A redeveloped office block at 75 St Stephen's Green will interest investment syndicates and funds, writes Jack Fagan
Another high value Dublin office investment, currently being offered for sale off-market, is likely to be of interest to investment syndicates and a range of institutions.
John Moran of Jones Lang LaSalle is seeking €180 million for 75 St Stephen's Green, the newly redeveloped seven-storey office building on the south side of Dublin's premier square, which is being let on a floor-by-floor basis. It will have a rent roll of €7 million, giving the new owners a net yield of 3.78 per cent.
Three firms have already taken space in the 9,401.3sq m (101,206sq ft) block and the remaining floors are under offer at a strong rent of €645 per sq m (€60 per sq ft). Unusually for a building on St Stephen's Green, it has 65 car-parking spaces. The low-key campaign to sell the investment comes a month after Dolmen Stockbrokers announced that it was taking the ground floor of the block at a rent of €900,000 a year. The 25-year lease on 1,347sq m (14,500sq ft) provides for a break option in year 15.
Jones Lang LaSalle claimed it was the first letting in many years in the city centre which did not include any incentives, such as rent-free periods. That implies that a previous letting last March of the fourth and fifth floors to the international offshore law firm Maples and Calder did include incentives. Nevertheless, it is paying a rent of €1.8 million for 2,822sq m (30,376sq ft) of space under a fairly similar lease with a break clause in year 15. Maples and Calder merged last December with Binchys, the first time an international company negotiated a formal merger with an Irish law firm. Maples and Calder is the largest legal firm in the Cayman Islands.
The 836sq m (9,000sq ft) at penthouse level is to be rented by Garret Kelleher's Shelbourne Developments, which redeveloped the building over the past two years. It bought the former Department of Justice block from the Office of Public Works in 2004 for €52.3 million in the expectation that it would be pre-let to a single tenant. However, large scale office deals were thin on the ground in the early months of the year; though they have become more commonplace since the beginning of the summer.
While developers prefer a single tenant, multi-lettings, which are more common on the Continent than in Ireland, frequently generate greater rental income. The three floors still vacant are likely to be leased in the coming weeks at one of the highest rent levels in the city.
Designed by architects Burke-Kennedy Doyle, the remodelled block has a fully glazed façade, a double height entrance lobby with marble floors and limestone wall cladding. It is finished to the highest specification including raised access floors. Air conditioning is by way of a chilled ceiling system and there is a resulting floor-to-ceiling height of 2.75 metres.
