Castlethorn is selling two office buildings and a two-acre site between Merrion Road, Dublin, and the sea
THE PROPERTY DEVELOPER Castlethorn is to test the strength of the investment market by offering for sale Merrion House office block, along with a former call centre and a development site, at Merrion Road in Dublin 4.
Peter Flanagan of BNP Paribas Real Estate is understood to be seeking around €13 million for the three-storey building and the vacant call centre and a further €5 to €6 million for an adjoining site of almost two acres.
The portfolio is likely to be of particular interest to companies in a position to enhance the property’s value as a result of its Z6 zoning which will allow a mixed-use development on the site including residential, offices and retail. The complex faces one of the busiest roads in the city.
Castlethorn has been involved in some of the largest residential developments in the Dublin area in recent years, including the new town at Adamstown in west Dublin, but, as with other builders, it has now phased down its building operation because of the banking crisis and slowdown in new house sales.
The company, which has had its business plan approved by Nama, is obviously hoping that the sale of the Merrion Road property will free up capital at a time when there is no immediate sign of a resumption in normal bank lending.
Castlethorn’s sister company, Crossridge, was responsible for the development of Dundrum Town Centre, now the most successful shopping centre in the country, with a rent roll set to exceed €50 million in the coming months. The loans on the centre have been transferred to Nama.
Merrion House and the former call centre back on to the coast and are directly opposite the high profile but troubled office and apartment development at Elm Park completed by Bernard McNamara, Gerry O’Reilly and David Courtney.
Merrion House is currently producing a rental income of close to €2 million from three tenants: Jacobs Engineering, Eircom and Combined Insurance.
Jacobs Engineering, a previous owner of the building, occupies almost two-thirds of the space on a sub-letting from Eircom under a lease which is due to run until 2015. The current rent of €303 per sq m (€28.20 per sq ft) will not be affected by any changes in the upwards only rent review procedures. Merrion House has an overall floor area of 7,000sq m (75,348sq ft). All but 1,000sq m (10,763sq ft) are let on full repairing and insuring leases. Although planning permission for an extension to the second floor was granted by Dublin City Council, that consent has since lapsed. The late-1970s building has only three floors compared to seven in some of the blocks on the opposite side of the road. There is also scope to increase the rent roll by refurbishing or redeveloping the 1,000sq m (10,764 sq ft) call centre previously rented by Swiftcall. There are 190 parking spaces on the site.
Flanagan says the three-acre Merrion Road property presents investors with immediate high yielding returns together with an opportunity to create added value by asset managing the existing properties and income and also by progressing the future development potential of the site.
