ANOTHER opportunity for private investors arises next month when the headquarters building of Bord Iascaigh Mhara (BIM), overlooking Dun Laoghaire harbour, is to be sold by auction on November 6th.
Finnegan Menton is quoting a guide price of £4 million for the six-storey block, which is currently producing a rent roll of £322,000 per annum. The 35-year lease of the 37,000-square-foot building and 35 car-parking spaces has another 20 years to run.
The decision to offer the investment for sale by auction rather than by the more usual methods of tendering or private treaty is a further indication of the strength of the investment market.
Private investors have been particularly active over the past year, especially where properties offer security of income over a long period. In the past two years, many of the private investors in the market have formed consortiums to buy properties, sometimes using them as pension funds. With banks now offering fixed rates for five years and 10 years at historically low levels - some banks are apparently making five-year funds available to its top customers at.around 7.25 per cent - private investors will obviously see an opportunity to commit a relatively small amount to the BIM block and allow the rent to cover the repayments.
John Finnegan of Finnegan Menton says the major deciding factors in any investment property are yield, security of income and potential for growth. This particular investment scores extremely well in all categories."
With the current rent of the building, due for immediate review, investors will have to take a view as to what level of increase they can expect. The current rent of £322.000 breaks back at £8.45 per square foot and £500 per car space. The vendors are obviously hoping to secure a significant increase because of the upward movement of rents in the area and the number of developments under way.
In a recent rent review at the nearby Adelphi Centre, telecommunications group Ericsson had its rent of a 33,000-square-foot block increased from £10 to £11 per square foot. Car-parking spaces went from £509 to £750 per annum. Ericsson is already paying £12.30 per square, foot for a 14,000-square-foot building in the same complex.
Close to the BIM block, Cosgrave is completing work on Clearwater Cove, a large development of apartments, where units sold for an average of £160 per square foot. Cosgrave is also planning to develop an office park, the West Pier Business Campus, next door, where about 48,000 square feet will be available at £14 per square foot.
There is a range of other developments planned for adjoining sites including a hotel on the old Tedcastle site, civic offices for Dun Laoghaire Rathdown County Council and a mixed apartment, theatre, bowling alley and car-park on the former Pavilion site. A short distance away, Monarch Properties is developing a new shopping centre, Bloonfields, where Quinnsworth is investing £10 million in a new-style anchor store aimed at the top end of the food market. The centre, located on a former convent site, is expected to open for business next caster.
