 2.6%, have recorded the smallest decline in the past 12 months.

In terms of how the different sources compile their statistics this is what each has to say.

(1) DAFT.ie : Its index is based on properties advertised on Daft.ie for a given period. The national average is built up from Census weights per county, in effect ensuring the average reflects where people live, not any variations from that that may exist in Daft’s market share. The regressions used are hedonic price regressions, accounting for all available and measurable attributes of properties and only coefficients with a very high degree of statistical significance (p < 0.001) are used. The average monthly sample size for sales during 2009 was over 10,000. Indices are based on standard methods, holding the mix of characteristics constant, with the annual average of 2007 used as the base. A working paper on the methodologies employed in both rental and sales markets will be published on the Daft.ie website soon. Stock and flow statistics are calculated using consistent series for the period covered. The change to the national average price is built up from Census weights per county, in effect ensuring the average reflects where people live, not any variations from that that may exist in Daft’s market share.

(2) Myhome.ie : Its index is based on actual asking prices of properties advertised on MyHome.ie with comparisons by quarter over the last six years. This represents the majority of properties for sale inIreland from leading estate agents nationwide.  The series in this report have been produced using a combination of statistical techniques. Their data is collected from quarterly snapshots of active, available properties on MyHome.ie. Their main National andDublin indices have been constructed with a widely-used regression technique which adjusts for change in the mixture of properties for sale in each quarter. Since the supply of property in each quarter has a different combination of types, sizes and locations, the real trends in property prices are easily obscured. Their method is designed to reflect price change independent of this variation in mix.

(3) Sherry FitzGerald : Its index is based on the analysis of a basket of properties in its locations nationwide.  Commencing in 1996 in theDublin market, it was extended nationwide in 1999. Each basket of properties was chosen based on a weighted profile of properties in each location.  The basket extends to over 1,500 properties, which are re-valued on a monthly basis forDublin properties and a quarterly basis for nationwide properties with results produced quarterly. The basket is held constant and re-valued based on market evidence.  Sherry FitzGerald through its franchise network is represented in every major city, town andcountyinIreland.

So two of the above are asking price indices and the Sherry FitzGerald index is a valuation assessment index (akin to how SCS/IPD and JLL compile the commercial property indices as far as I can see)

In addition to the above surveys, Ireland has two actual sale price series, one from the Department of the Environment Housing and Local Government which is an atrociously crude average of mortgage transactions and is issued six months after the event; the other is from the CSO and is issued monthly and is an hedonic index but only based on mortgages at eight Irish lending institutions. The bill giving legislative effect to House Price Database  – called the Property Services (Regulation) Bill – has now been approved and should see a Database available from mid-2012 which will have historical prices from 2010.

In terms of outlook for property prices, who knows? This blog’s predictions for 2012 are here. These are the latest predictions/projects captured on here which I believe to be a comprehensive reflection of reported predictions and projections, though if you feel there is any omission, please contact me so that I can update the table; house price projections in Ireland can be a vexed subject!

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