IPB Insurance is believed to have bought Standard Life’s Dublin offices on St Stephen’s Green for €26,825,000 – well ahead of the €25 million guide price. The investment is expected to show a yield of 4.7 per cent when an imminent rent increase kicks in.
IPB did not return a call from The Irish Times yesterday. Last October it bought two office investments at Grove Court in Blanchardstown, Dublin 15 for €13.4 million.
There were six bidders including Irish Life for the office complex which has a Georgian entrance on the south side of St Stephen's Green and more modern offices backing on to Iveagh Gardens. They have been owned and occupied by Standard Life for the past 30 years.
The office accommodation extends to 2,470sq m (26,591 sq ft) over five floors and comes with 25 parking spaces. The passing rent of €650,000 per annum is highly reversionary at €238 per square metre (€22.11 per square foot) and could rise as high as €538 per square metre (€50 per square foot) when it is reviewed in September.
Car-parking spaces are also expected to rise from €2,500 to €4,000 per space.
The high level of interest in the investment stemmed from its prime location and, more importantly, from a legal undertaking given by Standard Life that it will not seek a renewal of its lease when it runs out in about 5½ years. At that stage the new owner is expected to revamp the offices in order the maximise returns.
The continuing popularity of St Stephen’s Green as an office venue has already persuaded Irish Life Investment Managers to replace a 1966 office block close to Standard Life with a larger high-quality building.
The 3,066sq m (33,000sq ft) Hainault House at 67/71 St Stephen’s Green is to be replaced by a 5,388sq m (58,000sq ft) six-storey glazed block over a double basement. The redevelopment is expected to cost about €20 million.
Next to the Irish Life block businessman Denis O’Brien has already made a killing by replacing the rundown Canada house at the junction with Earlsfort Terrace with an impressive new block.
The redevelopment is believed to have yielded profits over of more than €30 million.
The Standard Life building was sold by Michele Jackson of TWM, while the purchaser was advised by Patrick Curran of BNP Paribas Real Estate.
