Nama to sell €90 million docklands office building

A seven-storey Dublin docklands office block, with tenants including the Central Bank and the British building society Nationwide, will be brought to market by Nama next week with a guide price in excess of €90 million.

The Block R building on Spencer Dock, developed by Treasury Holdings, is situated behind the Convention Centre on the north side of the Liffey, adjacent to the city’s burgeoning financial and business district.

With the exception of Nationwide, the building is fully let to State tenants. The Commissioners of Public Work last year signed a 20-year lease for 55,000sq ft (5,110sq m) of office space at €28.50 per sq ft, or an annual rent of almost €1.6 million. The lease has a break clause after year 12.

Following that deal, the Central bank will be joined on the tenant list by other State bodies including the Office of the Comptroller and Auditor General, the Office of Government Procurement, and the Office of the Government Chief Information Officer.

The 11,798sq m (127,000sq ft) building, designed by Scott Tallon Walker architects, comprises seven stories over a basement with 46 parking spaces and three ground-floor retail unit shells. The total annual rent roll is almost €4.9 million. More than 40 per cent of the building is let at €30 per sq ft.

Treasury completed Block R in 2008, shortly before the crash. It sold a 62 per cent interest in the building to two geared property funds owned by IBRC Assurance, which paid €66.3 million plus costs of €2.7 million. That deal was financed by a €52 million non-recourse loan from IBRC.

The building was initially 51 per cent let to Nationwide and the Central Bank on 25-year terms, with break options after year 15. The bank is currently awaiting the completion of its nearby new headquarters, to where it will relocate from Dame Street. The institution is paying €3 million for its accommodation, or €46 per sq ft.

Block R is being marketed by joint agents Savills and CBRE. Fergus O’Farrell of Savills predicted the State-dominated tenant list will drive interest, while CBRE’s Johnny Hogan cited Irish and international institutional investors as likely bidders.

The Spencer Dock area is likely to be a hotbed for new development in coming years. Oxley, a Singapore-listed property fund, and Sean Mulryan’s Ballymore recently acquired a large site there via Nama’s Project Wave. It is to be used for 600,000sq ft (55,741sq m) of offices and 200 apartments.

Nearby are the headquarters of PriceWaterHouse Coopers, A&L Goodbody solicitors and Credit Suisse.