InvestmentsA modern office building behind a period facade on Molesworth Street in Dublin 2 has development potential, writes Jack Fagan
The Dublin office market continues to throw up interesting investment opportunities.
Modern buildings in the south inner city have been proving particularly popular because of the sharp recovery in the letting market and the number of companies still looking for space.
The latest block to come on the market is Lisle House, a particularly well located freehold office investment on Molesworth Street, which is expected to make in the region of €19.5 million when it is sold by private treaty through the Lisney agency. This would provide a net initial yield of 3 per cent.
The building has a floor area of 1,757sq m (18,909sq ft) and eight car-parking spaces. Its location could hardly be better, right in the heart of Dublin's administrative core between Leinster House and Dawson Street.
Lisle House has a period facade and was extended in the 1970s to provide open-plan floors with good natural light. The block was refurbished in the mid 1990s and fitted with raised access floors, air conditioning, suspended floors and Cat 5 cabling.
The current rental income is €654,000. The building is let under a 33-year full repairing and insuring lease to Hibernian Insurance Co that expires at the end of 2008.
The entire space has been sub-let to J&E Davy under a short term lease that also expires at the same time. Some of the upper floors have been underlet to a firm of surveyors. The sub-tenants do not have land and tenant renewal rights.
Lisney says that, once the lease runs out, a new owner will have an opportunity to extend and improve the building.
Ann Hargaden of Lisney, who is handling the sale, says that Lisle House provides an excellent opportunity to harness the forecasted growth in city centre rents. It allowed investors and developers to prepare for a redevelopment of the building with the benefit of an undoubted income stream.
The car-parking facilities are reached at Schoolhouse Lane. Recent developments along this lane, including the building of the award winning headquarters for architects HKR, suggest significant scope to provide additional floor space on the site.
