Insurance company to move its HQ to Dundrum

With an oversupply of suburban offices, Royal and SunAlliance played one developer off against another to make a substantial saving on its rent bill ahead of its move from Dublin 2 to Dundrum in June 2008, writes Jack Fagan

The owners of Dundrum Town Centre have agreed terms to let an office block to a leading insurance company after intense competition with several Dublin suburban developers.

Royal and SunAlliance will be vacating three office buildings in Dawson Street and South Frederick Street when it relocates to Castlethorn's 6,284sq m (67,640sq ft) block beside the successful shopping centre.

With a substantial oversupply of office space already in the suburbs and even more in the pipeline, the insurance company approached the developers of several available schemes seeking major concessions including a rent-free period of two years, a break option and a contribution towards fit-out.

Developer Liam Carroll was the runner up for the business after apparently offering a new office building at Cherrywood at a rent of around €182 per sq m (€17 per sq ft), as well as the full 24-month rent-free period.

Other developments believed to have been shortlisted were The Park in Carrickmines, Red Oak House in Leopardstown, as well as a development in Tallaght.

In the end the insurance company settled for Dundrum at a rent of €269 per sq m (€25 per sq ft) with an 18 month rent-free period as wellas a break option in year 10 of the 25-year lease.

Royal and SunAlliance stands to make a substantial saving on its rent bill when it moves to Dundrum in June 2008.

Rents in the city are roughly double those in the suburbs.

The choice of Dundrum was also helped by its easy accessibility by Luas, and the fact that its broad range of facilities "best measure up to what staff are accustomed to in the city centre", according to one source.

Fionnuala O'Buachalla of Jones Lang LaSalle advised the insurance company while Roland O'Connell of Savills Hamilton Osborne King and Thomas Carthy of Atis Real advised Castlethorn.