Irish pension fund IPUT buys Docklands office property for €143m

The Irish pension fund IPUT has completed the purchase of two substantial office investments in the Dublin Docklands for €143 million, bringing its overall spend in the office market in the year to €279 million.

The fund has paid almost €50 million for Riverside 2, a seven-year-old office building at Sir John Rogerson’s Quay which changed hands only two years ago when it was bought for €36 million by German fund AM-alpha. The latest off-market sale reflects the recovery in values already apparent in the Dublin office market because of the absence of new developments and the expectation that office rents will bounce back next year.

Fergus O’Farrell of Savills handled the sale.

Healthy return
IPUT can bank

on a return of 6.5 per cent on Riverside 2 and on its second purchase, One Grand Canal Square, which cost €93 million.

Riverside 2, a 6,874sq m (74,000sq ft) block, is producing a rent roll of €3.3 million from Bank of New York Mellon and Beauchamps solicitors.

One Grand Canal Square failed to sell at the bottom of the market more than a year ago when the asking price was in excess of €75 million. The building extends to 10,219 sq m and is producing rents of €5.8 million mainly from Accenture and HSBC.

IPUT chief executive Niall Gaffney said the latest acquisitions meant that more than 74 per cent of their fund was now invested in the prime end of the Dublin office market where rents were due to start rising next year.

The fund is expected to report returns of over 12 per cent this year on its €800 million property portfolio.

Property portfolio
The shareholders include

several state agencies like the ESB and Eircom pension funds, Irish Airlines Pension Fund, Diago, Aviva, and pension fund clients of Goodbodys and Davy

The investments bought by IPUT over the year included the six-storey HQ of solicitors A&L Goodbody in the north Docklands for €58 milion; a property portfolio owned by Irish Airlines Pension Fund for €58million and an office building in the IFSC for €20 million