The new commercial property season gets under way today with the planned sale of four rented office blocks at The Park in Carrickmines, Dublin 18, which are expected to make over €40 million. At that price Savills estimates the investment will show a net initial yield of 6.5 per cent.
Having achieved full occupancy of the four high-quality buildings which date back to 2007, Michael Cotter's Park Developments is now preparing to begin construction on another five-storey block which will have a floor area of 5,300sq m (57,048sq ft) when completed in 2018.
It will be known as the Hamstead Building, and will incorporate the latest LEED gold standard designs and fit-out for energy efficiency. In the longer term, Park is also planning to build two further office blocks in the park.
The four blocks going for sale are opposite the Iveagh Building which was sold this year to the IPUT pension fund for €14.75 million, reflecting a net initial yield of 6.34 per cent and a overall valuation of €350 per sq ft. The four-storey block included seven retail units on the ground floor.
Park’s success is attracting a range of office tenants has been helped by its close proximity to the retail park, one of the busiest in the Dublin suburbs.
Marguerite Boyle of Savills is planning to sell the four blocks on an individual basis or in a single lot, and expects interest both from institutional and private investors.
Car parking
The overall rent roll is currently €2,725,000, while the weighted average lease term to run is 2.45 years. The development also includes 219 car parking spaces which are rented at €1,000 each.
The largest of the blocks, The Herbert, with a guide price of €24.5 million, will show a yield of 7 per cent and a valuation of €286 per sq ft The five-storey over-basement building extends to over 7,949sq m (85,564sq ft) and is fully let to six tenants including State Street’s international fund services. It is paying a rent of €710,967 for an office area of over 3,049sq m (32,828sq ft). Park Developments is also a tenant in the block, paying €391,825 for over 1,456sq m (15,673sq ft).
The second lot involves 33 of the 40 self-contained office suites in the Hyde Building which are available at €10.5 million. At this price the investment will show an initial yield of 6.18 per cent and a valuation of €300 per sq ft. The suites are fitted with air conditioning, raised access floors, suspended ceilings and staff facilities.
Retail tenants
Lot number three, Holborne Building, is at the entrance to the park and has two retail tenants on the ground floor, TC Matthews and O’Briens Wines. An even larger space of 556sq m (5,984sq ft) overhead is due to be occupied shortly by a medical user. The overall rent is expected to be in the region of €320,000, reflecting a yield of over 7.6 per cent on the €4 million guide price.
The final lot going for sale is a single-storey building extending to over 167sq m (1,900sq ft) which is primarily let to AIB for a seven-day bank. The management of Park also occupies a small office suite, bringing the overall rent up to €70,768. The €1 million guide price will show a net initial yield of 6.77 per cent and a valuation of €523 per sq ft.
Ms Boyle said the planned sale was a rare opportunity to acquire a significant interest in what was a highly successful park with low vacancy rates. She said the future development of Q3 would further cement The Park as Ireland’s premier suburban retail and business location.
