Irish property group Marlet and M&G Investments have engaged estate agent CBRE to sell a large new office block that they are developing on the site of a former An Post sorting depot in Dublin's south docklands.
CBRE is seeking €152.8 million for The Sorting Office, a development comprising 203,700 square feet of offices over eight levels, with 26 car parking spaces and room for 318 bicycles.
This equates to €750 per square foot on the basis of vacant possession. However, CBRE and Marlet expect a number of letting agreements to be signed before the sale is completed, which is likely to push the purchase price up.
The sale will represent a significant return for Marlet and M&G. The site was acquired from An Post two years ago in a deal valued at €40 million.
Designed by Henry J Lyons architects, the development is located on the corner of Cardiff Lane and Hanover Street East, directly opposite the Bord Gáis Energy Theatre.
Dublin-based Marlet Property Group was founded by Pat Crean and is focused on commercial and residential developments. To date, Marlet has acquired 45 sites in Dublin that could accommodate more than 4,000 residential units and about 650,000 sq feet of commercial space.
In 2014, Marlet signed an exclusive funding agreement with M&G Investments, which has seen total investment to date of just under €500 million. M&G is a leading investment manager and employs more than 1,500 people across Europe and Asia.
Johnny Horgan, executive director of CBRE's capital markets unit described The Sorting Office as an "excellent opportunity" for investors.
Ideal purchase
“We believe this development fits the criteria for many investors seeking to expand their central business district office portfolios and also is an ideal purchase for new entrants to the Irish market,” he said.
In a new research report to be published today, CBRE says some €492 million of investment sales were completed in the first quarter of this year, with up to €1 billion of transactions “currently in play and several assets being prepared for sale which suggests a relatively healthy volume of transactional activity will be recorded in 2017”.
Up to €250 million in hotel sales are expected this year. CBRE said the sales of the Connemara Coast Hotel in Galway, the Knightsbrook in Trim, and the Athlone Springs Hotel were expected to close shortly.
Four Dublin pubs traded in the first six months of 2017, totalling just under €5 million between them. CBRE said a further 14 pubs were at contract signed or sale agreed, with a combined value of about €18.5 million.
Prime office rents in Dublin are currently running at €62.50 per sq foot with yields at 4.65 per cent.
Marie Hunt, CBRE Ireland's executive director and head of research, said a "large volume" of deals were underway in all sectors of the market.
“Despite continued uncertainty around Brexit, it is encouraging that activity has continued at pace in all sectors,” she said.
