Irish Life has re-entered the commercial property investment market after eight years, buying a rented office building for €15.5 million opposite the former Jurys Hotel at Pembroke Road in Dublin 4. The investment will show a net yield of 7.15 per cent.
The State’s largest property fund has up to €200 million available to spend on a range of key investments expected to be offered for sale over the year at heavily discounted prices by Nama and the banks.
However, with a wide range of overseas buyers now set to be in competition for the distressed properties, Irish Life will have its work cut out to deliver on its promise to buy high-quality city office buildings in the light of a perceived shortage of space.
Martin O’Reilly of Irish Life said yesterday the demand for office space was resilient despite the economic downturn.
Commercial property values in the Dublin area, which fell by 65 per cent over more than five years, have finally shown signs of stabilising and even bouncing back.
Adrian Truick of HT Meagher O'Reilly, who handled the sale of 87-89 Pembroke Road on behalf of the former Anglo Irish Bank, secured €1.5 million more than the guide price for the three-storey over-basement block with a floor area of 2,790sq m (30,000sq ft). Irish Life was represented by CBRE.
Most of the overall rent of €1,158,000 is paid by the Bank of Ireland under two long-term leases, one of them with more than a century to run. The balance of the space is rented by the American Embassy and the Irish Computer Society.
The Pembroke Road block formed part of a larger property holding owned by Bernard McNamara and David Courtney when they and other developers failed to get planning approval for the redevelopment of the centre of Ballsbridge.