M7 makes €9m profit on sale of Fumbally Lane office block

Property investor M7 has earned a €9 million profit on the €33.5 million sale of a Dublin office that it bought 20 months ago.

The company, whose headquarters is in London, has sold an office block on Fumbally Lane, close to St Patrick's Cathedral in Dublin, for €33.5 million to local player BCP Asset Management.

The deal earned a profit of more than €9 million for M7, which bought the block in December 2016 for a reported €24 million.

M7 took on 19 new tenants over the last 20 months and boosted yearly rent by €1.14 million, an increase of 51 per cent.*

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Occupiers were paying about €1.7 million a year in rent when the building was put up for sale in late 2016, but there was scope to increase this to €2.8 million.

During that time, the real estate investor cut the building’s vacancy rate to 2 per cent from 17 per cent.

The company also spent some money on improving the property’s common areas, including landscaping its courtyard and outside seating.

Tenants include CMC Marketing, Adara Software, sunglasses supplier Dita Eyewear, lobby group Disabilities Federation Ireland, and third-level education body the Institute of Technologies Ireland.

Strong demand

John Murnaghan, M7's head of real estate for the UK and Ireland, said the sale of Fumbally Lane ahead of the time that the company originally expected demonstrated the strong demand in Dublin for such properties.

Nick Cullen, investment director at BCP, noted that Fumbally Lane was almost fully occupied.

He predicted that the wider regeneration of the surrounding area would increase the location’s attractiveness to business in the future.

Developer Sean Mulryan's Markland Holdings built Fumbally Square. The property was one of several that it sold to help pay off €300 million in debt, most of which was due to State agency Nama.

M7 has properties worth €7.1 billion across 13 European countries, including Denmark, France, Germany, Hungary, Poland and the UK.

BCP manages assets worth a total of €2.5 billion, €700 million of which is invested in property and €1.8 billion in capital-secured bonds. CBRE advised M7 on the deal, while Savills acted for BCP.

* This story was amended on August 30th, 2018.