Nama has settled on a guide price of over €250 million for Central Park in Leopardstown, Dublin 18 – the largest single Irish property asset to be offered for sale by the State agency.
John Moran of Jones Lang LaSalle and Fergus O'Farrell of Savills are launching an international marketing campaign to find a buyer for one of Dublin's most successful suburban developments which includes five substantial office blocks, a retail building and a multi-family apartment complex with 272 homes.
All six commercial buildings, developed by the now defunct Treasury Holdings, are being sold on the instructions of William O'Riordan and Declan McDonald of PwC who were appointed receivers by Nama.
The multi-family complex, built by John Lally's company, Devano Developments, is producing a rental income of €3.8 million per annum. Devano is not in receivership but most of Lally's loans are being managed by Nama.
Central Park is currently producing an overall rent roll of €17.97 million which is due to rise to over €19.32 million when a number of rent-free periods run out. The initial yield, based on a €250 million selling price, will be 7 per cent. However this will move to 7.75 per cent at the end of rent-free periods in 2015.
The range of office blocks in Central Park are widely acknowledged as having as good if not better specifications as the best of the most recent office developments in the city.
However, rents in Central Park range around €182 per sq m to €323 per sq m (€17 to €30 per sq ft) compared to the current prime city centre rents of €322 to €376 per sq m (€30 to €35 per sq ft) for top grade space. The city office market is rapidly recovering, partially because of a shortage of large volumes of newly completed space. The sharp pick-up in city rents will inevitably have a knock on effect in primary office parks such as Leopardstown and Sandyford.
The diversity and scale of Central Park also means that there are obvious opportunities for the next owners to increase returns through asset management, lease restructurings and future development.
In fact, there are 6.76 acres of commercial development land available and planning permission for three office buildings on part of it with an overall capacity of 65,680sq m (707,000sq ft). New owners will also have the option to complete a partially built apartment block with a further 166 homes.
Those pitching for Central Park will be challenged to come up with a realistic valuation for the land yet to be developed but, with the enhanced market sentiment now gaining ground, this element of the park is likely to be valued somewhere between €30 and €40 million.
First launch
Central Park's office accommodation was first launched in 2001 when Vodafone was signed up for what was then the largest letting on record. The mobile phone operator moved into a high quality seven-storey, 24,432sq m (263,000sq ft) building distinguished by a large light filled central atrium which allows floors to be let on a floor-by-floor basis.
Not surprisingly, Vodafone has sublet space to a number of leading companies, including Mastercard, 123.ie, PJ Carroll, Luxottica, and All Finanz. There are around 2,000 staff in all based in the block known as Mountainview, most of them in a hot desk working environment and all of them free to avail of a restaurant on the fifth and sixth floors as well as a coffee shop and convenience store on the ground floor.
Vodafone pays an annual rent of almost €7.3 million under a lease which runs to 2026, but has a break option in 2018.
The five detached office buildings in the park have an overall floor area of 63,915sq m (688,000sq ft) of which 8,268sq m (89,000sq ft) remain unlet. An additional 2,787sq m (30,000sq ft) is vacant on the ground and first floors of the residential complex.
The most recently developed block, Number One, also with an impressive central atrium, has an overall area of 18,301sq m (197,000sq ft). Three of the seven floors are vacant but it will be no surprise if this space is eventually rented by the two existing tenants, Tullow Oil and Salesforce Ireland.
First Active Investments were also one of the first tenants to move into Central Park taking a six-storey block with an overall floor area of 7,061sq m (76,015sq ft). The company pays a rent of €2,165,000 under a 25-year lease which runs out in 2026 but has a break option in 2019.
The adjoining five-storey Block C with an overall floor area of 6,748sq m (72,652sq ft) is producing a rent roll of €1.844 million from a range of tenants, including Leaseplan Infrastructure Services, Volkswagen Bank, and RGA International Reinsurance. The fifth floor and part of the fourth floors are currently unoccupied.
Bank of America Merrill Lynch pays a rent of €1.73 million for Block D which has an overall floor area of over 7,031sq m (75,688sq ft). The leases run until 2028 with break options in 2018.
A two-storey retail building in the centre of the park is shared by a convenience store and a Thai restaurant. There are no fewer than 1,586 car-parking spaces at two basement levels throughout the park. Spaces are rented at €1,200 per annum.
Two other buildings which form part of the Central Park, Bewleys Hotel and a crèche operated by Giraffe Childcare, are owned separately.
Central Park has excellent public transport links to the city, the M50 and the N11. For most of the workers on site the dedicated Luas tram stop in the park has made commuting both convenient and easy.
