Independent House may make €6m

THE FUTURE of Independent House on Dublin’s Middle Abbey Street is likely to be determined this autumn if a buyer is found for the 1920s building when it is offered for sale on behalf of receiver Cormac O’Connor of KPMG. Estate agent Savills is acting as asset manager for the property.

The landmark building was to have formed part of the “Northern Quarter” retail district planned by Arnotts before the department store was taken over by the banks in 2010.

Independent House was INM’s main office and printing works up to 2003 when it was sold in an off-market deal for € 26 million to a company headed by property developer Paddy Kelly and businessman Niall McFadden. Mr Kelly is understood to have acquired a 40 per cent stake in the building.

Although a company controlled by Arnotts also held 50.1 per cent of the voting rights in Independent House, management at the department store apparently treated the arrangement as a joint venture rather than a shareholding.

Arnotts only recognised its share of income or expenditure attributable to the joint venture rather than having the asset on its books.

In any event, the acquisition of the old newspaper block was banked with Anglo Irish Bank on a “without recourse” basis with a view to the debt being paid down by the earnings and value derived from the property as part of the proposed Northern Quarter.

That ambitious project with an estimated cost of €750 million is unlikely to proceed in the foreseeable future.

Arnotts was reported to have spent at least €100 million in acquiring all the properties on the 5.5-acre site, which stretched from Henry Street to Middle Abbey Street and from Penneys on O’Connell Street to Liffey Street.

An Bord Pleanála cleared the way for the “Northern Quarter” in July, 2008, and approved of a plan to develop a 149-bedroom hotel on the site of Independent House. However, the board specified that all works to the building, a protected structure, “shall be carried out in accordance with best conservation practice” as detailed in the Department of the Environment’s guidelines.

An estate agent familiar with the block says that while the façade must be retained, the five-storey “collection” of buildings at the rear – including a multiple storey void that once accommodated a printing works – will have to be demolished to make way for a new 112,148sq m (120,000sq ft) development.

The most likely option will be to provide retail facilities on the lower floors and a hotel or student accommodation overhead. The building also has a substantial frontage on to Prince’s Street (at present a cul-de-sac beside the GPO) which under the Arnotts masterplan was due to be linked up by a new street with Henry Street.

A leading commercial agent has estimated that Independent House is unlikely to make much more than €6 million in the present climate because of the difficult economic backdrop and the banking crisis.