Large office letting beside the Gaiety

THE MOBILE phone company 3 is to set up its head office in a new mixed-use building at the side of the St Stephen’s Green shopping centre on South King Street in Dublin 2.

The company has agreed rental terms on two floors extending to 1,858sq m (20,000sq ft) over the Zara, HM and Warehouse stores. The office will be ready to move into after Christmas.

The letting is one of the most significant in the city centre this year and almost certainly included concessions to the tenant, including a rent-free period of at least one year and several break options on the lease, the first after seven years.

The rent on One Clarendon Row is thought to be around €323 per sq m (€30 per sq ft).

The mobile phone company has a clear preference to be located in the city centre and is currently based over the former Habitat store on Suffolk Street. That retail unit is shortly to be taken over by the UK chain that owns the Cult and Superdry fashion brands.

The 3 offices and a further 929sq m (10,000sq ft) still available are owned by Joe O’Reilly’s Chartered Land which also has 50 per cent holdings in the Ilac shopping centre on Mary Street and the Pavilions shopping centre in Swords.

About 90 per cent of the retail element of the South King Street scheme, let to Zara, HM and Warehouse, was sold by Mr O’Reilly at the peak of the property boom for a knockout price of just over €101 million. Anglo Irish Bank settled for a net yield of just 2.75 per cent for the core investment income as well as top-up payments based on the turnover of the retailers. It is thought unlikely that the top-up bonus has kicked in because of the fall-off in consumer spending generally.

Anglo Irish Bank planned to sell on the retail properties to private investors but missed the market and it ended up as yet another toxic asset on the bank’s accounts.