A newly refurbished office building to be rented by a Japanese advertising and public relations firm on Haddington Road in Dublin 4 is expected to be of interest to Irish and overseas funds when it is offered for sale from today at more than €23.5 million. Selling agents Savills and HWBC said the investment will show a yield of 5.5 per cent, allowing for new increased acquisition costs of 8.46 per cent, and a capital value of about €828/sq ft.
The newly named Two Haddington Buildings originally formed part of the Hibernian Insurance Company’s three headquarters buildings, with an overall floor area of 10,497sq m (113,000sq ft), at Haddington Road and Percy Place.
The buildings were bought at the height of the property boom in 2006 by Kildare businessman Gerry Conlon. The investments were back in the news in 2014 when they figured in the Project Spring loan book associated with Mr Conlon, which was bought by Deutsche Bank.
The bank has funded a comprehensive upgrading of Two Haddington Buildings, installing the latest electrical and air conditioning systems as well as new showers, changing rooms and bicycle bays. The five-storey headquarters-style block extends to 2,637sq m (28,385sq ft) and comes with 11 surface car-parking spaces accessed from Percy Place.
10-year lease
The block has just been let to Dentsu Aegis Network, a subsidiary of Japanese advertising and public relations company Dentsu, which has signed a 10-year lease at an initial rent of €516/sq m (€48/sq ft). The rent roll will be more than €1.4 million. Dentsu is currently fitting out the newly refurbished building to accommodate about 130 staff.
Savills and HWBC have also recently launched a marketing campaign to let Three Haddington Buildings, a headquarters-style block with a floor areas of 1,860sq m (20,020sq ft) over four levels, which are currently being modernised. The joint agents are quoting €560/sq m (€52/sq ft) and €4,000 for each of the 14 parking spaces. The building is to be ready to move into next summer.
The owners also intend to upgrade the 3,900sq m (42,000sq ft) of space in One Haddington Buildings in 2018.
Roisin Rafferty of Savills said the sale of Two Haddington Buildings is an excellent opportunity to acquire a blue chip investment in a market with a diminishing supply of good quality office space. Pat Campion of HWBC said the quality of the covenant together with a 10-year income certainty offers a secure office investment in a prestigious location.
