Office Market: It's looking like the Hibernian Group will agree to lease a major office scheme which is under construction on Upper Hatch Street in Dublin 2, writes Jack Fagan

The Hibernian Group is moving towards agreement on lease terms for up to 18,580sq m (200,000sq ft) of office space in a new development under construction at Upper Hatch Street, Dublin 2.

If the deal is confirmed, it will be the largest office letting in the city this year.

Hibernian Group's ongoing discussions with the Clancourt Group on the new office facilities follows a breakdown in negotiations with developer John Ronan over leasing terms for a newly completed block at Burlington Road in Ballsbridge, Dublin 4.

Ace Assurance has also changed its mind about renting the fourth floor - with around 1,121sq m (12,066sq ft) of space - of John Ronan's Connaught House.

Ace is now expected to move to space in George's Dock in the International Financial Services Centre being vacated by KPMG.

This has left the way open for Anglo-Irish Bank to seek suitable terms for leasing the second and fourth floors of Connaught House - these total 2,830sq m (30,462sq ft) of space.

Anglo-Irish Bank made it clear this week that it has not yet agreed terms.

John Ronan's strategy of renting the office block on a floor-by-floor basis is more popular on the Continent than in Ireland.

Back in Upper Hatch Street, the Clancourt Group will be hoping to get the Hibernian Group deal over the finishing line because there are so few tenants around the city looking for such a large volume of space.

Legal firm William Fry is the other major tenant in the market with a requirement for up to 9,290sq m (100,000sq ft). Another major legal firm, Matheson Ormsby Prentice, has opted for Sean Dunne's new office scheme of 12,077sq m (130,000sq ft) at Grand Canal Harbour.

The Hibernian Group is believed to be interested in the two front blocks at Park Place, one of 9,141sq m (98,400sq ft) and the other of 8,435sq m (90,800sq ft). A third block at the rear will have 9,382sq m (101,000sq ft). There will be a total of 133 car-parking spaces.

The unusually deep floor plates in Park Place of 22.5 metres (74ft) - compared to the average of 13.5 metres (44.5ft) - may well appeal to the Hibernian Group with its large staff.

The joint letting agents - CBRE Gunne and HT Meagher O'Reilly - have marketed the scheme on the basis that this layout would offer tenants greater efficiency and lower occupational costs.

The same agents originally quoted a rent €511.28 per sq m (€47.50 per sq ft) but the agreed figure is likely to be somewhat lower, given the huge volume of space involved.

The Clancourt Group is also likely to have to concede a rent-free period of two-and-a-half to three years, depending on the allocation towards the fit-out. Parking spaces will rent at around €3,500 per annum.

If the Hibernian Group proceeds with the deal, it is likely to rent two of the three interlinking office blocks.

Park Place is being developed on a speculative basis on the former Dunlop site around the corner from the old Harcourt Street railway station.

The scheme will include 2,200sq m (23,700sq ft) of retail space located within the original vaults of the station.

The Hibernian Group has been anxious for some time to bring all of its 1,200 Dublin-based staff together as soon as possible in a modern working environment.

Most of these are based in three adjoining, but not interlinking, buildings on Haddington Road and also at the corner of Dawson Street and Nassau Street.