Georgian Market:Most renters would shy away from taking space in a 1970s office block so it is surprising that demand remains strong for office accommodation that is upwards of 200 years old. But the exception is always the rule when the space is in one of Dublin's original Georgian buildings.
These buildings were erected from around the time of King George III, when the American revolution was a new idea. Dublin's Georgians started out as gracious homes close to the city. Little has changed it seems as office space in a Georgian is virtually guaranteed a central location and, if you don't mind using a staircase, they offer plenty of accommodation.
"The Georgian buildings have stood for two centuries and, with updating and refurbishment, offer some of the most prestigious business premises available," says Nicholas Corson of Finnegan Menton. They often represent a trade off, providing somewhat less flexible accommodation in a form that can't deliver the modern open-plan office, yet for certain companies their elegance makes up for this, he believes.
"They aren't making them any more, they are a finite resource," says DTZ Sherry FitzGerald's associate director, offices, Ronan Corbett. He believes that a different set of parameters are applied when a person considers taking on a Georgian, and one should view these buildings as a mix between office and residential.
"People buy these full of emotion. They buy with their hearts, not their minds," he states. "They will always be in demand."
Many buyers choose Georgian offices as a kind of capital investment. "What we have found over the last number of years is the rents achieved from a Georgian house barely give you, as an investor, an adequate return," says Declan O'Reilly, a director at HT Meagher O'Reilly.
About €323 per sq m to €376.75 per sq m (€30-€35 per sq ft) represent typical returns despite costing from €12,917 per sq m to €13,994 per sq m (€1,200-€1,300 per sq ft) to buy, and for this reason the Georgian market "is being driven by owner-occupiers", he suggests.
With sizes typically from 232sq m (2,500sq ft) to 465sq m (5,000sq ft) they are "perfect" for personal practices. Many buy them through a company and then have the practice rent them back, with the house serving as a long term retirement investment, O'Reilly says.
The last peak in office prices (before 9/11) saw Georgian office rents rival those of modern space - at, in today's terms, around €484 per sq m (€45 per sq ft), says Corson. That event knocked back prices generally and the cost of modern space subsequently recovered more quickly than Georgian space.
Modern space is now making €700 per sq m (€65 per sq ft) in central Dublin and Georgian space has pushed up to its old high of about €484 per sq m (€45 per sq ft), Corson says. He believes this gap will close over time, particularly for the well refurbished space which can carry a €107.65 per sq m (€10 per sq ft) premium over less-well finished Georgian offices.
Yet the shortage of Georgians should help prices for well restored space in this sector. Corson points to lettings that show the strength of this market, with 37, 38 and 39 Fitzwilliam Square let for €430.5 per sq m (€40 per sq ft); 16 Hume Street let for €506 per sq m (€47 per sq ft); 28 Elgin Road let at €516.7 per sq m (€48 per sq ft); and 1 Raglan Road and 41 St Stephen's Green making €538.2 per sq m (€50 per sq ft).
Sales highlights include: €9 million for the FAI building at 80 Merrion Square; €8.6 million for 17 Harcourt Street; and €13 million for An Bord Altranas's HQ at 26/27 Fitzwilliam Square.
Corson makes another comparison: his firm is selling 9 Ely Place, which has 372sq m (4,000sq ft), a rear mews of 130sq m (1,400sq ft) and planning for conversion. Find a home of this size on Dublin 4's Waterloo, Wellington or Elgin roads and expect to pay between €6 million and €10 million, he says. Yet 9 Ely Place is in the heart of the south city and a stone's throw from St Stephen's Green and has a price tag of €4.5 million.
