Wednesday 23 January 2019

Nama would be a big winner from Murphy's high rise Dublin plan

Ending restrictions on dual aspect, parking numbers and height could increase the number of planned residential units in the Docklands by 70pc. Photo: Maxwells Photography
Ending restrictions on dual aspect, parking numbers and height could increase the number of planned residential units in the Docklands by 70pc. Photo: Maxwells Photography
Richard Curran

Richard Curran

Housing minister Eoghan Murphy delivered what many will see as welcome news at the recent Irish Planning Institute Annual Autumn conference. At it he said he would tackle the "faintly ridiculous restrictions" on using scarce land in an effective and efficient way.

These restrictions include height limitations, the number of car park spaces that have to be provided, and burden of having to build dual-facing apartments.

The minister referred to two of these in his speech, saying they could be changed in parts of Dublin City between the canals. But he specified it must be where the sites are close to good public transport.

The obvious place for this to work would be the Docklands area which has Luas stops, a Docklands station and other transport links.

So who would benefit in the Docklands and how high could they go? The truth is that such a change could substantially increase the number of residential units built along the river, quite quickly.

This includes the Block Three site near the new Central Bank building. It has planning for 500 units.

Another big winner would be the site near North Wall Quay known as Block Nine.

Also standing to gain would be CIE, which is still a major land owner in the area.

Residential developer Michael O'Flynn is also a big owner of sites in the area. He is developing the old Tedcastles site beside the Point Village. This used to be owned by Treasury Holdings.

Former Treasury Holdings founder Johnny Ronan has planning permission on a CIE site at North Spencer Dock for 620 student-accommodation units. This is based on a seven-storey building. It is adjacent to buildings that are 11 and 12 storeys. Matching those could add another 500 units.

It all depends on how high they can go. But property sources suggest that doing away with the restrictions on dual aspect, car parking numbers and height could increase the number of planned residential units in the Docklands by 70pc.

That might go a long way towards improving our residential offering in attracting jobs to the IFSC or just providing a lot of people with an affordable place to live.

Nobody is talking about Manhattan, but it seems the minister has now seen the scope for a relatively quick and significant increase in residential units in some areas.

The State could win on the double, given that two state bodies would be among the biggest beneficiaries.

Coillte's 'flipping' energy plan

When it comes to State companies benefiting from their land banks, few have bigger plans than Coillte. The state forestry company is looking for a joint venture partner to develop €1.3bn worth of wind farm assets on 12-15 sites around the country. The strategy could see a big payday for Coillte further down the road, because its current plan is to develop the assets and then sell them.

It wants to become a wind farm developer rather than a wind farm owner. To illustrate the point, chief executive Fergal Leamy said during the week that he plans to sell its existing portfolio of four wind farms in which it has a 50pc stake.

Leamy reckons their 300 megawatts of wind power are worth around €2m to €3m per megawatt.

After debt, they could be worth €150m to Coillte after a sale. But what to do with the money? Leamy wants to use it to double or treble up and put it into a new mega wind venture, which it would in turn sell on.

It could pay out big time for Coillte, but what would it do with that money? A good problem to have, but it isn't clear how it fits in with the long-term strategy for the company. Leamy suggested that keeping the wind assets after they are operational would be akin to making Coillte into a utility. Why not?

It isn't that long ago since a full merger of Bord NaMona and Coillte was planned by a more naive and fresh-faced Fine Gael in 2012. After deliberating on it, they agreed to form a commercial joint venture with Bord na Mona on renewable energy. That resulted in a joint wind farm project in Roscommon, which now looks like being sold on. Coillte and Bord na Mona have definitely shaken off those merger proposals.

Leamy has brought a fresh approach to many aspects of the Coillte business and he has lifted its public profile, with sales of land to Center Parcs in Co Longford, and to Apple for its data centre in Athenry.

He has also showed that he is keen to develop leisure activities across Coillte's land base which accounts for 7pc of the land of Ireland. Building and then flipping wind farm assets may well prove quite lucrative, but exactly to what long term end for Coillte?

Black Monday: this time it's different

Thirty years after the stock market crash of Black Monday there was some nervousness in the US about whether it is all going to happen again. The consensus was "probably" but not just yet. In the year up to Black Monday the S&P 500 index shot up by 72pc. In the last year it has gone up by around 17pc. Twelve-month earnings across the index went up by 17pc before the 1987 crash. In the last 12 months earnings are up 121pc.

That suggests it is all a lot more solid this time round - for now at least.

But US Treasury Secretary Steve Mnuchin said some troubling things to Congress during the week. He said if they didn't pass corporate tax reform measures, the stock market would fall, because it had been built into the price.

Clearly it doesn't say much for Mnuchin's faith in the fundamentals of stock valuations at these levels when he believes a chunk of their value is already built on the premise of tax benefits down the road.

Analysts were quick to say they haven't priced these cuts into their valuation models. But who can say how much of the current record stock price highs are built on sentiment that could easily evaporate.

Bombardier jobs safe - sort of

The good news for Belfast this week was that 1,000 Bombardier jobs look safe. Airbus agreed to buy a majority stake in the C-Series jet which had been the source of controversy with Boeing and prospective tariffs on US sales of 300pc.

Before breathing a sigh of relief, there are still some hurdles to jump. The Airbus deal will take around a year to get regulatory clearance. In the meantime, the US could slap on the tariffs.

The new deal will prevent the tariffs by assembling the planes at the Boeing facility in Alabama. Bombardier has assured staff this will not affect its assembly plant at Mirabel in Quebec. But how can they make that assurance unless they are simply going to put stickers on the planes in Alabama?

A 150-seater jet isn't something you can just box in one location to pretend it was made there. Jobs in Belfast look more secure because the wings are made there but this deal won't fly unless some additional jobs get transferred to the US from somewhere.

These planes may defy gravity but the business cannot defy economics.

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