Regus, the international serviced office supplier, has come up with a novel rental arrangement for its latest business centre planned for Dublin.
The company has taken a long-term lease of 1,500 sq m (16,145 sq ft) at the Crescent Building in Santry, Dublin 9, under an arrangement known as a “Partnership Lease Programme.”
Under the agreement, Regus is to fit out the office space to the usual corporate standard and will not be looking for the now standard rent-free period. Instead, Regus has undertaken to pay the landlord up to 40 per cent of the revenue earned by the business centre until such time as a pre-agreed market rent level is reached.
In this instance the agreed base rent for the building is of the order of €190 per sq m (€17.65 per sq ft). Once the rental earnings are sufficient to allow the payment of the base rent, the owner of the building will then qualify for an additional 20 per cent of turnover.
Regus has used the “Partnership Lease Programme” to allow it to grow its business around the world where it already has more than 1,000 business centres. There are plans to increase the representation to over 2,000 business centres within the next three years.
BNP Paribas Real Estate is advising Regus on its future strategy in Ireland and is also regearing a number of the company leases in Dublin in return for extended lease terms. This approach is expected to trigger an overall reduction in occupancy costs of around 25 per cent. There are currently three business centres here, at Alexandra House in Ballsbridge, where 4,000 sq m of space is available, Harcourt Centre on Harcourt Street (3,000 sq m) and Pembroke Road (2,000 sq m).
Conor Whelan of BNP confirmed that Regus were on “an aggressive expansion trail” and were currently considering additional locations around the city, including the IFSC and south and west Dublin suburbs. He said that eventually he could see the company holding more than 15,000 sq m of serviced office accommodation in Dublin. They would also consider opening business centres in some provincial cities and towns, he said.
The company is apparently impressed by the high standard of fitout in the Crescent which is located in the Northwood Estate near Dublin airport. The block extends to 3,734 sq m and is owned by a private investor, Terry Hayden.
