Property investment company Hibernia Reit is acquire the Garda Siochana regional headquarters at Harcourt Square, Dublin 2, for € 70 million in an off-market transaction.
Hibernia has agreed to acquire the property from Gangkhar, an entity that’s understood to be controlled by Starwood Capital, who in 2013 led the acquisition of the Project Aspen loan portfolio from NAMA. Loans secured against the Harcourt Street property formed part of this loan sale in April 2013.
The net initial yield of the property is 6.8 per cent and the price equates to a capital value of c.€540 per sq. ft. for the office space. The site has potential for redevelopment at significantly increased density, Hibernia Reit said.
At present, the property is let to the Office of Public Works (OPW) and fully occupied by the Gardai at a passing rent of € 4.9m per annum (€ 38 per sq. ft. excluding parking). The lease on Block 1 expired in late 2014 and the leases on Blocks 2-4 expire during 2016. The OPW has applied for a court lease renewal on Block 1 and discussions are ongoing regarding possible lease extensions for the other blocks.
Kevin Nowlan, chief executive officer of WK Nowlan REIT Management Limited, the investment manager, said the acquisition will give the reit "substantial near term income and exciting redevelopment opportunities in the traditional office core of Dublin".
"We expect to submit a planning application shortly and look forward to working closely with Dublin City Council to deliver attractive new Grade A office space in the city centre in future," he said.
This acquisition is Hibernia’s fourteenth since listing: once completed Hibernia will have invested € 506m, with a further € 43m committed, since its initial public offering in December 2013.
Recent acquisitions include The Forum building in Dublin’s IFSC for a total consideration of € 37.8 million. Last week Hibernia said that the fit-out of 213 apartments in Block 3, Wyckham Point, which it acquired in 2014, remains on schedule and within budget, with the first units expected to be completed and available for rent in the second quarter of 2015.
