Hibernia Reit sells Chancery building for €23.8m

Commercial property group Hibernia Reit has sold the Chancery building in Dublin for €23.8 million, the company announced on Tuesday.

The sum equates to a blended net initial yield of 5.9 per cent and a capital value of €645 per square foot for the office accommodation.

The property is located on Chancery Lane close to Dublin Castle in central Dublin and comprises 35,000 sq ft of offices and four two-bed apartments.

It is fully let to tenants including the Office of Public Works, Wella and Analytic Partners, producing rental income of €1.5 million per annum.

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Hibernia purchased the Chancery together with a 0.05 acre site in May 2014 for €16 million via a secured loan acquisition. The price represented a blended net initial yield of 6.8 per cent and a capital value of €445 per square foot.

Since then, Hibernia has extended the weighted average unexpired lease term of the office tenants from two years to eight years. The sale price of €23.8 million is more than 1.3 per cent ahead of the September 2017 valuation.

Hibernia Reit chief investment officer Richard Ball said the sale would allow the company to work on other projects.

“The Chancery was one of our early purchases in 2014 via a secured loan acquisition,” he said.

“Since then the building has performed strongly due to the attractive purchase price, our leasing activity and the market recovery. This sale allows us to recycle our capital into new projects.”