Quinlan Private has purchased Eircom's new headquarters near Dublin's Heuston Station for over €190 million in a sale and leaseback arrangement with the telecoms company.
A formal announcement of the deal is expected today. The deal between Quinlan Private and Eircom is the latest in a series of sale and lease back arrangements completed by large Irish com-panies, including AIB and Bank of Ireland.
The deal will result in an initial yield of over 4 per cent for Quinlan Private the investment vehicle led by former tax inspector Derek Quinlan. The yield refers to the return on the property a landlord can expect divided by the purchase price.
The new nine storey headquarters building, designed by Anthony Reddy Associates, has approximately 20,000 sq metres of office space and parking for over 190 cars. It lies alongside the Heuston South Quarter (HSQ)development which is currently under construction.
Jones Lang LaSalle sold the investment on behalf of Osprey Property Ltd, the property development arm of Eircom. Quinlan Private was advised by HT Meagher O'Reilly. The guide price for the building was €180 million.
Eircom is expected to use the proceeds of the sale to boost its investment plan which involves spending €1 billion over three years on broadband and its mobile subsidiary, Meteor. Its owners Babcock and Brown are determined to maintain Eircom's 74 per cent market share of the fixed-line market and through Meteor its 16 per cent share of the mobile market.
Thomas Dowd, a partner in Quinlan Private said the Eircom building was a quality asset with an established tenant in a developing location adjacent to excellent transport links and the developing HSQ city district. It is understood Quinlan beat off several private investment syndicates to pull off the deal.
Yields for commercial buildings in Dublin have varied in 2006.
Hibernian's purchase of the original AIB headquarters building in Ballsbridge for €170 million comes with a yield of 3.7 per cent.
Irish Life also settled for a similar return when it completed the purchase of a new office building at City Quay for around €72 million.
The Eircom headquarters adjoins an even larger development, Westgate, which is to be developed by the Galway developer Pádraig Rhatigan. Last year he paid €77.6 million for 8.2 acres which were owned by Eircom and the Office of Public Works.
