Doyle family expects £5.5m for bank building on the Green

The most important investment property to come on the market this year, the Smurfit Paribas Bank building, at 94 St Stephen's Green, Dublin 2, is expected to appeal to both private investors and institutions when it goes to tender on February 23rd.

Hamilton Osborne King expects to secure in excess of £5.5 million for the landmark building, which is currently producing a rent of £290,000 per annum. It is one of the last significant commercial investments to be offered for sale by the Doyle family, of the hotel chain, as part of the reorganisation of the family fortune. The Doyle Group has already agreed to sell its hotels to its main rivals in the industry, Jurys, for £200 million.

If the bank building makes £5.5 million-plus, it will bring property sales by the Doyle family in recent months to around £40 million. The family still owns a valuable development site on St Stephen's Green, which was originally ear marked for a hotel. However, according to Ian French, of HOK, the site is not for sale Smurfit Paribas Bank and Smurfit Finance and Leasing occupy a modern office building of 18,580 sq ft that was developed behind the imposing facade of a former Methodist Church. The current rent of £14 per sq ft is well below the open market level for such a prestigious building and location. The next rent review is scheduled for November, 2002. The building is located on the south side of St Stephen's Green, close to the Department of Foreign Affairs and Russell Court, the office development which occupies the site of the once famous Russell Hotel. The bank building is let to Smurfit Ireland on a lease which has 19 years to run. For that reason, the fact that the Smurfit bank was taken over this week by Anglo Irish Bank should not affect the selling price.

While a range of institutions and funds are looking for prime office investments, they continue to face strong competition from private investors and business syndicates who have become the dominant force in the investment market. Last year, the private sector spent an estimated £467 million on commercial property investments compared with£148 million by the institutions. A high proportion of the institutional spend was on pre-funding speculative office developments but with a huge volume of office space planned for the Dublin area over the next few years - one scheme alone, at Leopardstown, will have 1.75 million sq ft - the institutions are signalling their concern that the office market could end up in trouble if most of the schemes are proceeded with.

The most valuable investment sold by the Doyle family was Rathfarnham Shopping Centre, which made £10.2 million. Before Christmas, they got £7 million for a block of 40 apartments at Lad Lane. The new owners, three businessmen, plan to upgrade the one and two-bedroom units in the 13-year-old block, which has 40 valuable car-parking spaces.

The Doyles also sold Shelbourne House, an office block in Ballsbridge, to a Galway businessman for £5.8 million. Industrial units at Naas Road and Concorde Industrial Estate fetched £4.25 million and one in Sandyford Industrial Estate made £2.5 million. The family also secured £3.3 million for St Brigid's, a redevelopment site at Clonskeagh Road, Dublin 14.