Iput seeks €50m for Dublin office investment portfolio
Sale of EastPoint and Richview business park properties offer buyer 6.55% net initial yield
Block P1 at EastPoint Business Park in Dublin 3 is let to Conduit Enterprises Ltd at a rent of €910,000 per annum.
Strong demand is expected from both domestic and international investors in four Dublin offices which have been brought to the market by agent Savills for a combined guide price of €50 million.
The sale of the Viewpoint portfolio on behalf of Irish property company Iput offers the prospective purchaser an attractive net initial yield of 6.55 per cent, along with strong reversionary potential in the short term.
The subject assets are being offered to the market in one or more lots and are distributed between EastPoint Business Park, Dublin 3, and Richview Office Park in Clonskeagh, Dublin 14.
Iput’s decision to dispose of the four properties is in keeping with its long-standing practice of recycling and redeploying capital to drive income and capital growth.
Lot 1 comprises blocks P1 and P3 in EastPoint Business Park, and is guiding in excess of €31 million. The guide price reflects a net initial yield of 6 per cent, and with two upcoming rent reviews later this year provides investors with the opportunity to grow the income to market rent.
Block P1 is a standalone office block extending to 42,865sq ft (3,982sq m) set over four floors with 61 car-parking spaces. This building is let to Conduit Enterprises Ltd at passing rent of €910,000 per annum on an upward-only lease expiring in 2025. Top Oil, Quintiles and Citrix have subleases within the building
Block P3 is a semi-detached office building extending to 50,315sq ft (4,674sq m) set over four floors with 70 car-parking spaces. This block is let to Citrix Systems International GmbH, an American multinational software company, under two separate leases at combined rent of €1,117,334 per annum expiring at the end of 2026 with a tenant break at the end of 2021. Lot 1 offers a weighted average unexpired lease term (WAULT) to expiry of 6.3 years and a WAULT to break of 3.8 years.
Overall, Lot 1 is currently under-rented with an average passing rent of just €20 per square foot, providing investors with the opportunity to increase income to open-market rent at the two upcoming rent reviews later this year.
EastPoint Business Park is one of the country’s largest and most successful schemes, with more than 1.25 million square feet of office space. The park benefits from close proximity to the IFSC, north and south docklands office locations. EastPoint is home to an array of international occupiers including Deutsche Bank, Oracle, Google, Virgin Media, British Airways, Cisco and Verizon.
Lot 2 comprises blocks 5 and 9 in Richview Office Park, Clonskeagh and is guiding in excess of €19 million, which reflects a net initial yield of 7.5 per cent. Both buildings offer strong the prospective buyer strong reversionary potential in the short term, according to the selling agent.
Block 5 is a detached, three-storey building extending to 25,407sq ft (2,360sq m) with 63 car-parking spaces. This property is let to Curtiss Wright Controls under a 10-year lease expiring in October 2023 at a passing rent of €565,000 per annum. The aviation product and service provider had a recent break which they did not exercise, demonstrating the tenant’s commitment to the park.
Block 9 is a detached three-storey property of 35,869sq ft (3,332sq m ) with 90 car-parking spaces. This building is let to Paysys International Ltd and is guaranteed by First Data Corporation, which was acquired recently by Fiserv, a global fintech company, under a 25-year lease at a passing rent of €980,000 per annum. The lease is due to expire in June 2022. The combined WAULT is three years, offering investors asset-management opportunities in the short term.
Purpose-built business park
Located off the Clonskeagh Road in Dublin 14, Richview Office Park is a well-regarded purpose-built business park within the wider Clonskeagh business park hub, alongside the adjacent Belfield Office Park and Beech Hill office campus. Flutter Entertainment, formerly Paddy Power Betfair, is one of the largest occupiers within the Clonskeagh business hub, having taken 150,000sq ft for its headquarters. Other adjoining occupiers include Ericsson, UCD, Microfinance Ireland, Act Venture Capital, Smurfit Kappa and McDonald’s Restaurants of Ireland.
Fergus O’Farrell, director of investments at Savills, says: “This is an excellent opportunity to acquire four fully income-producing office investment properties with significant asset-management potential in established business districts with low vacancy rates.
“We anticipate a strong level of demand from domestic and international investors due to attractive and growing returns from high-quality tenants along with value-add opportunities in the short term.”