PROP­ERTY: DUBLIN’S DRAW

Long re­puted as a small city with big city charm, will Dublin’s low cor­po­ra­tion tax, con­nec­tions with Europe, youth­ful pop­u­la­tion and abun­dant per­son­al­ity see it be­come a new cre­ative and tech hub al­ter­na­tive to Lon­don?

The Peak (Hong Kong) - - Contents - STORY KATIE PISA

Long re­puted as a small city with big city charm, Dublin’s low cor­po­ra­tion tax, con­nec­tions with Europe, youth­ful pop­u­la­tion and abun­dant per­son­al­ity might see it be­come a cre­ative and tech hub al­ter­na­tive to Lon­don

Dublin is known for be­ing a small but cos­mopoli­tan me­trop­o­lis, burst­ing with his­tory dat­ing back to the ninth cen­tury. Fa­mous for its lively pubs serv­ing pints of Guin­ness, a look be­yond the clichés re­veals a city rich in cul­ture, packed full of mu­se­ums, gal­leries, me­dieval cas­tles and breath­tak­ing cathe­drals; all made the more charm­ing by an out­go­ing and friendly lo­cal pop­u­la­tion.

The Ir­ish cap­i­tal is neatly di­vided by the River Lif­fey and beau­ti­fully set near the sea­side – per­haps a source of in­spi­ra­tion for Sa­muel Beck­ett, Wil­liam Yeats and Os­car Wilde, to name a few lit­er­ary greats who have called Dublin home.

While the south­ern parts of the city have tra­di­tion­ally en­ter­tained the more ex­clu­sive end of the prop­erty mar­ket, ex­em­pli­fied by at­trac­tive Ge­or­gian town­houses, the north­ern reaches of Dublin, tra­di­tion­ally viewed as more working class, are now com­ing up roses for both buy­ers and in­vestors alike.

THE THREE T’S

How­ever, it was just a decade ago when Dublin was mak­ing the head­lines for all the wrong rea­sons. The epochal fi­nan­cial cri­sis of 2008 sent prop­erty prices plum­met­ing, leav­ing the mar­ket to col­lapse and many prop­erty own­ers left in neg­a­tive eq­uity.

Since that time a re­cov­ery of sorts has started, with Dublin named as the fastest grow­ing econ­omy in Europe for a third year in a row in 2016, ac­cord­ing to es­tate agent Knight Frank. The agent states that Dublin’s suc­cess can be at­trib­uted to the “three T’s” – tech­nol­ogy, tal­ent and tax.

The tech in­dus­try is driv­ing Dublin’s com­mer­cial growth and boost­ing the city’s strong­hold as an in­ter­na­tional hub for other sec­tors in­clud­ing fi­nan­cial ser­vices, aircraft leas­ing and me­dia, says John Ring, an in­vest­ment an­a­lyst at Knight Frank Dublin.

Many in­ter­na­tional tech com­pa­nies in­clud­ing Google, Face­book, Linkedin and Twit­ter have re­lo­cated their Euro­pean head­quar­ters to Dublin – re­sult­ing in the area around Grand Canal Dock to be­come known as Sil­i­con Docks.

“With 40 per cent of the pop­u­la­tion un­der 29 years old, Dublin also of­fers ac­cess to a young, vi­brant and welle­d­u­cated pool of tal­ent,” says Ring.

“Dublin has a youth­ful vibe and there’s money now too,” ex­plains Althaea Fed­er­lein, chief com­mer­cial of­fi­cer of Iconic Of­fices in Dublin, a

com­pany that pro­vides be­spoke of­fices for co-working, and en­cour­ages com­mu­nity build­ing for en­trepreneurs around the city. Some of her big­gest clients in­clude those working in tech, but also many Amer­i­cans who favour Dublin’s ac­cess to Europe with no lan­guage bar­ri­ers.

An in­di­ca­tor of Dublin’s boom, Iconic Of­fices has grown from three em­ploy­ees to 40 in the past twoand-a-half years. The com­pany is adding 160,000 sq ft of of­fice space this year, Fed­er­lein says.

“Now it’s 25 to 35-year-olds who have a lot of dis­pos­able in­come, and Dublin is re­act­ing to that,” says Fed­er­lein. “There are a lot more art shows, gallery open­ings, a cool lit­tle al­ter­na­tive scene. There are so many great things about liv­ing here.”

An­other in­cen­tive for com­pa­nies to move to Dublin is the low cor­po­ra­tion tax of 12.5 per cent, one of the low­est by in­ter­na­tional stan­dards.

This has boosted de­mand for com­mer­cial rental space. Ac­cord­ing to Knight Frank, the city has seen prime rents rise from a trough of US$36.25 per sq ft in 2011 to US$61 per sq ft at time of writ­ing.

The de­mand for new of­fice spa­ces is high, notes John Mccart­ney, di­rec­tor of re­search for Sav­ills Dublin. “For the first time, [Dublin] is de­mol­ish­ing old to make way for new,” he says, re­fer­ring to Ire­land’s rapid growth in em­ploy­ment of 3.5 per cent per an­num in 2016 – a num­ber that is even higher in Dublin.

Ac­cord­ing to Mccart­ney, the city cen­tre boom can be at­trib­uted to the nat­u­ral pop­u­la­tion growth com­bined with an in­flux of immigration from abroad. Park­ing lots are be­ing turned into com­mer­cial spa­ces as peo­ple in­creas­ingly take pub­lic trans­porta­tion into the city, a re­sult of to the de­vel­op­ment of Dublin’s in­fra­struc­ture to ac­com­mo­date the cur­rent growth and de­mand.

This trans­lates well for the res­i­den­tial mar­ket in Dublin too.

MANY IN­TER­NA­TIONAL TECH COM­PA­NIES IN­CLUD­ING GOOGLE, FACE­BOOK, LINKEDIN AND TWIT­TER HAVE RE­LO­CATED THEIR EURO­PEAN HEAD­QUAR­TERS TO DUBLIN – RE­SULT­ING IN THE AREA AROUND GRAND CANAL DOCK TO BE­COME KNOWN AS SIL­I­CON DOCKS

“One third of all res­i­den­tial trans­ac­tions in the last three years have been from in­vestors. Money has flown into the sec­tor,” says Mccart­ney. “The re­turns are pretty clear, and the risks are low as there has been an un­der­sup­ply [of prop­erty] for the next two to three years,” he adds.

“From an in­vestor’s point of view, the risks are not re­ally there,” Mccart­ney con­tin­ues. Of Dublin’s four dif­fer­ent coun­cil dis­tricts, the res­i­den­tial yield on a bank­ing de­posit is 4 to 5 per cent, he adds.

POP­U­LAR SPOTS

The Dock­lands, or the Sil­i­con Docks, is def­i­nitely buzzing. It’s home to young, well-off pro­fes­sion­als working in tech com­pa­nies in­clud­ing Google, Face­book, Twit­ter and oth­ers.

“An im­proved in­fra­struc­ture with good trans­port links and ameni­ties as well as wa­ter­front op­tions has seen an in­crease in de­mand from first time buy­ers, ex­pats and in­vestors buy­ing in Dublin’s Dock­lands,” notes Rena O’kelly, di­rec­tor of res­i­den­tial sales for Knight Frank.

This group prefers be­ing at the cen­tre of the city in­stead of mov­ing out to the sub­urbs. “They are em­brac­ing this ur­ban style as a way of life,” says O’kelly.

Two re­cent sales – No. 26 Gallery Quay (three-bed­room/1,224 sq ft), which sold for €1.3m (HK$11.31M) and 51 Grand Canal Wharf (twobed­room/732 sq ft), which sold

for €450,000, also show that the de­mand is at both ends of the scale.

The pretty and stately red brick ar­eas of South Dublin City and its high-end res­i­den­tial ar­eas of Balls­bridge, Rath­gar and Dartry con­tinue to see strong de­mand in the wealthy post­codes of Dublin 4 and D6, says O’kelly.

D2, D4 and D6 (Ranelagh) are al­ways pop­u­lar, Fed­er­lein agrees.

These ar­eas have tra­di­tion­ally al­ways been at­trac­tive to well-off Dublin­ers. Now, as many Ir­ish who were liv­ing abroad – par­tic­u­larly in Lon­don – move back, D2, D4 and D6 are fre­quently the ar­eas they aim to live in. The at­trac­tive­ness and pop­u­lar­ity of these ar­eas has pushed prices up in bid­ding wars, O’kelly says.

South Dublin, home to many of the city’s rich and fa­mous – from U2’s Bono to rac­ing driv­ers Ed­die Irvine and Da­mon Hill – re­mains pop­u­lar, as it com­prises the Dalkey and Killiney ar­eas, with their strik­ing head­lands climb­ing dra­mat­i­cally from the sea.

Of­ten re­ferred to as the Ir­ish Riviera, South County Dublin of­fers some of the swanki­est and largest res­i­den­tial prop­er­ties with a more se­cluded way of liv­ing.

Knight Frank is cur­rently mar­ket­ing the sale of Gorse Hill on Vico Road. Sit­ting on two acres, the 10,200-sq-ft res­i­dence en­joys stun­ning views from Sor­rento Ter­race and Killiney Beach and Bay and is priced at €8.5m at time of writ­ing.

But all over the city, there’s an en­ergy and buzz.

“It’s great liv­ing here. Rents are a bit punchy, but the qual­ity of life here is very good,” Iconic Of­fices’ Fed­er­lein notes. “We’re close to the sea, it’s easy to get around, it’s a

AC­CORD­ING TO KNIGHT FRANK, THE CITY HAS SEEN PRIME RENTS RISE FROM A TROUGH OF US$36.25 PER SQUARE FOOT IN 2011 TO US$61 PER SQUARE FOOT IN 2017

friendly city and it’s a fun city.”

Dublin has un­der­gone dras­tic changes in the last 10 to 15 years, she says, some­thing ev­i­denced by the in­flux of top-notch restau­rants and cafes pop­ping up all around town.

“The cof­fee cul­ture is in­sane,” she says. “It’s not just Star­bucks. Dublin has these lit­tle be­spoke cof­fee shops that roast their own beans … it’s a great lit­tle city. Peo­ple are open to do­ing busi­ness and un­der­stand dif­fer­ent cul­tures. Greater Dublin has just un­der two mil­lion peo­ple, but it punches well above its weight.”

WHO IS IN­VEST­ING?

Pri­vate eq­uity in­vestors – mainly from the United States – were among the first to sweep into Dublin.

“With the mar­ket now con­sid­er­ably de-risked, pen­sion funds, pri­mar­ily from Europe and Canada, and sov­er­eign wealth funds from Asia, are ac­count­ing for the next wave of cap­i­tal in the ex­pec­ta­tion that Dublin will con­tinue to de­liver su­pe­rior riskad­justed re­turns over the com­ing years,” says Knight Frank’s Ring.

Prop­erty prices in Dublin in­creased by 3.7 per cent in 2016,

SOUTH DUBLIN, HOME TO MANY OF THE CITY’S RICH AND FA­MOUS – FROM U2’S BONO TO RAC­ING DRIV­ERS ED­DIE IRVINE AND DA­MON HILL – RE­MAINS POP­U­LAR

com­pared to 1.4 per cent in 2015, ac­cord­ing to lo­cal es­tate agency Sherry Fitzger­ald.

“Con­tin­ued growth in domestic de­mand, com­bined with an ever im­prov­ing labour mar­ket, sees the Ir­ish econ­omy poised for an­other strong per­for­mance in 2017,” Fitzger­ald states.

The new homes mar­ket is boom­ing in Dublin too, ac­cord­ing to the firm.

Dublin saw sig­nif­i­cant growth dur­ing the year, mak­ing up 38 per cent of to­tal new dwelling sales in Ire­land so far. Fitzger­ald notes that first-time buy­ers make up the lion’s share of these sales, spurred on by the gov­ern­ment’s in­cen­tive to help this group by eas­ing bor­row­ing re­stric­tions.

BREXIT’S IM­PACT

Un­doubt­edly there is a lot of un­cer­tainty in Dublin due to the UK’S im­pend­ing de­par­ture from the EU, says Mccart­ney.

As the UK leaves the sin­gle mar­ket, “ad­versely af­fect­ing trade re­la­tions, mi­gra­tion and the po­lit­i­cal land­scape be­tween Ire­land and the UK, the true longterm im­pli­ca­tions of Brexit on the Ir­ish econ­omy are not yet fully vis­i­ble,” warns Fitzger­ald.

Many com­pa­nies have al­ready an­nounced they will be mov­ing em­ploy­ees from Lon­don to Dublin – JP Mor­gan, for one – and oth­ers are likely to follow, says Mccart­ney.

A re­cent study by the Cen­tral Bank and the So­ci­ety of Char­tered Sur­vey­ors Ire­land found es­tate agents have forecast Dublin house prices to rise by 8 per cent in 2017. With new de­vel­op­ments be­ing a fo­cus for the gov­ern­ment to meet the lack of sup­ply, Dublin looks set to keep its growth go­ing.

De­spite what­ever un­cer­tainty there may be in the mar­ket as Brexit gets un­der­way, Dublin looks set to en­joy a con­tin­u­ing boom.

OP­PO­SITE South Point com­bines lux­u­ri­ous fur­nish­ing with a wacky de­sign aes­thetic.

ABOVE The Brick­house is equipped with flex­i­ble cowork­ing spa­ces for one to 350 mem­bers.

THIS SPREAD The in­te­rior of The Wilde reads more like a pri­vate lux­ury res­i­dence than co-working space.

OP­PO­SITE Gorse Hill sits on two acres and en­joys stun­ning views from Sor­rento Ter­race and Killiney Beach and Bay.

ABOVE Rock Lodge House is lo­cated in South Dublin, home to many of the city's rich and fa­mous.

LEFT A five-bed­room house on Raglan Road in Dublin 4.

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