Well-located office investments with long-term rental income in Dublin city centre are continuing to attract considerable overseas interest.
The latest block to sell, the AIB Trade Centre near the front of Dublin’s IFSC, has just been bought by a wealthy German businessman for €7.9 million.
The three-storey over basement building at Custom House Quay, also known as Stack B, will give the new owner a return of 8.9 per cent after costs are deducted.
The riverside block extends to 1,734 sq m (18,665 sq ft) and is occupied by AIB on a lease which has eight and a half years left to run. The rental agreement provides for an upwards-only review in 2016 on the current rent of €735,000 per annum.
This equates to €473 per sq m (€44 per sq ft), well above the going rate in the IFSC where some recent lettings only attracted rents of about €269 per sq m (€25 per sq ft). The letting includes 17 surface car parking spaces rented at €3,500 per annum.
Rod Nowlan of Bannon, who handled the sale, has signalled that there may be redevelopment opportunities for the block which stands on a site of almost half an acre and is dwarfed by adjoining buildings, some standing seven storeys high.
Stack B was originally a riverside warehouse which was redeveloped and enlarged to become a three-storey over basement office block in the early 1990s.
Businessman Denis O’Brien funded the redevelopment and sold the completed building to a group of investors looking for a tax shelter. The block has water views on three sides – the Liffey, George’s Lock and George’s Dock.
It will be no surprise if AIB eventually relocates staff in Stack B to its Ballsbridge headquarters just as it has announced plans to move other IFSC personnel to Bankcentre. This could happen sooner than expected if it manages to find a suitable replacement tenant for Stack B.
