Dublin Docklands: The decision by major Belgian company Fortis to move to the docklands in 2007 is a breakthrough. Jack Fagan reports
Ireland's largest and most ambitious urban development planned for Spencer Dock in the Dublin docklands is to get a major shot in the arm with a commitment by Fortis, the large Belgian financial service provider, to relocate its Irish operation there in 2007.
The company has apparently agreed rental terms for up to 9,290 sq m (100,000 sq ft), making it the second firm to opt for Spencer Dock.
Three years ago PricewaterhouseCoopers signed off on a deal to lease around 18,580 sq m (200,000 sq ft) in the planned development which will eventually have more than 278,709 sq m (3 million sq ft) of offices, 3,000 apartments and a whole range of shopping and leisure facilities. The 51-acre site targeted to become a new quarter in the city is located half way between the Point Depot and the IFSC.
Although the promoting syndicate headed by Treasury Holdings was behind schedule in getting its major funding in place, moving its construction team on to the site and landing its second major office tenant, agents specialising in the office market believe that the transaction with Fortis could mark a breakthrough in the letting programme.
Some years ago Treasury also had a dream start when it negotiated the all-time record letting of 23,503 sq m (253,000 sq ft) at Central Park in Sandyford to Eircell. However, it took a considerable time before the second high profile tenant came aboard but, when First Active moved in, it was quickly followed by a stream of tenants including Merrill Lynch, ABN Ambro, Tullow Oil and Esso.
Though the precise letting terms agreed with Fortis have not been disclosed, the banking and insurance firm is likely to be paying over €40 per sq ft (€430 per sq m) with several concessions including a rent-free period of at least two years.
The company is likely to move into Kilmore House, one of a large number of office buildings planned for the site.
Rents in new buildings under construction on the south side of the docks have been doing considerably better, renting at around €46 per sq ft (€495 per sq m), to reflect the superior location. Almost certainly, Treasury will also have to take responsibility for Fortis's present lease of xxxx sq in Custom House Plaza in the IFSC. The lease has another xxx years to run.
Fortis is one of Europe's biggest financial institutions with a market capitalisation of almost €25m ?? and over 52,000 employees.
Treasury has the distinct advantage of having few holding charges as the Spencer Dock land is mainly owned by one of its partners, CIÉ. The sharing of revenue does not kick in until the offices are producing rental income.
In the meantime, xxxxxx. of the apartments have been pre-booked from plans though the figure would have been considerably higher if the building programme had started on time.
For many of the buyers, the prices paid may well turn out to have been good value as apartment prices in good locations continue to rise. By the time Spencer Dock is ready to move into, the prices may well seem on the cheap side.
