Bank to pay £3.4m for new offices

IRISH Permanent's private banking arm, Guinness & Mahon, is to pay £3.4 million for a headquarters building of 12,400 square feet, which is under construction at Earlsfort Terrace, Dublin 2. The deal will provide the developers with a yield of 6.5 per cent.

Acquisition terms have been agreed in the same week that Guinness & Mahon announced it is to sell a 20-year-old office building at 6/9 Trinity Street, Dublin 2. Finnegan Menton is quoting a guideline price of around £750,000 for the five-storey over basement building, which is to be auctioned on July 3rd. It has a gross floor area of 13,500 square feet and a net area of 8,900 square feet. There is planning permission to convert the ground floor into three retail units with basement storage.

The new block at Earlsfort Terrace, Osborne House, is being developed with a second block of 6,500 square feet at the front of St Stephen's Green House. It is due to be completed next March.

The 6.5 per cent yield achieved by developers Davy Hickey is in line with the current strength of the market.it equates to a rent of £18 per square foot for the office space and £1,200 for each of the 15 car-parking spaces, which will be provided alongside those in the basement of St Stephen's Green House.

Guinness & Mahon is paying the equivalent of £240 per square foot, including VAT, for its new headquarters building, which will be located opposite the National Concert Hall.

By acquiring the site at this stage and entering into a contract for the construction of the block, Guinness & Mahon will only have to pay stamp duty on the site. This will save the company between £150,000 and £200,000.

Guinness & Mahon is Ireland's oldest private bank - it was established in 1836 - and has been based in its current premises at 17 College Street since 1881. These premises are to be retained by Irish Permanent.

The Trinity Street block has been used in recent times by Irish Permanent Treasury, which is to relocate to the international Financial Services Centre.

The new Earlsfort Terrace building will provide a high profile HQ for the company beside the Conrad Hotel. The Earlsfort Centre office development beside it is acknowledged as one of the best in the city. The State-run National Medicines Board recently paid key money for office accommodation in the centre - the first time this has happened for more than a decade. The board paid a premium of £150,000 for the leasehold interest in almost 23,000 square feet being vacated by computer software company ACT Kindle. That space is held on a rent of £11.60 per square foot. A more recent letting deal in the Earlsfort Centre saw the rent level move to £17 per square foot for a suite of over 5,000 square feet occupied by the South African Embassy.