Private investors recruited by securities firm Cantor Fitzgerald are set to buy an interest in a €41 million office complex.
Cantor Fitzgerald is buying into four office blocks that are home to a variety of tenants in Carrickmines in Dublin's south suburbs that Park Developments is selling for €41 million.
The investment firm is buying the blocks on behalf of private clients and the move is designed to cash in on growing demand for offices in and around the capital.
Office rents are now running at around €50 to €60 per square foot in Dublin’s city centre, prompting interest in properties in the city’s suburbs, where landlords are seeking half those sums.
AIB recently agreed to pay €28 a square foot to Green Real Estate Investment Trust for a block in Central Park in Sandyford, where the bank intends to house about 500 support staff.
Commercial property in Dublin’s city centre was the first to benefit as the recession gave way to recovery. That impact has since spread to the suburbs, but rents there still lag the centre.
Cantor has a pool of up to 20,000 private clients looking to invest their personal wealth. It is understood that the firm will recruit several hundred of them for the Carrickmines deal.
According to its April Investment Journal, Cantor Fitzgerald hopes that they will get a return of up to 80 per cent on their money, if, as the company hopes, it sells the buildings on at a profit in five years time.
The company intends to distribute 4 to 5 per cent of its backers’ investment back to them every year.
A number of tenants have break clauses or their leases end over the next five years, allowing the landlords to negotiate rent increases during that time.
Tenants include a number of shops, such as an O'Brien's off licence and an AIB branch. Energy company Wind Prospect Ireland, manufacturer Pentair Valves and Controls, cosmetic surgeons, Venus Medical and multinational Getty Images are amongst the others renting space there.
The complex is close to the Cherrywood strategic development zone, where US multinational Hines and King Street Capital, along with other investors, plan to spend €2 billion building a suburb and town centre that will house 30,000 people.
Work began on that development, which will also house offices, in December last year. Hines formally launched it in February.
Cantor Fitzgerald took over Dolmen Stockbrokers in 2012. Led by chief executive, Ronan Reid, it is involved in stockbroking, advice and investment.
The company backed a number of house building projects last year in Cork and Dublin that are now completed. It is one of a large number of investors now looking for opportunities in the Republic’s property market.
* This article was edited on April 20th 2017