Global property giant Kennedy Wilson is benefiting from rising rents in a ‘vibrant’ city of Dublin, as well as its decision to stock building materials here over the past two years.
This has meant it is not affected by the same material shortages and price increases that others in the industry are facing, according to CEO Bill McMorrow.
Kennedy Wilson is on track to complete another 1,000 apartments in Dublin by 2024, with demand and rents for new developments exceeding his pre-Covid business plans, McMorrow said speaking to investment analysts during a visit to Dublin last week.
McMorrow said occupancy at the company’s Clancy Quay site – the largest single apartment building in Dublin – has reached 97 percent. The company is also building major developments at Hanover Quay and Coopers Cross in Docklands and Kildare Street.
The Hanover Quay building has been let to fintech firm Fiserv in recent weeks, while the near-completed office development on Kildare Street is “on offer at 75 per cent to rent above business plan,” he said.
“We have three big projects going on here right now,” he said. “We made a decision early in Covid that we are going to continue the construction pipeline – and it turned out to be a really, really sensible decision because we are now completing things at a time when there are known supply chain issues. “
The firm started “buying out” materials when it started projects up to two years ago, he said.
“And we stored these materials in the place where we built. So we had no significant supply chain issues or cost overruns.”
McMorrow’s colleague Kennedy Wilson, President Mary Ricks, was also optimistic about the company’s other major Irish investment, the Shelbourne Hotel on St Stephen’s Green.
“We are very pleased with the booking in Dublin,” said Ricks. “We are here in Dublin. We’ve been here for a week and the city is buzzing. There is a lot of energy. And we’re really excited about the occupancy and performance of our multi-family properties, and we expect it to just keep going.
“As for the Shelbourne, it’s the same comment. I mean, it’s great to see the Shelbourne is super busy.”
Ricks said that by the end of March the hotel was making “approximately $1 million a month” in net operating income (NOI), a profitability metric used in the hotel sector to show revenue after expenses are paid.
About 50 percent of rooms at the Shelbourne were sold out for the rest of the year, she said.
“In the hotel world, that’s a great base to increase your rate,” she said, adding that the ailing euro has seen an influx of American tourists, with about 68 percent of room bookings currently coming from America.
“And that really hasn’t been the case since March 2020. So we’re very excited to see where the Shelbourne is going. We expect it to be at least €10m NOI this year and we could top that,” she said.
Ricks was similarly optimistic about the company’s housing developments in the city.
“We see rental growth. And I think as you see our development pipeline getting done, we’re building really top notch apartments with lots of amenities.
“So we’re seeing these market rents continue to rise, and I think we can certainly really put our NOI into our new development projects,” she said.
https://www.independent.ie/business/irish/kennedy-wilson-executives-upbeat-over-buzzing-dublin-rental-market-41721671.html Kennedy Wilson executives are upbeat about Dublin’s ‘buzzing’ rental market