Iput gets green light for €45m redevelopment of Fitzwilton House

Savills report says 27% of Dublin’s office space has changed hands since 2013

Illustration by Modelworks of the  proposed  redevelopment of Fitzwilton House overlooking  the Grand Canal in Dublin

Illustration by Modelworks of the proposed redevelopment of Fitzwilton House overlooking the Grand Canal in Dublin

 

Irish property fund Iput plc has received planning permission from Dublin City Council for the €45 million redevelopment of Fitzwilton House on the Grand Canal. This will involve the demolition of the existing 1960s building and the construction of a new 17,405sq m office development over eight storeys.

The building, designed by Henry J Lyons Architects, would include 44 car and 178 bicycle parking spaces and a roof garden overlooking the canal and Wilton Terrace. The current programme envisages construction to get under way in 2017 and for the building to be completed by mid-2019. However, this could be subject to change with the possibility of the permission being appealed to An Bord Pleanála.

A number of observations were made to the council about the development, including from An Taisce. The heritage body argued that the demolition of the existing building was contrary to sustainable development and to the core strategy of the city’s development plan. It said the existing building should be reused.

Transport Infrastructure Ireland called for the imposition of a Metro North development levy, while the department of arts, heritage and the Gaeltacht noted that the development would have a significant adverse impact on the architectural heritage of the south Georgian area of Dublin. The department also argued that the demolition was not warranted and that the building should be re-used.

In its application, Iput said the carbon impact of the proposed new building was calculated at less than half that of the refurbishment option per person served. While the current building could be insulated and would have new glazing fitted, the air leakage would be “difficult to improve”.

Iput has had a strong start to 2016. Seven new lettings were agreed in the first quarter, which will introduced more than €2.5 million of new income to the fund. At the end of March, 97 per cent of its portfolio was occupied and rental income of €22.8 million was collected during the first quarter. The fund distributed €19.69 million to investors in the quarter, reflecting a 12-month dividend yield of 4.73 per cent.

Separately, a report from estate agents Savills Ireland shows that almost one million square metres of modern office space has traded in Dublin since the beginning of 2013. That is the equivalent to 27 per cent of the entire office stock in the capital, with the proportion of space traded in the central business district even higher at 38 per cent.

John McCartney, economist and director of research at Savills Ireland, said the rate of activity reflected a glut of supply as Nama and lenders put the assets associated with non-performing loans up for sale, while rapid growth in services employment had created strong occupier demand and low vacancy rates.

Institutional investors and Reits were the biggest buyers since the start of 2015, accounting for 41 per cent of modern office purchases by volume and 80 per cent by value. The average lot size for these players was just under €50 million. Foreign office buyers accounted for 62 per cent of spending on Dublin offices during 2015.

Mr McCartney said he expected prime headline office rents to increase by 14 per cent by the end of this year.