M7 Real Estate pays €28.5m for two Dublin offices

Pan European investor and asset manager M7 Real Estate has returned to the acquisitions trail again with separate agreements to purchase two Dublin office investments for a combined €28.5 million.

In the first instance, the company is understood to have paid around €13.5 million for the long leasehold interest of five fully-let units at the Sandyford Business Centre in south Dublin. The second transaction, which is close to being finalised, will see M7 secure ownership of the Nutley and AIG buildings on Dublin's Merrion Road for around €15 million.

The company’s purchase of the Sandyford Business Centre portfolio gives it control of five of the scheme’s 10 units along with an associated provision of 200 car parking spaces. The portfolio’s office accommodation covers a combined area of 4,532sq m (48,786sq ft) and is producing annual rental income of €1,192,578 with a weighted average unexpired lease term of 5.8 years, with breaks at 4.6 years.

Sandyford Business Centre is a prime suburban office scheme within the wider Sandyford Business District (SBD). Located just 10km south of Dublin city centre, the area is home to a growing range of major international and domestic employers including Facebook, Google, Salesforce, Bayer and AIB.

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In the case of the Nutley and AIG buildings meanwhile, M7 is set to secure ownership of two office blocks comprising an overall floor area of 4,016sq m (43,235sq ft) along with 83 under croft car parking spaces. Developed in the late 1980s as part of the wider Merrion Shopping Centre scheme, the subject property is currently generating total rental income of €1,439,932 per annum.

The Nutley and AIG buildings extend to 2,429sq m (26,147sq ft) and 1,587sq m (17,088sq ft) each, and come with the benefit of 49 and 34 car parking spaces respectively.

The Nutley Building is currently let to a number of occupiers including Bonkers Money, the Japanese Embassy, the Austrian Embassy and Global Standards while the AIG Building is currently let to a single tenant with a number of sub leases in place.

Following its two latest purchases, M7’s Irish portfolio now comprises 18 assets extending to just under 1,100,000sq ft, primarily in industrial and logistics space.

In August, the company paid €6.25 million for the former Kildare headquarter office and distribution facility of convenience store operator ADM Londis, while last January it acquired the Primeside Park industrial estate in Dublin for €6.75 million.

The group also controls the Century Business Park in Finglas, which it acquired for €4.47 million last September, and the Westlink industrial estate in Dublin 10, which is bought for €13,870,000 in 2018.

Its first investment here came in 2017 when it bought Fumbally Lane, a combined office and residential development in Dublin 8 which was on the market for €24 million. M7 sold Fumbally Lane to BCP Asset Management in 2018 for €33.5 million, following the completion of a comprehensive asset management programme which enabled the property's vacancy rate to plummet from 17 per cent to 2 per cent through the addition of 19 new tenants, and its annual rental income grow by €1.14 million.

M7 operates across 14 countries. It manages a portfolio of about 835 retail, office and industrial assets with a value of about €5.1 billion.