IFSC office block sale nets investors substantial profit

One of the original office blocks dating from the early 1990s in Dublin’s International Financial Services Centre has been sold at a substantial profit. Number 2 Harbourmaster Place, bought exactly two years ago by two investment groups for €37.85 million, has changed hands again at €53.75 million, showing an increased valuation of almost €16 million.

The beneficiaries were the Irish private investment managers Ardstone Capital and CBRE Global Investment Partners who sold the investment property to the long-term holder and core German investor Real IS in an off-market deal.

In spite of the near 30 per cent increase in the valuation, the new owner can bank on a net initial yield of 5.25 per cent and even more to come.

The current rent roll of

€2.45 million is due to rise to €2.93 million next year when a new lease kicks in for one of the tenants, KPMG. Under three new leases, rents will be rising to about €560 per sq m (€52 per sq ft). In addition to KPMG, other notable tenants include Wells Fargo, Kleinwort Benson, Bank of Montreal, Aspen reinsurance and United Health Group.

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The 5,668sq m (61,012sq ft) building close to the main entrance of the IFSC and Connolly Station was originally occupied by solicitors McCann FitzGerald who relocated to a new block in the south docklands in 2006. Many of the original buildings have been sold in recent years as long-term investors availed of the pick up in the market to offload assets on which they had been able to claim 100 per cent capital allowances over a 10-year period.

Since acquiring the former McCann FitzGerald building, Ardstone and CBRE Global carried out a number of improvements including a refurbishment of the entrance area, creating a new reception area and lift lobbies and providing a new roof covering and exterior landscaping. John Moran of JLL acted for Ardstone and Cushman & Wakefield advised Real IS.

Ardstone is also planning to sell another office building shortly at East Point Business Park in the Dublin docklands which is let to Virgin Media Ireland under a 25-year lease with a break option in 2020.

Agent JLL is guiding €12.5 million for the 4,645sq m (50,000sq ft) building which is under-rented at €647,276, reflecting a rental level of €129 per sq m (€12 per sq ft) and €700 for car-parking spaces.