The renewed interest by Irish and overseas investment groups in Dublin’s International Financial Services Centre will be tested again shortly when a high profile office building with redevelopment potential is offered for sale.
Adrian Trueick of Knight Frank is quoting around €29 million for Georges Dock House which is rented at €2,050,000 and provides an initial return of 6.8 per cent.
The building has been held by a Derek Quinlan-led consortium since it was built in 1996 and with all the tax breaks now exhausted the owners plan to follow the example of other investors in the IFSC and sell on the block.
Investment funds interested in the offices will have the option of taking control of more than half of the overall space of 4,041 sq m (43,500 sq ft) and refurbishing it before putting it back on the letting market. This new opportunity has arisen because the main tenant, Susquehanna, is in the process of relocating to the 9,290 sq m (100,000 sq ft) former headquarters of the AIB International at the front of the IFSC which it recently acquired. However, the privately held global investment company still has 6.5 years remaining on its lease of part of the second floor as well as the third and fourth floors. Whoever buys the block will inevitably negotiate a premium for an early lease surrender and set about upgrading at least this part of the building.
A further 40 per cent of the building is rented by a subsidiary of the Dutch-owned Rabobank Group while the remaining and 8.5 per cent of the space is occupied by Airbus Finance, an important player in the Dublin air finance hub.
Average rents in Georges Dock House work out at around €473 per sq m (€44 per sq ft) because of the long term leases in place. In spite of some dramatic falls in the IFSC between 2008 and 2011 the rents are steadily moving up again. The most recent settlement at George’s Dock 6 was €403 per sq m (€37.50 per sq ft) but letting agents are now generally quoting over €430 per sq m (€40 per sq ft) for available space in the area. Even at these levels rents will still be more than 20 per cent below the figures achieved when supply was considerably higher.
Georges Dock House comes with 40 basement car parking spaces as well as a third generation fit out including raised access floors, suspended ceilings and recessed lighting. The typical floor to ceiling height is 2.65 metres.
The entrance is by way of an impressive foyer with polished granite floor and wall finishes. Internally, the offices provide adaptable and flexible work space. The L-shaped floors with a central core allow for sub division at each level. Trueick says that subject to planning there is scope to enlarge the building by adding additional floor space at plant room level. The building adjoins Georges Dock 3 and 4 with a central landscaped courtyard between the buildings. At the rear, the offices overlook the dock basin.
Susquehanna occupies 2,071 sq m (22,300 sq ft) under a 25 year lease from July, 1996, at a rent of €1,050,000. Rabobank leases the ground and first floors (1,629 sq m/17,535 sq ft) on a 25 year lease from 1996 at a rent of €826,000. Rabobank has sub-let the first floor to a subsidiary De Laga Landen. Airbus occupies 342 sq m (3,685 s q ft) on the second floor.
