Three D2 office blocks to make €50 million

InvestmentsRoyal Liver Assurance is offloading three Dublin office blocks and all have potential for redevelopment, writes Jack Fagan

With few commercial investments available so far this year - apart from another tranche of Bank of Ireland branches - there is likely to be strong interest in three Dublin 2 office investments going for sale today through DTZ Sherry FitzGerald. They are expected to make close to €50 million.

All three blocks come with redevelopment opportunities and are being sold by Royal Liver Assurance which has been involved in the Dublin market for many years.

The assurance company recently paid over €21 million for Block B, a five-storey over basement block with a gross internal area of 5,799sq m (62,420sq ft and 179 surface and basement car-parking spaces, at Liffey Valley in west Dublin. Before that they sold the Royal Liver Retail Park on the Naas Road to a developer who is expected to seek planning permission for a mixed-use scheme.

Royal Liver is expecting to secure €16.5 million for Garryard House, an office building of 1,476.12sq m (15,890sq ft) at Earlsfort Terrace. It is let to Equant Network Services International on a 35-year lease from the end of 1976. The passing rent of €628,520 is currently under review and negotiations are expected to be completed shortly.

If the vendor secures the asking price, the net initial yield will work out at 3.41 per cent. This will increase to 3.87 per cent once the rent review is finalised. The block stands on a site of 0.07 hectares.

DTZ is also quoting €22.2 million for 96-102 Lower Mount Street which is let to Irish Life Assurance on a 35-year lease from the end of 1982. The present rent of €918,000 is due to be reviewed next December. The building extends to 2,501.86sq m (27,000sq ft) and stands on a site area of 0.069 hectares. The net yield in this case would be 3.71 per cent but, once the review is completed, the return should move out to 4 per cent.

For those who would prefer something with a lower value, there is also 13 Pembroke Row which is let to Bord Fáilte Ireland at €340,000 per annum. The asking price of €8 million would show a net initial yield of 3.8 per cent. The 35-year lease runs from 1982. The block extends to 869.75sq m (almost 9,500sq ft) and stands on a site of 0.067 hectares.

Roisin McAuliffe of DTZ said Royal Liver had decided to sell the three buildings which offered underlying development potential in order to free-up funds for further reinvestment in Dublin.

The agent is to sell the three investments by private treaty and invite best bids by June 13th.