German investor closing in on €50m deal for Dublin docklands office

The German investor MEAG is understood to be closing in on the purchase for about €50 million of a prime office investment in Dublin’s south docklands from Hibernia Real Estate Group (formerly Hibernia Reit).

The company, which acts as asset manager for the Munich RE Group and ERGO with some €310 billion in assets under management, is said by sources to have agreed heads of terms for Central Quay, a 59,861sq ft (5,561sq m) six-storey over-basement office building on Britain Quay.

Designed by award-winning architects RKD and developed originally in 2006, the subject property, which is being offered for sale through agent CBRE, has undergone a significant programme of refurbishment since being acquired by the then Hibernia Reit for €51.3 million in 2016. Outside of the provision of a range of new tenant amenities including a new reception area, upgraded shower and locker facilities, additional bicycle parking and an exercise/yoga room, the building now has a B3 Ber rating and a provisional BREEAM In-Use Very Good rating, with a plan to achieve BREEAM Excellent certification.

While the property was delivering a total of €2.5 million in annual rental income and a yield of 4.5 per cent from three tenants, namely Awas Aviation Acquisitions, Indeed Ireland and Invesco Global Asset Management, at the time of Hibernia’s purchase, some €3.4 million is now being generated from a new and more diverse mix of occupiers. This figure includes a fit-out rent of €250,000 per annum (first floor until April 2028) and a proposed 12-month rental underwrite for the second floor, which is vacant currently.

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The current tenant line-up includes DAE (Dubai Aerospace Enterprise), US-headquartered real-estate giant Hines, global investment manager Millennium Operations Limited, international law firm Fragomen, and leading insurance provider Europ Assistance. The weighted average unexpired lease term is just under six years and MEAG stands to secure a yield of about 6.25 per cent on its investment.

Situated in a prime waterfront position on Britain Quay in the heart of Dublin’s south docklands, Central Quay is located within a short walk of Grand Canal Dock. There are a host of amenities in the immediate area including the Bord Gáis Energy Theatre, the five-star Marker Hotel, numerous restaurants, cafes and gyms as well as the newly created Benson Park.