£18m sales underline strength of investment market

THE Dublin property investment market remains busy with two more office blocks being sold for strong prices.

Six private investors represented by BCP Stockbrokers have paid £14.75 million for Cumberland House, a 20-year-old building mainly occupied by Telecom Eireann at Fenian Street, Dublin 2.

In the city centre, Dublin Corporation has paid £3 million for a block on Tara Street which it occupies on a long lease.

The new owners of Cumberland House will earn a return of 8.3 per cent on their investment, a seven-storey block with 112,000 square feet of space and 207 car-parking spaces.

The block was sold by Consolidated Land, part of the London and Sydney Group, which has been availing of the strong investment market to offload some of the older properties in its portfolio.

Cumberland House is currently producing rents of £1.19 million with about 85 per cent of it coming from Telecom Eireann.

All but one of the floors is used by Telecom under 10 different leases, which have about 17 years to run.

The second floor is held under a 35-year lease by Fingal County Council from 1978.

With rents in the building average £8.80 per square foot, the new owners can expect fairly significant rental growth when most of the leases are reviewed over the next three years.

Palmer McCormack and Druker Fanning acted for Consolidated Land.

Dublin Corporation bought Liffey House from Treasury Holdings, which had acquired it last autumn from Bank of Ireland Pension Fund as part of a £45 million portfolio, which included Stillorgan Shopping Centre.

Finnegan Menton handled the sale of Liffey House, a 23,500-square-foot block with 21 car-parking spaces at basement level. It was rented by the corporation for fire brigade personnel under a 35-year lease from 1981.

An overdue rent review was expected to push the rent up to about £270,000.

Liffey House has been described as one of the ugliest office blocks in Dublin but the new owners will have the option of putting a new front on it - giving them an extra 14,000 square feet - to bring it in line with the facade of the adjoining Tara House.

While it makes good commercial sense for the corporation to buy the building because of its lease commitments, it seems likely that it will sell it on when 20,000 square feet of new office space is completed next year on the site of the fire brigade headquarters at Tara Street.