D4 block at €30m off 2006 price

A HIGH-QUALITY office block off Shelbourne Road in Ballsbridge, Dublin 4, which was sold at the peak of the property boom in 2006 for €47 million, is now back on the market at €17 million – a 64 per cent drop.

The five-storey over-basement Brooklawn House is being sold on the instructions of Kieran Wallace of KPMG, who has been appointed receiver to the Brooklawn Partnership by the Irish Bank Resolution Corporation.

The property was managed by D2 Property Management, an investment company run by David Arnold and Deirdre Foley, who assembled a substantial commercial property portfolio in London as well as in Dublin at the height of the market.

The investors in Brooklawn included one-time AIB chairman and former attorney general Dermot Gleeson; ex-Anglo chief Seán FitzPatrick and his children, Jonathan, Sarah and David; John Gordon, a senior counsel; and businessman Colm McAlinden.

Dessie Kilkenny, who recently joined Savills investment team from CBRE, said he expected considerable interest from overseas as well as locally in the 4,190sq m (45,100sq ft) block because of its realistic valuation and the considerable demand for third-generation offices in the Ballsbridge area.

Brooklawn House was one of three office buildings developed by the G & T Crampton construction company on its own grounds in the mid-1990s.

The other two were sold at the time to the ESB Pension Fund, which managed to let them to Iona Technologies (now Progress Software).

Crampton held on to the third block until 2006, when it decided to cash in on the huge demand for investment opportunities. It enlisted the support of John Moran of Jones Lang LaSalle, who managed to place Brooklawn House with D2 Property Management at a yield of about 3 per cent. Whoever buys the block this time around can expect a net initial return of 12.4 per cent.

The building is currently producing a rental income of almost €2.2 million per annum from the offices and 29 basement car-parking spaces. Investors are likely to take the view that it is somewhat over-rented at €430-€538 per square metre (€40 to €50 per square foot).

The various leases on the multi-let block have break options in either 2015 or 2016. Citibank Europe has sublet two floors to Eirgrid, the State-owned electric power transmission operator, and Ezetop, the international company that allows people living or working abroad to top up the mobile phones of friends and family back home. A third floor held by Citibank is currently vacant.

The Higher Education Authority and IG International Management, which provides fund-raising services, occupy the remainder of the space.