€37.5 million for landmark D4 block

WITH THE SALE of two substantial Dublin office investments due to be completed in the coming weeks, another high value investment opportunity is being launched today with the planned sale of St Martin’s House at Waterloo Road in Dublin 4.

Domhnaill O’Sullivan of Savills is seeking €37.5 million for the landmark block which, if sold at that price, will show a net initial yield of 9.1 per cent. The rent roll is €3.56 million.

With the Irish banks largely out of the investment market because of a shortage of funds, the likelihood is that the property will be bought by an overseas group anxious to avail of the much reduced property values.

Similarly, two UK companies are currently wrapping up the purchase of the Bord Gáis offices at 1 Warrington Place for around €27 million and another new office block occupied mainly by Bank of New York Mellon in the South Dublin docklands for around €35 million. The Warrington Place block is expected to show a return of 7.5 per cent while the docklands investment will have a net yield of 8.2 per cent.

The Waterloo Road investment is being sold by FC Reit Asset Management (formerly Friends First) which is also hoping to dispose of a retail building on Grafton Street (see story on page 6). Des Dennehy of the fund says the sale of the office block will release capital from a mature asset and allow them to take advantage of new investment opportunities.

Unlike the two other office investments, St Martin’s House dates from the 1970s but is in particularly good condition after being remodelled and refurbished towards the end of the 1990s. The provision of lobbies on each upper floor allows the flexibility needed to accommodate multiple tenants.

The block stands five storeys over a ground floor largely in retail use.

A central reception area is serviced by a lobby and two lifts and there is also a second entrance to the lower ground floor to facilitate self-contained office suites.

St Martin’s House is thought to be the only office building in the city with a running track on the roof. The block has an overall floor area of 7,030sq m (75,674sq ft) with office space accounting for 6,054sq m (65,073sq ft) and retail accommodation totalling 985sq m (10,601sq ft).

A two-tier car park to the rear has 156 car-parking spaces – a ratio of one car per 485sq ft, compared to new office buildings which generally have a ratio of one space per 3,000sq ft.

Most of the office space is shared between the National Roads Authority, the Mental Health Commission and Truvo Ireland, publishers of the Golden Pages. The lease held by the National Roads Authority runs until 2016 while the other main tenants have leases extending to 2022.

In all three cases the rents are on the high side, varying from €502 per sq m (€46.66 per sq ft) to €532 per sq m (€49.48 per sq ft). Even more surprisingly, the highest rents in the building at €538 per sq m (€50 per sq ft) are being paid by commercial property agent Spain Courtney Doyle for 668sq m (7,200sq ft).

That is also higher than the rents being charged on the retail units where the main tenants are Xtra-Vision, Eddie Rockets and Xeon Dental Services.

AIB pays an annual licence fee of €14,000 for its ATM machine.