Former grain store on South Princes Street sells for €3.9m

The increasing tendency by small high-tech companies moving to Dublin to look for ancient buildings with exposed brick walls and industrial features has prompted a private investor to pay over the odds for a former grain store at South Princes Street in the Dublin Docklands.

The purchaser has paid €3.9 million – a full €900,000 above the guide price – for the six-storey building which was refurbished and extended in 2002 to provide 1,161sq m (12,500sq ft) of office accommodation. Nicholas Corson of Finnegan Menton handled the sale of the investment, which will show an immediate return of 6.3 per cent, rising to 6.7 per cent when the stepped rents apply in June2017.

The main tenant, online gaming developer Digit Game Studios, occupies three of the floors, while the remaining space is shared by Avago Technologies and Cellusys. The current rent of €256,000 is due to rise to €271,000 in 2017.

Scott Colley of agents Murphy Mulhall, who advised the purchaser, said not only was the investment under-rented and reversionary but the office space itself was exactly what the latest wave of high-tech occupiers were looking for. Conventional design was no longer the requirement of the high-tech sector which preferred exposed brick walls, winding air conducting above their heads and "warehouse chic".

The same purchaser, advised by Murphy Mulhall, also acquired 1-3 Cardiff Lane, a small retail unit opposite Facebook’s new European headquarters for €600,000. It will show a return of 6.4 per cent after standard costs.