Bank of Ireland is availing of the buoyant market to offload another distressed office investment in Dublin's International Financial Services Centre.
Adrian Truick of Knight Frank is guiding €15.5 million for the 1999-built block at 6 George's Dock which was originally acquired by a group of Irish investors for €37 million.
The bank has appointed receiver Tom Kavanagh of Kavanaghfennell Partners to handle the sale of the partially let third generation building which will be of interest to both Irish and overseas investors.
The investment is currently producing a rental income of €914,000 per annum from five international tenants. In addition there are two floors available to let and once tenants have been found, the overall rent roll is likely to rise to at least €1.4 million.
Fully let, the yield will be around 8.7 per cent compared to 5.6 per cent at present. The guide price of €15.5 million equates to a capital value of €3,412 per sq m (€317 per sq ft).
Truick says that with four of the five current tenants in the high growth aviation and technology sectors the rental income was secure and the prospects for further rental and capital growth in what was a modern, high quality building were highly encouraging.
All five lettings date from earlier this year and unlike many of the other recent investment sales, the passing rents in this case are set at a particularly low base.
The average rent is only €263 per sq m (€24.50 per sq ft) whereas many other recent lettings in the city are at or above €323 per sq m (€30 per sq ft). Statoil was paying €475 per sq m (€44 per sq ft) when it occupied the block until its lease ran out late last year.
The largest occupier now, Corvil, is a major provider of application and network latency management solutions to global financial markets including NASDAQ, Reuters and the Tokyo Stock Exchance.The company occupies 902sq m (9,711sq ft) and accounts for a high proportion of the rental income – €265,347. The lease runs until 2023 but includes a break option in 2016.
The fourth floor, extending to 813sq m (8,756sq ft), is rented by Interactive Data at a rent of €233,304 per annum. Interactive Data Corporation is based in Bedford, Massachusetts, and has over 2,500 employees worldwide.
The company is a leading supplier of financial information and has thousands of subscribers, including financial institutions and active traders as well as software and service providers.
Airbus Financial Services, which pays a rent of €205,650 for the lease of the fifth floor, manages a $5 billion fleet of Airbus 321 aircraft. The lease runs until 2023 but it has a break option in 2018.
Equally interesting is the ground floor tenant, Eurocopter International Services, a leading helicopter manufacturer, which operates a customer technical support centre because of the availability of technical and multi-lingual staff in Dublin.
Also sharing the ground floor is the Belfius Bank, a Belgian bank and assurance group which was previously known as Dexia Bank. It has been in the IFSC since 1989.
The six-storey block with a basement car park is fitted out to a third generation specification including raised access floors, suspended ceilings with recessed lighting and fully furnished lobbies and toilets. It has an impressive double height entrance foyer with polished granite floor and wall finishes. The L-shaped building with a central core means that floor plates can be easily sub-divided.
Knight Frank says there is potential to provide additional floor space at plant room level.