With interest rates widely expected to begin pursuing a downward trajectory before year’s end, the prospect of securing a 5.87 per cent net initial yield from a government-backed tenant should see strong interest from a range of domestic and international investors in the sale of a large logistics facility in Swords, Co Dublin.
The property, just off Balheary Road, which is let in its entirety to the Office of Public Works (OPW), is guiding at a price of €21 million through joint agents Finnegan Menton and Cushman & Wakefield.
Developed originally in two phases as a Motorola (then Celestica) advanced electronics factory, the building was repurposed in 2010 to serve as a storage facility for the OPW. The property is occupied by the State on a 20-year lease from September 2010 at a passing rent of €1,316,250 per annum increasing to €1,355,250 per annum in September 2024.
The lease provides for five-yearly rent reviews to the open-market rent with the next review due in September 2025. The passing rent breaks back to €67.16 per square metre (€6.24 per square foot), well below current market rates, offering significant reversionary potential for the purchaser. It is understood that the tenant is interested in extending the current lease term and has entered into discussions with the landlord on same.
The property extends to 19,605.7sq m (211,034 sq ft) and is situated on a site of 3.46 hectares (8.56 acres). There are 92 car-parking spaces to the front and side and a loading yard to the rear providing access to seven dock levellers and four on-grade loading doors.
Joint selling agents Nicholas Corson of Finnegan Menton and Clive Roche of Cushman & Wakefield say: “Balheary Road offers investors an exceptional opportunity to acquire a logistics facility which is central to the operation of a secure government-backed tenant. In the near term, there is the potential to extend the existing lease term and to drive income returns while in the longer term, there is potential for residual upside through the exploration of redevelopment opportunities.”
