Upper Hatch Street office is centrepiece of €49.5m portfolio

A top grade office building occupied by Deloitte & Touche at 1 Upper Hatch Street, Dublin 2, is the centrepiece of a portfolio of four commercial properties to be offered for sale from today at a guide price of over €49.5 million.

Agents BNP Paribas Real Estate are handling the sale of The Magellan Portfolio which is producing a rent roll of €2,432,246, and will provide the purchaser with a net initial yield of 4.70 per cent. The portfolio was carefully assembled by a Dutch international investor who has been active in the Dublin market for over 25 years.

Kenneth Rouse, head of investment and finance at BNP, is to offer the four properties for sale in one lot to include an exceptionally fine logistics building at Fonthill Business Park, Dublin 22; a retail and office building in Stillorgan, and a smaller logistics building with an additional site at Swords Business Park.

The eight-storey over-basement office block in Upper Hatch Street is currently producing a rental income of €1,434,297 from 2,752sq m (29,622sq ft) and 13 car parking spaces. Deloitte & Touche occupy all floors except the fourth level which is rented by the US company H&R Block Tax Services LLC at €382 per sq m (€35.50 per sq ft). The next rent review on this floor has been set for October 2018.

Deloitte are paying an average of €554 per sq m (€51.50 per sq ft) under three upwards-only leases which are due to be reviewed in December 2016, and March 2017. Similar office space in the city centre is now attracting rents of €613 to €624 per sq m (€57/€58 per sq ft). The block has a weighted average unexpired lease term of 12.41 years, and adjoins 3 Park Place where Clancourt is presently developing a high-volume office building extending to 12,017sq m (129,346sq ft).

Logistics building

BNP is describing Unit 21 in Fonthill Business Park as “possibly the best HQ logistics building in the country”. The well designed block was developed by Green Property adjacent to Liffey Valley Shopping Centre and is let to

United Drug

Plc on a 10-year lease from June 2013. The lease provides for the current rent of €500,000 per annum to be stepped up to a maximum of €700,000.

The building has a gross external area of 7,816sq m (84,129sq ft) including a 5,243sq m (56,434sq ft) warehouse accommodation and third-generation offices extending to 2,377sq m (25,586sq ft). There is full planning permission and fire certification for the warehouse to be extended by a further 636sq m (6,845sq ft). The site includes a substantial car park.

The third element of the sale is a mixed-use retail and office investment known as Maple House directly opposite Stillorgan Shopping Centre. The ground floor retail unit extending to 390sq m (4,200sq ft) is let to KBC Bank Ireland on a 35-year lease from 1994. Office suites on the first and second floor of 721sq m (7,760sq ft) were recently refurbished but are currently vacant. The site includes 19 private parking spaces.

Motorway

The portfolio also includes Unit 2, a logistics building with extensive frontage on to the Dublin-Belfast motorway at Swords Business Park. The building incorporates a 1,672sq m (17,997sq ft) of warehouse space and 639sq m (6,878sq ft) of offices which are let to DVS Roads Ltd under a 25-year lease from 1997 at a rent of €280,000 per annum. The sale includes an adjoining site which would facilitate a further 2,800sq m (30,138sq ft) extension of the warehouse.

BNP estimates that the four properties have rental value of €2.9 million because of the opportunities to increase rents in Hatch Street, Fonthill and Maple House, together with the letting of the vacant offices in Stillorgan.

Kenneth Rouse said it was rare enough to come across a portfolio sale “offering such high-quality assets and a mix of prime offices and logistics with upside in terms of rental income going forward”.