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News Release

Dublin

Prime Dublin Offices for Sale

The Tara Collection Guiding €263.8 million


 

Dublin, 19th November 2014 – In one of the most significant property investment sales of 2014 to-date, property advisors CBRE and JLL are to offer a number of exceptional office buildings in Dublin city centre to the market as part of the “Tara Collection”. The sale is on behalf of a number of vendors and receivers.
The main assets are the Daniel Libeskind designed 4 & 5 Grand Canal Square, both occupied by Facebook under two leases.  The other assets are all in prime locations:  Alexandra House in the Sweepstakes development in Ballsbridge, Dublin 4, 86-88 Lower Leeson Street, Dublin 2 and One Grand Parade overlooking the Grand Canal. The collection provides an investor with an opportunity to gain a significant foothold in the Dublin CBD office market.

The assets are offered as a collection which can be purchased either in one lot or separately on an individual basis. The Collection offers a combination of long and short term income as well as development and letting opportunities.  The Tara Collection is superbly placed to benefit from the limited supply of quality office accommodation in the CBD and the strong recovery in the Dublin office market.  Consequently the pace of increase in office rents in prime locations has accelerated and this is likely to continue.  The grade A office vacancy rate in the prime Dublin 2 and 4 districts is at an all-time low.  The investment market is also breaking records with €3 billion of investments traded in the first 3 quarters of 2014 and this figure does not include loan sales.   

With a total area of approximately 33,000 sq. m (356,000 sq. ft.) across the properties, the sale offers investors an opportunity to acquire a significant foothold in the Dublin market and is likely to appeal to existing international and domestic investors as well as new entrants.  The guide price for the Tara Collection is €263.8 million.

The undoubted jewels are 4 & 5 Grand Canal Square.  These two world class BREEAM Excellent rated buildings were developed by Chartered Land, one of Ireland’s leading property development companies, who have developed in excess of 0.24 million sq. m (2.6 million sq. ft.) of premier retail and office buildings in Dublin.  Facebook occupy both buildings under two separate leases, forming their EMEA Headquarters and the largest Facebook presence outside the United States. 

Both buildings are built to an exceptionally high standard incorporating full height atriums and exceptional finishes throughout.    Number 4 which extends to 11,417 sq. m (122,894 sq. ft.) was let to Facebook under a 15 year full repairing and insuring lease from January 2014 at a passing rent of approximately €4.5 million per annum.  This lease incorporates a break after year 10 and the rent breaks back to €35 per sq.ft. Facebook have also recently agreed lease terms for the adjoining Number 5 under a 15 year lease incorporating a break after 12 years.  The annual rent is approximately €5.99 million which equates to €45 per sq. ft.  The term commencement is May 2015.  The buildings are available individually and the guide price for Number 4 is €102.2 million while the 11,857 sq. m (127,628 sq. ft.)  Number 5 is guiding at €113.8 million.

Alexandra House is located in the Sweepstakes development in Ballsbridge and offers an opportunity to benefit from the increased rents in the office market.  The block extends to a total net area of 5,195 sq. m. (55,923 sq. ft.) with 90 car parking spaces.  The ground, first and second floors which extend to 2,706 sq. m (29,129 sq. ft.) are let to The Sweepstakes Centre Limited trading as serviced office provider Regus at a total rent of €800,000 per annum.  The lease commenced in June 1999 and has approximately 10 years to run and the rent analyses at €23.72 per sq. ft. and €3,000 per car parking space.  The third, fourth and fifth floors extending to 2,489 sq. m (26,714 sq. ft.) are currently vacant. These floors are capable of refurbishment and given the shortage of Grade A office space are likely to command a strong rent when let. The agents are expecting to achieve a price of €25 million for this asset which equates to €454 per sq. ft.

86-88 Lower Leeson Street comprises a five storey over basement modern office building behind a reproduction Georgian façade extending to 1,536 sq. m (16,529 sq. ft.)  The property has the benefit of a planning permission which could increase the floor area to 2,166 sq. m (23,315 sq. ft.) with 26 car parking spaces.  Currently three of the floors are let under short term leases all of which expire in June 2016.  The total passing rent is €168,702 per annum.  This property offers an excellent development opportunity to reconfigure and refurbish internally and increase the floor area.  The expected price is €6.4 million which equates to €387 per sq. ft. on the existing floor area or €275 per sq. ft. on the extended area.

The final asset included in the sale is One Grand Parade overlooking the Grand Canal.  This is a high profile 6 storey over basement Grade A office block let to strong tenants including Zendesk International Limited, Oasis Global Management Company (Ireland) Limited and the Kuwaiti Embassy.  The building extends to a total of 2,929 sq. m. (31,534 sq. ft.) and there are 15 car parking spaces located at basement level.   It is finished to a very high standard with a full height atrium, raised access floors and air conditioning.  The full height glazing system allows excellent natural lighting and views over the canal.  The ground floor office is currently vacant extending to 299 sq. m (3,218 sq. ft.) while the total passing rent is €759,474 per annum.  The price expected for One Grand Parade is €16.4 million which equates to €520 per sq. ft.

Johnny Horgan of CBRE and John Moran of JLL commented on the sale as being the most significant to be brought to the market in 2014 -  the Grand Canal Square combination of international covenant coupled with spectacular office buildings offers an exceptional opportunity which is likely to appeal to a wide range of international and local investors while the remaining assets will be sought after by investors looking for value add opportunities.