The Swedish property adviser, Catella, has acquired its first Irish property investment, paying more than €40 million for the JP Morgan headquarters building in Dublin's International Financial Services Centre.
Selling agent JLL had been quoting in excess of €36.5 million for the distinctive red-brick building at One George's Dock but with several other big name institutions chasing the investment, including State Street, Irish Life and Hibernia REIT, the Swedish fund settled for an equivalent yield of 5 per cent.
John Moran of JLL, who is handling the investment, said it was "premature" to record any sale at this stage.
A €40 million selling price would equate to a capital value of €900 per sq ft.
The five-storey-over-basement office block has a net internal area of 4,132sq m (44,476sq ft) and 46 car-parking spaces in a basement car park accessed from George’s Dock. It is let to JP Morgan Bank under a 25-year full repairing and insuring lease from December 1966, leaving just over five years unexpired and upwards-only rent reviews.
First phase
The current rental income of €1,804,748 a year represents 80.44 per cent of the full rental value. The building will revert to 100 per cent rental value when the lease expires in 2021.
One George's Dock formed part of the first phase of the IFSC and was developed in the early 1990s by Hardwick and British Land. The block was subsequently the subject of a sale and leaseback with Chase Manhattan Bank.
A surprisingly high number of office blocks in the original IFSC have been sold in recent years and later upgraded and extended to facilitate some of the large number of companies moving into Dublin in recent years.
Apart from the IFSC close proximity to the city centre, it has also benefitted greatly from a good transport system including the Connolly Dart and mainline railway station and the Luas red line interchange.
The Luas cross city service now well advanced will further improve accessibility with the south of the city. More than 430 international and domestic companies are currently based in the IFSC.
