Microsoft to break rental records


SOFTWARE giant Microsoft is looking for substantial new office buildings in Dublin.

The company, currently based in Sandyford, wants a campus-style Irish headquarters with a range of building extending to 37,160sq m (400,000sq ft) in the same general area of south Dublin. This is the largest-ever request for office accommodation to rent anywhere in Ireland and is primarily aimed at developers in a position to have a new high-quality complex designed and built within a specific time frame.

However, with most of the large scale developers now in Nama, there is only a handful of Irish companies in a position to negotiate such a deal and raise the significant capital expenditure required. The strict conditions applying to such a contract would invariably include an initial guaranteed rent of at least €322 per sq m (€30 per sq ft), periodic rent reviews and a lock-in lease that would run for a minimum of 15 years.

Microsoft’s decision to move to a new-style campus comes five years before its lease is due to run out. The company is currently renting 21,367 sq m (230,000 sq ft) in two adjoining buildings known as The Atrium. The main block extends to 15,793 sq m (170,000 sq ft) and the balance of the space is in the adjoining building, where the remaining floors are rented by a range of international companies including Sales Force.

It is thought likely that the business consortium which bought the two Atrium buildings from Green Property around five years ago for €100 million will also be pitching to hold on to Microsoft. The two blocks stand on a five-acre site which could easily be transformed into a campus-style development costing considerably less than an entirely new project. . Nonetheless, there is number of development sites in Sandyford, Leopardstown or Cherrywood which could be used for the Microsoft project. The company’s current rent roll of €8.7 million equates to around €236 per sq m (€22 per sq ft).

The owners of the Atrium blocks include a number of notable investors, including Sean Fitzpatrick, former Anglo Irish Bank chairman; Lar Bradshaw, former chairman of the Dublin Docklands Development Authority; telecoms billionaire Denis O’Brien; Harry Dobson, the Scottish mining magnate, and Paul Coulson, the main beneficiary from the €412 million sale of the Dublin glass bottle site.

The consortium initially put up €35 million of the €100 million to acquire the Atrium complex from Green Property Co. The balance of the funds were borrowed from Anglo Irish Bank. The initial rent roll of €4.4 million rose to €8.7 million when the complex was fully occupied, prompting the group of investors to refinance the deal. They reclaimed their original equity investment leaving the loan-to-value on the two blocks at 65 per cent.


ARTHUR COX, the countrys biggest law practice, has also launched a search for a new headquarters building of between 9,290 and 13,006 sq m (100,000/140,000 sq ft) in Dublin’s south inner city.

The company’s lease of 6,967 sq m (75,000 sq ft) at The Earlsfort Centre is due to run out in 2017. It is paying a rent of around €430 per sq m (€40 per sq ft). Current landlords, The Irish Pension Unit Trust and the Earlsfort Centre will be anxious to hold on to the legal firm but that won’t stop it looking at a number of options in the city.

These are likely to include the Ardilaun Centre on St Stephen’s Green which will have to be redeveloped by its owners, the Royal College of Surgeons; the former Bank of Ireland HQ on Baggot Street; One Park Place on Hatch St, due to be partially vacated by Aviva when it moves most of its business overseas. A Durcan- owned site on Adelaide Road could also figure on the list.

Arthur Cox may also take a look at 2 Grand Canal Square in the south Dublin docklands which extends to 14,400 sq m (155,000 sq ft). Solicitors Byrne Wallace moved there last year but are now planning to return in May to their original offices on Harcourt Street. The company has represented a large number of property developers in the past.

Arthur Cox is one of four top law firms to have been recently awarded new contracts for legal services to Nama. The company was paid €3.07 million for similar work in 2010 and 2011. The firm has staff of around 500 in Dublin and was named Legal Advisor of the