A combination of secure rental income and long-term redevelopment potential is expected to see significant interest in the sale of the offices at 84-93 Lower Mount Street.
Located at the heart of Dublin’s traditional central business district, the building is being offered to the market on behalf of UK property company Henderson Park Capital at a guide price of €36 million.
The subject property comprises 4,605sq m (49,569ft) of office accommodation over lower ground, ground and three upper floors and has been let in its entirety to the Office of Public Works (OPW) on behalf of the Revenue Commissioners since February 1981. While the OPW’s original agreement had been due to expire, it was extended recently for a further 10-year period to June 2031, with a tenant break option in June 2028. The passing rent equates to a relatively modest level of €34.95 per sq ft offering the buyer a net initial yield of 4.60 per cent after standard purchaser’s costs, excluding car parking.
While intending purchasers will be drawn by the prospect of securing immediate rental income guaranteed by the State, the building has significant redevelopment potential in the longer term.
Opportunity
A feasibility study prepared for the sale by architects Henry J Lyons suggests the existing building could be demolished and replaced by a part five, part six and part seven-storey development extending to a gross floor area of 9,931sq m (106,896 sq ft).
Fergus O’Farrell of Savills says: “This sale presents an opportunity to acquire a prime office investment with State income and exciting long-term redevelopment potential.”
Henderson Park Capital acquired 84-93 Lower Mount Street in 2019 as part of its €1.34 billion buyout of Green Reit. The sale of the property comes as part of the company’s wider, ongoing programme of asset disposals and investment in the Irish market.
Last year and at the height of the Covid-19 pandemic, the UK-headquartered investor secured a total of €154 million from the disposal of two assets in the Capital Collection, a portfolio of five prime Dublin offices being sold on it behalf by Eastdil Secured.
In the first instance, Henderson Park secured €94 million from German investor, KGAL, for the Dublin headquarters of the EBS Building Society at 2 Burlington Road. The second deal saw the German real estate fund manager, KanAm Grund, pay about €60 million for 30-33 Molesworth Street.
The Capital Collection’s other assets include One Molesworth Street, 5 Harcourt Road and Fitzwilliam Hall.
