The pharmaceutical firm Novartis, Europe's largest drugmaker, is close to agreeing rental terms on one of several long vacant office blocks at Elm Park on the Merrion Road in Dublin 4.
The Swiss company is in negotiations on a heavily discounted rent believed to be in the region of €182 per sq m (€17 per sq ft) for 7,883sq m (84,863sq ft) in the Vista building which, along with most of the other office and apartment blocks on the site, have been in receivership since shortly after they were completed by Bernard McNamara’s Radora Developments.
McNamara, who had debts of €1.5 billion to Nama and the banks, was declared bankrupt in London last November. Only one of the four other office blocks at Elm Park is occupied. The tenant is Alliance.
More than 300 apartments on site have also been let by agents acting for Nama.
Novartis is expected to spend at least €5 million on fitting out the eight-storey over basement Vista building which comes with more than 60 car-parking spaces in the basement. A 10-year lease is likely to be agreed with a break option in year five. Mark Smith of CBRE is letting agent for the building while Conor Whelan of BPN Paribas Real Estate is advising Novartis.
Novartis, which employs about 1,200 people in Ireland, has a separate operation at Beech Hill office park in Clonskeagh, Co Dublin, and a manufacturing facility in Ringaskiddy in Co Cork. The company reported profits for its two Irish operations of €13 million in 2010, based on a turnover of €175 million.
The Elm Park deal will be one of the largest office lettings in Dublin this year and comes just after another overseas company, Twitter, opted to relocate from a Regis office in the Harcourt Centre to the redeveloped former Academy cinema in Pearse Street.
Twitter has taken a sub-lease of 1,579sq m (17,000sq ft) on the third and fourth floors of the building which was previously occupied by US video games developer PopCap. That company announced the closure of its Dublin operation last summer. Before it did so, it had fitted out the two floors in the Academy to a particularly high standard. Twitter will now be able to avail of high quality facilities at a rent of €269 per sq m (€25 per sq ft). The original lease to PopCap included a break option in 2015.
This deal is one of a large number of small to medium-sized office lettings since the start of the year which have pushed the overall lettings to over half a million sq ft (46,450sq m) in the first quarter. There were three transactions of more than 4,645sq m (50,000sq ft) involving Sales Force at Central Park, Fidelity at Citywest and SIG at the former AIB block in the IFSC.
Conor Whelan said a study by his agency had shown that 40 per cent of the take-up of office space in the first three months related to buildings in the city centre.
There were 16 transactions of 1,000sq m (10,764sq ft) or more but with most of the letting activity in the 200 to 500sq m (2,153 to 5,382sq ft) bracket in Dublin 2 and 4 there were now upward pressures on rents for good quality office suites.
