THE AIB Trade Centre, a distinctive office investment near the front of Dublin’s IFSC, is to be offered for sale through Bannon’s investment department with a guide price of €7.8 million.
The three-storey over basement building at Custom House Quay, also known as Stack B, will give investors an immediate return of 9 per cent after costs are deducted.
The riverside block extends to 1,734sq m (18,665sq ft) and is let to AIB on a lease which has almost nine years to run. The lease agreement provides for an upwards-only rent review in 2016 on the current passing rent of €735,000 per annum.
This equates to €473 per sq m (€44 per sq ft) which is on the high side compared to the most recent IFSC lettings at about €269 per sq m (€25 per sq ft). There are 17 surface car parking spaces rented at €3,500 each.
Rod Nowlan of Bannon says he is expecting a significant level of interest in the property, given the range of investment and asset management opportunities on the 0.4 of an acre site. Stack B was dwarfed in comparison to nearby blocks – the adjoining building developed for Dermot Desmond stands seven storeys high.
Stack B was originally a riverside warehouse which was extensively redeveloped and enlarged to become a three-storey over basement office block in the early 1990s. The developer was no other than businessman Denis O’Brien who sold the building to a group of wealthy investors in a position to avail of a generous tax shelter.
The block has water views from three sides – the Liffey, George’s Lock and George’s Dock. There is also an adjoining undeveloped site which originally had planning permission for a retail bank outlet.
Investors looking at Stack B will undoubtedly ponder on whether AIB will transfer staff to the Ballsbridge headquarters when the lease runs out at Custom House Quay just as it has announced plans to relocate other IFSC personnel to Bankcentre.
Nowlan says there are obvious asset management opportunities in Stack B, both on the adjoining undeveloped site and within the building footprint to intensify the unusually low plot ratio of 1:1, subject to legal, planning and structural capacity.
AIB has continually upgraded the internal fit out of Stack B since moving in and it now has raised floors, suspended ceiling and full mechanical ventilation throughout.
Even if AIB eventually surrenders the lease, there is little doubt the new owners should be able to find a replacement tenant because of the prominent location of the block, the high quality of the accommodation and the fact that there are constant enquiries for office space in the IFSC.
Although there is an estimated 9,290sq m (100,000sq ft) of space currently available in the IFSC, most of it is in relatively small units in a large variety of buildings.
