Ireland’s largest single office investment, One Spencer Dock on Dublin’s North Wall Quay, is likely to be priced at more than €240 million when it goes for sale in the coming weeks.
Nama will be expecting a high level of Irish and overseas interest in the landmark building which is let to PwC on a long term basis. Two commercial property agencies, Savills and CBRE, have been appointed to handle the sale.
The nine-storey over basement complex is the most spacious in the city with an overall floor area of 21,054sq m (226,624sq ft). It was designed by Scott Tallon Walker Architects and developed in 2007 by the now defunct Treasury Holdings which folded with debts of €2.7 billion. The river-front offices have three interconnecting blocks which are widely regarded as among the best in the city.
The office accommodation is fully let to PwC under 25-year leases which provide for upwards-only rent reviews every five years. The leases have more than 16 years to run. The overall rent is believed to be in excess of €11 million per annum – probably working out at close to €538 per sq m (€50 per sq ft).
PwC is one of the "Big Four" accountancy firms with KPMG, Deloitte and EY. A small proportion of its office space is sub-let to ABN Amro and Ecclesiastical Insurance. In addition, PwC recently hired in agents DTZ Sherry FitzGerald to sub-let four floors in Block C with an overall floor area of 4,052sq m (43,625sq ft). The space will be available at a discounted rate in the mid €40s per sq ft .
One Spencer Dock was developed on land owned by CIÉ and under a development agreement the State transport company was to have a 17.5 per cent interest in the freehold. Davy moved swiftly to buy out CIÉ’s interests for around €20 million and when the office complex is eventually sold it will be entitled to its share of the investment.
Spencer Dock and the adjoining areas are to undergo substantial changes in the next few years under Project Wave which will see Sean Mulryan's Ballymore Development and the Singapore company Oxley develop more than 50,000sq m (540,000sq ft) of offices and 250 apartments at North Wall Quay. In the meantime, work is progressing on the completion of the new Central Bank headquarters.
Last month the Central Bank outbid several other investors to buy the partially vacant 11,943sq m (128,567sq ft) Block R at Spencer Dock for €104 million, a full €14 million above the guide price.
Investors planning to run the rule over One Spencer Dock will be well aware that there are few opportunities remaining to buy high quality large scale office blocks in either the docklands or the city centre. Six other relatively new blocks in the south docklands, four of them in Grand Canal Square, have been snapped up by investors after intense competition between Irish and overseas funds. Number 1 Grand Canal Square was bought by IPUT at €93.5m; number 2 was acquired by Irish Life at €121 million and numbers 4 and 5 occupied by Facebook were purchased by the German-based Union Investment for €233 million. Also in the south docklands, Kennedy Wilson paid €108 million for 98 Sir John Rogerson's Quay.
