A wide range of Irish and international investors are expected to express an interest in the sale of the Irish headquarters of Allianz at Elmpark Green in Dublin 4.
Agent TWM is guiding a price of €50 million for Allianz House, offering the buyer the opportunity to secure a net initial yield of 5.35 per cent (assuming standard purchaser’s costs of 8.46 per cent).
The guide price should prove particularly attractive to prospective purchasers given that the vendor, Aberdeen Standard (formerly Standard Life), paid €58 million to acquire the property from Starwood Capital Group in 2016.
Allianz House is an eight-storey office building extending to 8,000sq m (86,000sq ft). The property is fully let to Allianz on a 31-year full repairing and insuring (FRI) lease from January 2008 with a tenant break option in December 2033. The annual rent is €2.9million with five-yearly rent reviews from 2019 in line with the consumer price index (CPI). There is a cap-and-collar provision on the rent of -0.5 per cent/3.5 per cent for each five- year interval.
Allianz is part of Allianz SE Group, one of the world’s leading integrated financial services providers, which employs more than 148,000 people worldwide. Allianz has an excellent Dun & Bradstreet credit rating of 5A 1 based on a tangible net worth of about €375 million, an annual turnover of about €277 million and a net profit of €33.4 million. In 2018, Allianz SE Group reported an operating profit of €11.5 billion.
Michele Jackson of TWM expects “good interest” in Allianz House given the strong tenant covenant offered by Allianz and the 14.25 years of income remaining until the break option.
She says: “Investors looking for both security and yield have limited options in other capital markets at the moment. With 10-year Irish bond yields dipping below 0 per cent, the 5.35 per cent net initial yield on offer here should attract both international and domestic buyers.”
Allianz House occupies a high-profile location at Elmpark Green within the wider Elmpark campus on Dublin's Merrion Road.
Built in 2007 at an overall cost of €550 million by developers Bernard McNamara, Jeremiah O'Reilly and the late David Courtney, the 17.3-acre mixed-use scheme is home to corporate tenants such as Novartis and Willis Tower Watson along with residential and leisure uses.
The complex benefits from numerous local amenities including retail at Merrion, Blackrock and Frascati shopping centres and educational facilities at UCD in Belfield. In terms of public transport, the complex is within a short walk of Booterstown and Sydney Parade Dart stations.
Elmpark was acquired in its entirety by Starwood, for €184.3 million in 2016. Having secured ownership, the US-headquartered real estate investor moved to sell its interest in 201 apartments at the Dublin 4 complex to Ires Reit for €59 million, before selling Allianz House to its current owners, Standard Life, shortly after.