Investors seek €395m from sale of stake in Facebook’s Dublin 4 HQ

Cushman & Wakefield bring four blocks at tech giant’s Ballsbridge campus to market

The much-anticipated sale of a substantial part of Facebook’s new European headquarters in Ballsbridge, has been formally announced with a guide price in excess of €395 million.

The sale of the stake on behalf of the Serpentine consortium, a syndicate of private individuals and companies assembled by AIB private banking and Goodbody Stockbrokers, is expected to attract significant interest from international investors.

The consortium’s decision to dispose of its interest in the Dublin 4 campus was first reported by The Irish Times last February.

The investment comprises 31,536 square metres (339,456 sq ft) of office space across four blocks, and forms an intrinsic part of the wider 83,612.7 sq m (900,000 sq ft) Facebook campus which is in the process of being delivered on the former AIB Bankcentre site.

The four blocks are fully let to Facebook and offer a weighted average unexpired lease term of over 15 years. The leases are held on full repairing and insuring terms and benefit from five-yearly upward-only open market rent reviews, the next of which is due in October 2022.

The current passing rent is understood to break back to approximately €538.20 per square metre (€50 per sq ft). That is well below recent lettings in the area which have been achieving in excess of €645.83 per square metre (€60 per sq ft), suggesting strong reversionary potential for an incoming purchaser.

International headquarters

Facebook is understood to have committed significant capital sums in order to create a world-class campus that will house their international headquarters and will eventually be home to more than 7,000 employees.

The properties have recently undergone an extensive refurbishment programme to bring them up to LEED Gold standard. Facebook’s Dublin campus is expected to achieve WELL Platinum certification upon completion.

The Ballsbridge campus will be Facebook's second-largest campus globally, outsized only by its global headquarters at Menlo Park in California. More than 60 Facebook teams will eventually be located in Ballsbridge.

It will also be home to staff working for its subsidiary applications, WhatsApp, Instagram and Messenger, and its Oculus virtual reality unit.

The highest-profile element of the campus will face on to Merrion Road and is being developed by Johnny Ronan’s Ronan Group Real Estate (RGRE). Fibonacci Square, as it will be known, is set to comprise 34,838sq m (375,000sq ft) and has been fully-let to Facebook on a 25-year lease commencing in 2022. The company’s decision in 2018 to take out a 25-year lease on the Fibonacci Square office development represented the largest single office letting in the history of the State.

Cushman & Wakefield, which is handling the disposal of the Serpentine Consortium’s interest, say they expect to see strong interest from investors globally.

Commenting on the sale, they said: “With a net initial yield of over 4 per cent and the real potential to increase this next year at rent review, the asset offers exceptionally good returns relative to some of its European peers.”

Ronald Quinlan

Ronald Quinlan

Ronald Quinlan is Acting Property Editor of The Irish Times