A COMBINED office building and a multi-storey car park in Dublin’s IFSC is the latest distressed investment to be offered for sale on the instructions of Nama.
Agent Knight Frank Ireland is to seek in excess of €28 million for The Forum which is held by Liffey Partnership, a company controlled by investor Derek Quinlan and property developer David Arnold. The original funding was provided by Bank of Ireland.
If the asking price is achieved, the investment will show an initial net yield of 9.4 per cent after the standard acquisition costs of 4.46 per cent are taken into account.
The mixed-use building on Commons Street, just off North Wall Quay, will be of interest to Irish and overseas investors, particularly as Nama has undertaken to provide vendor finance of 70 per cent loan-to-value with a 3 per cent margin and a 1 per cent arrangement fee.
Even better, Paul McDowell of Knight Frank, who is handling the sale, says the five-year Nama funding could potentially be increased to a seven-year term.
The Forum is probably one of the best known buildings in the IFSC because it includes the only public car park in what is an extremely busy location.
The 370 parking spaces laid out over four levels have a particularly high occupancy rate because of the staggered hours worked by many of those engaged in the finance, insurance and banking industries. The nearby Jurys hotel is also a big user of the car park.
The fourth and fifth floors are given over to high quality office space extending to 4,376sq m (47,108sq ft). The unusually large floor plates – one 2,317sq m (24,941sq ft) and the other 2,000sq m (21,530sq ft) – are particularly suitable as dealing rooms.
The offices are occupied by the large German-owned Depfa Bank on two co-terminus 25-year full repairing and insuring leases which run out in March, 2029. The bank has a break option in March 2019.
The current office rent roll of €1,858,840 equates to around €430 per sq m (€40 per sq ft) – slightly in excess of the going rent in the IFSC of €269-€322 per sq m (€25-€30 per sq ft).
However, that picture may change somewhat by the time the next upwards-only rent review takes place in less than two years. Depfa Bank also pays an additional rent of €165,000 for 50 car-parking spaces in the same building.
The car park itself is let to Park Rite Ltd at €675,000 per annum. The operator’s three-year lease expires in May 2013.
McDowell says there may be an opportunity to increase the income from the car park when the lease runs out next year. “The Forum multi-storey car park is perhaps a little under rented and being the only public car park in the vicinity of the IFSC it enjoys full capacity and as such may be capable of generating a higher rental income return.”
The Forum is also conveniently located for bank workers who rely on public services.
It is a few minutes walk from Busáras and Connolly Station, as well as from Dart, Arrow and Luas services.
