Dublin - Significant reduction in rents coming?

GocRh · 31-08-2020 9:35am

DubCount wrote: »

Spanish Flu in 1918 ?

I think a little something called World War 1 was far more damaging than the 1918 flu! It's even hard to get accurate statistics for the true impact of the 1918 flu, the world was in the midst of an armed conflict

I'll change my question - any worldwide pandemic during peacetime?

GocRh · 31-08-2020 9:39am

imme wrote: »

Air b n b
Foreign students coming to Dublin to 'learn English'
Neverending HAP

These are the major factors in rent increase in the last 10 years.

Solve these problems and you can see a normal rental sector.

Tourists are gone for the foreseeable future.

I wonder if immigration will start to impose restrictions on number of language 'students'? Plenty of Irish and Europeans will be looking for work...

I don't see HAP going away but I do see cuts which might also contribute to bring rental prices down.

DubCount · 31-08-2020 4:24pm

GocRh wrote: »

I think a little something called World War 1 was far more damaging than the 1918 flu! It's even hard to get accurate statistics for the true impact of the 1918 flu, the world was in the midst of an armed conflict

I'll change my question - any worldwide pandemic during peacetime?

There have been lots of pandemics and dangerous diseases in the last 100 years. TB, Smallpox, Cholera, Measles, Malaria, Yellow Fever.... Asian Flu in the late 50s killed 2 million people.

The_Conductor · 31-08-2020 4:25pm

DubCount wrote: »

There have been lots of pandemics and dangerous diseases in the last 100 years. TB, Smallpox, Cholera, Measles, Malaria, Yellow Fever.... Asian Flu in the late 50s killed 2 million people.

TB still kills between 3-4 million a year- and is resurgent globally.

The Student · 01-09-2020 8:25am

beauf wrote: »

I'm expecting the 80s again.

But also I know many offices are being set up for a return to work, alternative days in the office, plastic screens everywhere and one way systems in stairs and on floors, also distancing protocols in toilets shared area etc.

There will also be an issue of two sets of IT equipment. Hot desks are to be on cycle of one day in use next day deep cleaned.

I can see that people home office's will come under scrutiny if going to WFH on a longer or permanent basis.

I have to agree with you on this. Offices are indeed being set up for return to work but on an on/off basis. I suspect hot desks would be one week on one week off with a deep clean over the weekends rather than each day (simply to save costs).

Employers are responsible for your work environment when working from home. Alot of companies did not have protocols or policies in place for working from home.

I think we are in for very steep Govt spending reductions and increased taxes (despite what we are being told by the Govt).

I can recall Charlie Haughey's speech on RTE from "Reeling in the years" where he said we are "living way beyond our means".

I personally can see some very difficult times ahead for Ireland as a result of Covid (both economically, socially and from a mental health perspective) and also from Brexit (which I suspect will impact on us more than any other country in Europe).

Smouse156 · 01-09-2020 8:58pm

Office rents may fall as occupiers renegotiate terms and seek sublets
https://www.independent.ie/business/commercial-property/office-rents-may-fall-as-occupiers-renegotiate-terms-and-seek-sublets-39494911.html

The REITS won’t like this!

Assetbacked · 01-09-2020 9:21pm

Smouse156 wrote: »

Office rents may fall as occupiers renegotiate terms and seek sublets
https://www.independent.ie/business/commercial-property/office-rents-may-fall-as-occupiers-renegotiate-terms-and-seek-sublets-39494911.html

The REITS won’t like this!

"CBRE, in its bi-monthly research report, said central Dublin’s average rental cost of €700 per square metre was likely to soften, in part because lessors are being obliged by low demand to offer extra incentives. These can include offering up to the first year free on a 10-year lease.

Despite the offer of such discounts, many would-be renters are “unwilling to commit to long-term leases in the current climate”, CBRE said, partly because firms are “unsure of their future headcount”."

That reads like a 10% discount isn't sufficient, which could indicate a significant drop in commercial rents. Not unsurprising but it will be interesting to see, particularly as the Irish people are not exposed to this risk due to the commercial landlords mainly being large overseas capital. I presume there is an interconnectedness with the rental market in terms of it no longer being as profitable to build office space but worth BTL. In addition, there is still demand for good quality apartments. Perhaps not even to BTL but to sell to FTBs, which of course could influence the housing market by (1) making it more viable to rent rather than buy and (2) take FTBs out of the 2nd hand home purchase market.

Assetbacked · 04-09-2020 10:07am

I was on Booking.com yesterday looking at prices for hotels in Dublin on a Saturday night in the coming weeks and something stood out among the accommodation listings (besides the incredibly cheap hotel rooms on offer for Dublin); student accommodation is being offered for short-term stays. This applies to the university-offered accommodation itself as well as the accommodation of private investors. This Booking.com search indicates the demand for student rentals is non-existent and that tourism is utterly devastated still.

http://www.booking.com/Share-ZtBH70
http://www.booking.com/Share-UThX1J

beauf · 04-09-2020 10:23am

I like the detail it gives you - Only 3 rooms left on our site - Only 1 room left on our site.

I think it reflects the reality that students my only be part time on the campus for the foreseeable future.

The_Conductor · 04-09-2020 10:29am

Smouse156 wrote: »

Office rents may fall as occupiers renegotiate terms and seek sublets
https://www.independent.ie/business/commercial-property/office-rents-may-fall-as-occupiers-renegotiate-terms-and-seek-sublets-39494911.html

The REITS won’t like this!

Pension funds (such as AVIVA) are offloading some office and retail assets- with rent reviews due on them (Royal Hibernian Way for example). The ROIs currently being attained are giving prospective investors piss poor returns (of under 3.5%). The implication in the investment prospectus is that the rent review would result in better returns for the investors- however, one would have to seriously question this assumption.

Smouse156 · 04-09-2020 10:38am

The_Conductor wrote: »

Pension funds (such as AVIVA) are offloading some office and retail assets- with rent reviews due on them (Royal Hibernian Way for example). The ROIs currently being attained are giving prospective investors piss poor returns (of under 3.5%). The implication in the investment prospectus is that the rent review would result in better returns for the investors- however, one would have to seriously question this assumption.

AVIVA pitching €80 million is highly optimistic and the rent review increase for Davy is unlikely unless they were paying well below market. They note vacant units could bring it up to 5.8% (probably 5 if you discount the rent review) but it’s all guess work. Be interesting to see what they get for it

The_Conductor · 04-09-2020 10:59am

Smouse156 wrote: »

AVIVA pitching €80 million is highly optimistic and the rent review increase for Davy is unlikely unless they were paying well below market. They note vacant units could bring it up to 5.8% (probably 5 if you discount the rent review) but it’s all guess work. Be interesting to see what they get for it

The whole reason the retail units were kept vacant was to enable an expansion of the office space- and those units who were continuing to be occupied- were plagued by the particularly low footfall through the mall- it really is a ghost-town.

Now- the expansion of office space isn't going to happen.
The pre-existing office space won't be needed.
The retail units will want reductions in their rent commensurate to their piss poor trading conditions.
The vacant units- could very well remain vacant- or could be offered rent free or on nominal terms to prospective tenants just so the place doesn't look dilapidated.

Last time they tried to let units there- they offered a 6 month 'Hello' to new tenants (which led to a succession of shoe shops and boutiques who folded pretty soon after their rent free periods expired).

Its a bad time to be letting office or retail space- and its a bad location with appalling footfall.

Smouse156 · 04-09-2020 11:12am

The_Conductor wrote: »

The whole reason the retail units were kept vacant was to enable an expansion of the office space- and those units who were continuing to be occupied- were plagued by the particularly low footfall through the mall- it really is a ghost-town.

Now- the expansion of office space isn't going to happen.
The pre-existing office space won't be needed.
The retail units will want reductions in their rent commensurate to their piss poor trading conditions.
The vacant units- could very well remain vacant- or could be offered rent free or on nominal terms to prospective tenants just so the place doesn't look dilapidated.

Last time they tried to let units there- they offered a 6 month 'Hello' to new tenants (which led to a succession of shoe shops and boutiques who folded pretty soon after their rent free periods expired).

Its a bad time to be letting office or retail space- and its a bad location with appalling footfall.

Good points! Basically they’re hoping to con some foreign fund lol

PommieBast · 04-09-2020 11:13am

Assetbacked wrote: »

This applies to the university-offered accommodation itself as well as the accommodation of private investors. This Booking.com search indicates the demand for student rentals is non-existent and that tourism is utterly devastated still.

The crazy amount of student accommodation building in the general Grangegorman area is starting to look like a mini-bubble.

Yellow_Fern · 04-09-2020 11:46am

PommieBast wrote: »

The crazy amount of student accommodation building in the general Grangegorman area is starting to look like a mini-bubble.

That is what can happen when you penalise investment in home construction with RPZs but exclude student apartments. Pure market distortion.

OwlsZat · 04-09-2020 11:48am

PommieBast wrote: »

The crazy amount of student accommodation building in the general Grangegorman area is starting to look like a mini-bubble.

Investors chase yield nothing else. Best yield was short term holiday rentals. We saw every second developent being a hotel or short stay accommodation. Then student accommodation.

Any compentent Governemnt would have adjusted the situation so the best yield was residental housing. We are being made to pay now where the average house price is 6.5 times the average salary.

Ozark707 · 04-09-2020 1:09pm

PommieBast wrote: »

The crazy amount of student accommodation building in the general Grangegorman area is starting to look like a mini-bubble.

Not just the Grangegorman area. Belfield, down in parts of D8.

beauf · 04-09-2020 1:41pm

The students are being priced out of their usual area's.

Dedicated student accommodation, has always been very expensive vs a normal rental. Has been like that for decades. More so if its on campus, or near to it.
Though some colleges subsidize it. It was always in short supply and 1st years and postgraduate, masters etc got priority.

A lot of students especially those from overseas are coming from a wealthy background, and are willing to pay for premium student accommodation. Which means other students less well off are also priced out of the market.

https://www.thejournal.ie/ucd-students-protests-rent-5024318-Feb2020/
https://www.irishtimes.com/news/education/huge-increases-to-student-accommodation-costs-ahead-of-rent-caps-1.3979839

This old news.

beauf · 04-09-2020 1:49pm

https://www.thejournal.ie/readme/anmeldung-5194958-Sep2020/

In the meantime, Berlin’s property market has been thrown into chaos. Apartment viewings, always crowded, are now chaotic – Berlin’s evening news recently carried a report that 1,749 people showed up for a single small apartment to rent.

https://www.facebook.com/watch/?v=748399622311894

brisan · 04-09-2020 2:26pm

Anyone watch the Tonight show last night ?
Dan O Brien of the Indo pointed out that in the last crash it took 4 years for unemployment rates to hit their peak of 500k
At this present time we have 500k on unemployment benefit and roughly 400k on wage subsidy
Granted a lot emigrated last time and that option is not here this time around .

The_Conductor · 04-09-2020 2:33pm

brisan wrote: »

Anyone watch the Tonight show last night ?
Dan O Brien of the Indo pointed out that in the last crash it took 4 years for unemployment rates to hit their peak of 500k
At this present time we have 500k on unemployment benefit and roughly 400k on wage subsidy
Granted a lot emigrated last time and that option is not here this time around .

Not only that- we have people coming home, and ongoing emigration from elsewhere to here (even during the lockdown- 36k PPSNs were issued to non-nationals).

Its unprecedented.

Assetbacked · 04-09-2020 4:00pm

It's not difficult to see how SF will get into power in the next election if something drastic doesn't change.

beauf · 04-09-2020 4:43pm

Assetbacked wrote: »

It's not difficult to see how SF will get into power in the next election if something drastic doesn't change.

I thought they disbanded sometime around March.

The_Conductor · 04-09-2020 4:49pm

Assetbacked wrote: »

It's not difficult to see how SF will get into power in the next election if something drastic doesn't change.

SF want to get into government- to go on a spending spree.
If they do get into government- they're going to have to contend with the awkward fact that the cupboards are bare.
The capacity to borrow will not be there from 2022 onwards- which is when the EU Commission have indicated they intend to reinstate state borrowing rules (aka- they'll give everyone 2 years to get to grips with Covid-19, after that, they're cut loose).

SF will not be able to contend with the shackles of limited deficit spending- even up North they're getting subvented to the tune of close on 10b per annum by various entities (mostly London).

SF are a socialist entity- whose penchant is to promise goodies to the proletariat- and consequences be damned.

Assetbacked · 05-09-2020 6:00am

I don't disagree but where else will people turn if they want change since FF, FG and the Greens are now one and the same? That is what the electorate will think.

OwlsZat · 05-09-2020 8:20am

FF & Greens were elected on a few central issues one being housing. If they don't follow through on their mandate can see they getting reemed next election. They were given a mandate for a few specific topics and we've seen nothing yet.

Dav010 · 05-09-2020 9:13am

Assetbacked wrote: »

I don't disagree but where else will people turn if they want change since FF, FG and the Greens are now one and the same? That is what the electorate will think.

The performance of the new Government so far has given Marylou a gift the likes of which she may never see again. She has her platform and no excuse for not being able to ding the Government parties at will, is she up to it? I doubt it, if you can’t offer a credible alternative or a realistic way of doing this better, you are just back round noise. Every time she attacks the Government on housing and puts forward her policies, the same question will be shot back, where will the money come from Marylou? Increasing taxes isn’t the best way to win over undecided voters.

Hubertj · 05-09-2020 2:18pm

OwlsZat wrote: »

FF & Greens were elected on a few central issues one being housing. If they don't follow through on their mandate can see they getting reemed next election. They were given a mandate for a few specific topics and we've seen nothing yet.

Do you really think voting bombers into power will solve anything? Idealistic socialist bollox. Looks good on paper but when it comes to reality.
Policy over the last 10-20 years has failed but to think that lot can fix thinks is naive in the extreme.

The_Conductor · 05-09-2020 3:00pm

Hubertj wrote: »

Do you really think voting bombers into power will solve anything? Idealistic socialist bollox. Looks good on paper but when it comes to reality.
Policy over the last 10-20 years has failed but to think that lot can fix thinks is naive in the extreme.

Even trying to sit down and logically discuss anything with them is impossible.
They have wonderful ideas for a public housing programme- which they imagine they can 'print money' to fund. Seriously- have a look at people discussing their housing policies over in the politics forum- I've bowed out of the discussion altogether- I'd make progress with a brick wall- they don't want to debate or acknowledge that anyone might have a different point of view- or have the tenacity to question their beliefs- or not have the same beliefs that they have.

So- free houses for everyone. Free basic income for everyone. Roll out of additional public services. Additional pay for everyone. All paid for from? Of course, a magic money tree........ No cognisance that things have to be paid for.

05-09-2020 5:20pm

It's amazing how the magic money tree fallactly seems to disappear when the banks are in trouble though.

As for the other poster, I would surely vote for SF over the absolute bollockology of the last lifetime of this country.

If there was any truth in the army council calling the shots (which I don't believe), I'd prefer them over the mess that FF/FG have made when taking orders from (in the past) the church, and nowadays the banks.

And why is it always the church, or the banks?Why do FF/FG always need someone to tell them what to do?

I haven't read Eoin O'Broin's book yet, but by a majority of accounts, it is very good. I doubt the two posters above read it either.

Dublin - Significant reduction in rents coming?

Comments