Lennox Building sells to Swiss Life for €27m

Paddy McKillen jnr paid Marlet Property Group €7m for central Dublin 8 site in 2017

The Lennox Building on the corner of South Richmond Street and Lennox Street in Portobello, Dublin 8: has a surface area of 33,448sq ft

The Lennox Building on the corner of South Richmond Street and Lennox Street in Portobello, Dublin 8: has a surface area of 33,448sq ft

 

Developer Paddy McKillen jnr’s Oakmount and Core Capital have secured €27 million from the sale of the Lennox Building in Dublin city centre to a fund managed by Swiss Life Asset Managers.

The price achieved for the property represents a significant return on the estimated costs of between €15 million and €18 million incurred by Oakmount and Core in acquiring and developing the site on the corner of South Richmond Street and Lennox Street in Portobello.

It is understood Mr McKillen jnr and his partners paid developer Pat Crean’s Marlet Property Group about €7 million for the building’s 0.35 acre plot in 2017, and a figure of between €8 million and €11 million on its development.

The Lennox Building’s sale price of €27 million meanwhile provides its new owners with a net initial yield of 4.8 per cent.

Completed in March 2019, the property comprises an office and restaurant premises over basement, ground and three upper floors totalling 33,448sq ft (3,107sq m).

Weston Office Solutions Limited, a Dublin-based serviced office provider trading as Iconic Offices, occupies the majority of the building under a lease expiring in 2044 with tenant termination options on the expiry of years 12 and 18.

A rent of €52.50 per sq ft was agreed on the office accommodation and €22.50 per sq ft on the leisure accommodation in advance of the property being brought to the market last October. The letting also includes eight car parking spaces at €3,000 per annum per space.

Groundfloor restaurant

The 5,985sq ft (556sq m) groundfloor restaurant and 1,518sq m (141sq m)basement ancillary accommodation are let at €240,000 per annum to The Workman’s Club Limited, a subsidiary of Paddy McKillen jnr and Matt Ryan’s Press Up Entertainment Group which is one of Ireland’s leading leisure and hospitality companies.

The lease term is 20 years with a tenant break option at the end of year 10. The Lennox Building’s combined annual rental income will be €1.383 million subject to final agreed measurements.

The property occupies a prime position in Portobello and is located within close proximity of the established office districts of Harcourt Street and Hatch Street. It also benefits from being just two minutes’ walk from the the Grand Canal, while Camden Street and Wexford Street are just a short stroll northwards, along with the shopping district of Grafton Street and St Stephen’s Green.

Swiss Life Asset Managers’ acquisition of the property was supported by Mayfair Capital Investment Management Limited (Mayfair Capital).

Metropolitan regions

Commenting on the deal, Renato Piffaretti, head of Real Estate Switzerland at Swiss Life Asset Managers, said: “The acquisition fits perfectly to our investment strategy with focus on properties with stable value in European metropolitan regions.”

Mayfair Capital chief executive James Thornton noted that Ireland remains an “attractive market for overseas investors” with higher yields than Switzerland and mainland Europe.

He said: “We are pleased to have acted for the Swiss Life fund in making its first purchase in Ireland; the first since Mayfair Capital became part of Swiss Life in November 2016. This follows two acquisitions we made for the same Fund in Oxford and Leeds in early 2018 and total some £100 million [€114 million].”

Max Reilly of JLL advised Mayfair Capital while Ross Fogarty of Knight Frank advised the vendor, Oakmount and Core Capital.