OfficeSector: There will be intense competition for a modern office building in a pivotal position beside Cork's main retail streets of Patrick Street and Grand Parade, writes Jack Fagan
With prime office investments virtually unobtainable in Cork city - as well as Dublin - there is likely to be strong competition for Gardner House at South Mall when it goes for sale by tender on May 26th.
The six-storey modern building is let to a number of well known financial firms, including PriceWaterhouseCoopers, which has responsibility for about half the space under a long lease which has another 16 years to run.
Joint agents Lisney and Davin Auctioneers are guiding over €7.75 million for the investment which would show an initial yield of 3.78 per cent.
However, the return will exceed 5 per cent once a number of rent reviews are completed. The current rent roll is €325,835.
PWC occupies the first and second floors and has sublet the fourth level to ACC Bank.
Other floors are let to Royal Liver and Royal Sun Alliance while Lisney pays a rent of €85,000 for the ground floor.
An antenna on the building owned by Hutchinson 3G brings in an annual rent of €11,500 and negotiations are under way with another telecom company which may install a second antenna on the block.
Gardner House has a net floor area of 1,624sq m (17,480sq ft), fronts on to the South Mall and also overlooks the River Lee.
It occupies a pivotal position beside the traditional retail streets of Patrick Street and Grand Parade.
The selling agents expect that the investment will be of interest to a private investor or to a consortia looking for a gilt-edged holding in the property market. The strength of the covenants is likely to prove a good selling point.
