What are we to make of the news that the North Docks office scheme in Dublin has generated bids of between €60 million and €95 million for a property with a price tag of €130 million?
As reported by The Irish Times this week, the north docklands scheme is being sold by CBRE on behalf of receivers. The owners are Nama and Los Angeles-based Oaktree Capital. The property had previously been put on the market last August for €155 million, a process that failed to generate a bid.
On the one hand, the bids could be interpreted as a signal of weak investor sentiment, at a time when the office vacancy rate is north of 14 per cent, remote working is still a huge feature, and a glut of new space is coming to the market this year (some 250,000sq m is proposed for completion in Dublin in 2024).
On the flip side, the reported 10 bids suggest there is €600 million-plus in institutional capital out there interested in investing in the Irish office market – at the right price, obviously. The bidders are reported to include Eamon Waters investment company Sretaw, US investor Hines, Irish developer Pat Crean’s Marlet Property Group, BCP, Orion Capital Managers, Lugus Capital and Patron Capital. No mugs in that line-up.
The great Guinness shortage has lessons for Diageo
Ireland has won the corporation tax game for now, but will that last?
Corkman leading €11bn development of Battersea Power Station in London: ‘We’ve created a place to live, work and play’
Elf doors, carriage rides and boat cruises: Christmas in Ireland’s five-star hotels
The sale of 40 Molesworth Street in Dublin city centre offers the most recent evidence of the state of the market. In January, Savills brought the seven-year-old “trophy asset” to market at €40 million. Reports this month suggest it was sold for €37 million to Deka Immobilien, with a yield to the buyer of 5.16 per cent.
The good news for anyone planning to sell an office block in Dublin in the near term is that some €500 million-plus in capital will still potentially be in play come the end of the North Docks sales process.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
