Office block to sell for €32m off peak

A MODERN office building off Shelbourne Road in Ballsbridge, Dublin 4, sold at the peak of the property bubble in April 2006 for a highly-inflated value of €47 million, is about to change hands again for a mere €15 million.

An international company with an Irish office is to avail of the 68 per cent fall in the value of Brooklawn House to buy it at a yield of 14 per cent - a far cry from the 3 per cent return agreed by D2 Property Management when it bought it six years ago from developers G & T Crampton.

Agents Savills are handling the current sale of the investment which is believed to have attracted interest from about 25 Irish and overseas individuals and groups.

D2, an investment company run by David Arnold and Deirdre Foley, sold Brooklawn House to a group of Irish investors and continued to manage it. Several other investments associated with D2 have also run into difficulties because of the economic recession and the banking crisis.

The five-storey over basement Ballsbridge block is being sold on the instructions of Kieran Wallace of KPMG who was appointed receiver to the Brooklawn Partnership by the Irish Bank Resolution Corporation which comprises the former Anglo Irish Bank and Irish Nationwide Building Society.

Though Brooklawn House is recognised as a high-quality building in a premier location, the fact that the various leases give tenants break options in 2015 and 2016 is considered a drawback for investors looking for long-term income. In addition, the building is also considered to be over-rented at €430 to €538 per sq m (€40 to €50 per sq ft).

Brooklawn is currently producing a rental income of almost €2.2 million from 4,190sq m (45,100sq ft) and 29 basement car parking spaces.

The investors in Brooklawn include one-time AIB chairman and former attorney general Dermot Gleeson; former Anglo chief executive Seán Fitzpatrick and his children, Jonathan, Sarah and David; senior counsel John Gordon of Monkstown, Dublin; Odearest Beds director Peter Crowley, of Monkstown, Dublin;former head of Bruce Shaw quantity surveyors Brendan O'Mara of Stillorgan, Dublin; Cormac McAlinden of the Lithographic printing group; Declan McCourt of the OHM motor group; Peter Small of Dublin 4, and Patrick Mooney of Enfield, Co Meath.

Brooklawn Property Holding Co Ltd sold the building to the mortgage holders, according to Registry of Deeds documents.

One of the original tenants in Brooklawn House, Citibank Europe, has sublet two floors to Eirgrid, the State-owned electric power transmission operator, and Ezetop, an international company that allows people living abroad to top up the moblile phones of friends and family back home. A third floor held by Citibank is currently vacant. The Higher Education Authority and IG International Management, which provides fund raising services, occupy the remainder of the space.

Brooklawn is one of three blocks developed by Crampton on their own grounds off Shelbourne Road in the mid-1990s.

The other two were sold at the time to the ESB Pension Fund which let them to Iona Technologies, now trading as Progress Software.