Ardstone Capital flips D4 block for tidy profit

The Dublin-based private investment manager Ardstone Capital has chalked up a handsome profit on a small office building in Ballsbridge, Dublin 4, after striking a deal with AIB to allow it surrender its long term lease of the premises.

Ardstone originally bought the four-storey modern block at 85 Pembroke Road about 12 months ago for €4.75 million. The 875sq m (9,410sq ft) building was then occupied by AIB Capital Markets on a lease which then had a further 11 years to run.

The annual rent of €345,000 was subject to upwards-only reviews every five years. Ardstone agreed a surrender of the lease in return for compensation of close to €3 million.

The investment manager then planned to refurbish the building and relet it but, after being approached by a number of potential buyers, decided to put it back on the market.

Shane Duffy of BNP Paribas Real Estate originally sought offers over €4 million and finally sold it to Finance Ireland, a privately owned financial services group, for €4.65 million – €100,000 less than it was originally bought for. The AIB transaction made all the difference.

Since then Ardstone, along with CBRE Global Multi Manager, has gone on to purchase one of the key retail blocks in Temple Bar – it includes the Elephant & Castle restaurant – for €8.26 million (well above the €7.8 million asking price). The initial yield will be 6.15 per cent.

Savills and DTZ Sherry FitzGerald handled the sale for Bank of Scotland (Ireland) which is disposing of a number of distressed assets held by Treasury Holdings before it was wound up in 2011.

The 12 retail premises which form part of Crampton Buildings are producing a rent roll of €583,000.

The best known tenant, Elephant & Castle, is paying a rent of €160,000, Gallagher's Boxty House contributes €120,000 for a slightly smaller premises while the other tenants include Abrakebabra (€65,000), Gondola (€58,000), Pablo Picante (€50,000), Forbidden Planet (€45,000), Mark Cheung (€40,000), Eden Recruitment (€30,000) and Irish Citylink (€15,000).

Crampton Buildings were developed by Dublin Artisan Dwellings in the 1890s and consists of a three-storey over basement block with retail and restaurant use at ground and basement levels.

The apartments on the two upper floors were acquired in the 1990s by Dublin City Council and are currently being refurbished.