Agent JLL is guiding a price of €24 million for Macken House, a fully occupied office investment in Dublin’s north docklands.
Located on Mayor Street Upper, and immediately adjacent to the Point stop on the Luas red line, the subject property which is owned and managed by Tetrarch ICAV on behalf of the ESB Pension Fund, comprises a modern six-storey building of 4,770sq m (51,347sq ft) with 42 basement car-parking spaces.
The first to fifth floors comprise office accommodation accessed through a ground-floor reception and are let to Italian luxury jewellery brand, Bulgari, and FM104 owner, the Wireless Group.
The ground floor includes an office unit of 1,454sq m (15,635sq ft) let to Virgin Media, along with two retail units with a total combined space of 345sq m (3,717sq ft) with direct street-level access to Mayor Street Upper. The retail space is fully leased to Insomnia and Mulligans Chemist.
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The property is generating a passing rent of just over €2 million a year with the three office leases accounting for almost 90 per cent of the total rent.
The regear of one of the office leases in 2023 as well as recent completion of market reviews on the other two office leases. Following various regears, Macken House now provides a weighted average unexpired lease term (WAULT) of 5.7 years to earliest break/ expiry.
The average rent of the offices stands at approximately €36 per sq ft which is substantially lower than recent office lettings in the immediate area.
While many of the office buildings in the International Financial Services Centre (IFSC) are now struggling to attract both occupiers and investors in the face of competition from the more environmentally sustainable properties developed over recent years in the north docklands and elsewhere, Tetrarch ICAV has positioned Macken House to respond to the latest market demands.
The property recently secured LEED O&M Gold certification and an updated B1 BER rating. There is also an identified pathway to achieve an A3 rating without significant capital investment and minimal tenant disruption.
Key sustainability achievements include the complete removal of gas from the property, installation of energy efficient air handling units with heat recovery, LED lighting upgrades, water conservation measures including recommissioned rainwater harvesting, and implementation of comprehensive waste management achieving a 75% waste diversion rate.
The landlord has also recently signed an agreement to ensure all electricity serving common areas will be sourced from fully renewable energy sources, further reducing the environmental impact of this building into the future.
Quite apart from the various ESG initiatives, the current owners have also carried out additional upgrades over recent years. These include a full upgrade of the reception, refurbishment of the bathrooms, addition of shower and changing facilities in the basement and the installation of secure bicycle parking.
The guide price of €24.5 million reflects an initial yield of approximately 7.5 per cent off the current passing rent, after standard purchaser’s costs of 9.96 per cent. The price represents a capital value of about €477 per sq ft.
Brian Shields, of JLL, said: “Macken House exemplifies the type of asset that investors are seeking in today’s market – a fully occupied, ESG-optimised office building in an established location with proven tenant commitment.
“The LEED Gold certification, B1 BER rating, and demonstrated tenant loyalty through recent lease regearing and capital investment make this an exceptionally attractive investment opportunity.”
