Irish Life pays €33m for high-profile office block at entrance to IFSC

Irish Life will have the option to upgrade George's Dock 2 (GD2), a high-profile office building at the entrance to Dublin's International Financial Services Centre, after buying it for about € 33 million. The investment will show an initial return of 6 per cent.

The partially occupied five-storey over basement block extends to 4,042sq m (43,500sq ft) and was owned since 1996 by an investment group, headed by Derek Quinlan, who were able to avail of tax breaks in the early years of the purchase.

Although all the upwards-only leases on the block have another six years to run and equate to about €476 per sq m (€ 44.30 per sq ft) the new owners are unlikely to rush into any refurbishment of the block in the light of lease periods yet to run and the prospects of further rent increases in 2016. About 40 per cent of the floor space has been empty since the main tenant, Susquehanna, a privately held global investment company, moved to its newly acquired former headquarters of AIB International at the front of the IFSC.

Rent review

With the next rent review on GD2 only over a year away Susquehanna will be faced with the challenge of either finding a replacement tenant or negotiating an early lease surrender. In the meantime, it has appointed agents to find an alternative tenant.

Another 30 per cent of GD2 is held by a subsidiary of the Dutch-owned Rabobank Group, which managed to find a replacement tenant in De Lage Landen, the global provider of leasing and business and finance solutions.

The remaining 8.5 per cent of the space held by Airbus Finance has been sublet to Statoil.

‘Excellent acquisition’

Irish Life’s purchase of GD2 is the latest in a series of deals which has transformed the ownership structure within the IFSC.

Martin O’Reilly, Irish Life Investment Managers, commented: “This is an excellent acquisition for Irish Life as it dovetails with our off-market acquisition last year of the adjoining George’s Dock 3 office block. The building offers strong medium-term yield and potential asset management angles to add value.”

GD2 comes with 40 basement car parking spaces as well as a third-generation fit-out including raised access floors, suspended ceiling and recessed lighting.

Adrian Trueick of Knight Frank handled the sale while Irish Life was advised by Peter Flanagan of BNP Paribas.