Sunday 23 November 2014

Supply, demand and location, location, location

Company Focus: Mason Owen & Lyons

Published 27/07/2014 | 02:30

THE TEAM: Ruth Cody, Lucy Connolly, Maureen Cooney; Edward Lyons and Paul Kelly (back row)
From left: Dan Holland, John Fisher and Sean McNamara of Smith & Williamson

The old adage of 'supply vs demand' certainly seems apt when discussing the current Dublin office market, as new highs in rents per sqm have been widely reported across the property pages in recent weeks.

This demand-led resurgence is resulting in an ever-increasing rate per sqm. With no speculative development for some years now, a supply shortage has emerged. The IDA is warning that a shortage of commercial property could harm future investment within Ireland. Dublin needs to create an end product to attract more overseas investors and to underpin its position as a first-class corporate location.

Bearing this in mind, in May of this year a large section of the Docklands area was given the green light to become part of a Strategic Development Zone (SDZ), which will see new developments being fast-tracked through the planning process. An increase in rents, coupled with a reduction in yields, has made the redevelopment of office blocks viable again for the first time in seven years.

Growth in the retail market is a little patchy - rents in prime locations are showing signs of green shoots but have not caught up with the highs at the peak of the boom.

The investment market has rapidly strengthened over the last year with REITs and foreign investors chasing debt and large portfolios, and this, coupled with a perceived value in property versus other traditional investment models such as stocks and shares, has accelerated demand for all property investment, which in turn is pushing yields down. However, the other old adage 'location, location, location' remains and investors must consider the 'letability' of the property if the existing tenant vacates. The retail sector has not experienced the same level of recovery as offices. So, the over-supply of shops in tertiary locations may never be met by demand and alternative uses will be required.

Established some 37 years ago, Mason Owen & Lyons has earned its place amongst the leading names in the Irish commercial property sector.

 

Dan Holland Partner, Head of Assurance and Business Services, Smith & Williamson:

Mason Owen & Lyons has been a long-standing client of our firm for over 25 years. In that time, we have gained an in-depth appreciation for how Edward and his team consistently deliver results for their clients.

In the competitive commercial property sector, Mason Owen & Lyons's pro-active, hands-on, professional approach has enabled the firm to remain one of the leading names in the sector for such a long time.

International property investors seeking suitable investments and multi-nationals seeking commercial properties to let, are becoming increasingly important to the Irish commercial property sector. In this context, Mason Owen & Lyons's long-standing affiliation with Mason Owen & Partners in the UK and experience of assisting international clients remains a competitive advantage.

At Smith & Williamson, we place huge focus on delivering a consistent, quality service to our clients and ensure we give as much attention to our existing clients as we do to developing new ones.

This approach is very similar to Mason Owen & Lyons and has enabled us to proudly have it as our client for so long.

 

John Fisher, Associate Director, Tax Services to Businesses, Smith & Williamson:

With the ever-changing tax legislation, companies are required to keep up to date with the changes which affect their business.

We at Smith & Williamson communicate regularly with Mason Owen & Lyons to ensure that the company is always aware of any changes in legislation and practice. The company proactively engages with us on a range of tax topics, including corporation tax, VAT and payroll taxation. Cash flow is vitally important and the payment of tax liabilities on time requires advance planning and accurate forecasting.

Mason Owen & Lyons has created a strong brand in its 37 years of existence and with the upturn in the property sector, particularly in Dublin, it is well positioned to profit. The increased activity by international investors has added a new dimension to the property sector.

The tax implications of property transactions, particularly VAT, can be complex and it is important that any 
potential VAT and other taxes are 
considered by the company in a timely manner. Through our membership of Nexia International, we are also able to provide non- Irish tax advice.

 

Sean McNamara, Partner, Restructuring and Recovery Services, Smith & Williamson:

This year has seen a notable increase in the level and value of property transactions in all sectors. Many (if not the majority) of these transactions have been executed by receivers acting on behalf of financial institutions.

While the appointment of a property receiver hardly raises an eyebrow in 2014, prior to 2008 this was a relatively rare occurrence. Before the downturn, the insolvency sector was focused on dealing with businesses across a broad range of industries and sectors.

Though the downturn affected everyone, the proportion of property-related insolvencies has risen significantly over the past six years. As a result of the change in the nature of insolvency work during the downturn, the sector has relied on specialist "asset managers" like Mason Owen & Lyons to assist in dealing with these properties.

From our experience at Smith & Williamson, this combined approach has been critical to preparing properties for the sales process. In a sophisticated market that comprises REITs, institutional and foreign investors, the ability to confidently manage and prepare properties for sale ensures that the values are maximised.

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