Dundrum value hit by stamp duty rise
UK property giant Hammerson, which owns 50pc of the Dundrum Town Centre mall in Dublin, has warned that recent stamp duty changes unveiled in October's Budget will hit the value of its Irish assets.
Apart from its stake in Dundrum Town Centre, Hammerson also owns a 50pc share of the Ilac Centre in the capital, and a 50pc share of the Pavilions Shopping Centre in Swords, north of the city.
It also owns a swathe of development land in Dublin around the Ilac Centre, and a stake in the Kildare Village retail outlet mall.
"Following the changes to stamp duty in Ireland as part of the recent Government budget in October this year, stamp duty for commercial property in Ireland has increased from 2pc to 6pc," Hammerson pointed out in a trading update as it also held an investor day in the UK.
"This will directly impact the value of commercial property assets in Ireland, including the carrying value of our own Irish assets albeit income returns are unaffected and remain positive for our portfolio."
Finance Minister Paschal Donohoe was unapologetic last month when he announced the increase in commercial stamp duty.
He pointed out that the commercial stamp duty rate had been slashed from 9pc to 2pc during the downturn.
Hammerson valued the Dundrum Town Centre at more than €1.5bn in September after it refinanced loans attached to the property, which is co-owned by German insurer Allianz.
Hammerson and Allianz took control of the centre in 2015 after agreeing to pay Nama €1.85bn for €2.6bn worth of loans connected to it, as well as the Ilac and Pavilions.
The transaction is thought to have placed a valuation of about €1bn on the Dundrum centre.
In a trading update yesterday, Hammerson said the Dublin retail market has continued to outperform its European peers.
Hammerson CEO David Atkins pointed out that Central Statistics Office (CSO) data showing a 4.3pc rise in retail sales during the third quarter had been reflected in the performance of its Irish assets.
Hammerson, part of the FTSE-100, added that across its European platform, it has seen strongest leasing demand from differentiated fashion and sports brands such as Sephora, Pandora and L'Occitane.
Hammerson said that during the third quarter, the group, excluding its premium outlets, signed leases worth £6.8m (€7.6m) of rental income, up 17pc on the corresponding quarter last year. Hammerson said retailers are increasingly basing decisions for new store locations on data harvested from their online operations.
See graphic, p30-31