Irish Life has paid £11.5 million for two new office buildings let to leading companies in Belfield Office Campus, at Clonskeagh, in Dublin 14. The deal comes in the same week the company is selling 12 industrial units Airways Industrial Estate, beside Dublin Airport. They are likely to make over £11 million.
The two transactions are part of a drive by Irish Life to promote its new Property Investment Fund 111. Sean O'Brien of Irish Life says the launch of the fund is motivated in part by the terrific performance of property as an investment vehicle and in part by the growing dismay of investors at the pitiful returns they are getting from savings in banks and building societies. When it launched the fund earlier this year, Irish Life set a target of £35 million for the fund in 1999. The response has been much stronger than expected and the fund is now heading for £60 million.
Mr O'Brien said one of the things Irish Life was doing to support the fund was to increase the value of properties in which it invests. The company was also updating the portfolio by buying in new, modern office blocks and retail units and disposing of some of the older stock. The implication was that it would be doing more of this in the coming months.
Clearly, the success was likely to invite other fund managers to do a similar fund exercise.
Gunne is to handle the sale of the 12 units in the Airways Industrial Estate, which are currently producing a rental income of £700,000. The tenants include Telecom Eireann, DHL, Team Aer Lingus and Devtech. The portfolio is for sale in its entirety or in individual lots. Three of the buildings have a floor area of 42,000 sq ft, while the others range from 4,500 sq ft to 9,000 sq ft. There is scope for increasing the rents at the next reviews, which are due to take place mainly in the years 2000 to 2001.
Irish Life paid £11.5 million for two newly developed office blocks at Belfield Office Park. Letting terms for the two buildings have been agreed with Eircell and the Office of Public Works on behalf of the European Veterinary Office. Rents in both cases are close to £17 per sq ft. The anchor tenant in the park is Compaq, which uses its buildings as its European headquarters.
Irish Life has been particularly active in the Dublin property market over the past six months buying mainly offices and retail units. It has paid £7 million for a 30,000 sq ft block at Eastpoint, in the Dublin docklands, which is let to Telecom Eireann at a rent of £13 per sq ft. It also bought two provincial retail portfolios for around £10 million and a 5,000 sq ft fashion shop in Trinity Street, in Dublin's city centre, for over £1 million. This 5,000 sq ft shop was sold by a company headed by businessman Barry Boland.
Irish Life has also pre-funded new industrial buildings at Citywest for around £18 million, deals which are showing a return of more than 8 per cent.
In a separate sale, Palmer McCormack expects to secure in excess of £3.5 million for a modern office building at 32 Molesworth Street, Dublin 2. The tenants, Hamilton Osborne King, are paying a rent of £116,000 for the 11,000 sq ft building and four car-parking spaces. The next rent review is due in August, 2000.
