€65m paid for D2 offices

New York-based investment giant, King Street Capital, has completed contracts to buy a substantial office investment in Dublin city centre for €65 million. The deal will show an income return of 9.5 per cent.

Savills had been seeking €70 million for Bishop’s Square, an 11-year-old office block with access on to Kevin Street and Bishop Street, which has led to the dissolution of a partnership between the property pension fund Iput and developer Bernard McNamara whose main property businesses are in receivership.

Iput paid €45 million in 2003 for a 50 per cent stake in the 14,263sq m (153,539sq ft) office complex. Last year the fund negotiated an exit strategy with Declan McDonald of PwC who was appointed receiver over the remaining shareholding by Ulster Bank.

Savills handled the sale of the six-storey building which attracted considerable interest from Irish property funds as well as a range of overseas investors not only because of its art deco fit-out but also because 70 per cent of the rent roll was guaranteed by State agencies for the next nine years.

Deal expected

State Street Bank, contracted to pay a rent of €1,484,000 until 2016 even though it has relocated to a new headquarters in the south Dublin dockland, is expected to strike a deal with the new owners that will allow the vacant space – 3,058sq m (32,916sq ft) – to be relet. News International, publishers of the Sunday Times and the Sun, recently renewed its lease at €296 per sq m (€27.50 per sq ft).

Average floor plates in the building extend to 3,000sq m (32,292) though the penthouse levels vary between 1,100 and 1,500sq m (11,840 and 16,146sq ft). Unusually there are double service cores within the building to facilitate multiple lettings.