The National Asset Management Agency is preparing to offload south Dublin's most valuable suburban office complex, Central Park at Leopardstown, Dublin 18, in the expectation that it could sell for anything up to €200 million.
The park was one of the most valuable assets held by Treasury Holdings, Ireland's largest property company, when it was declared insolvent with debts of around €2.7 billion. Around €1 billion of that sum is owed to Nama for taking over Treasury's loans.
Accountants and professional services firm PwC will oversee the sale of Central Park as it continues to liquidate the property company headed by Johnny Ronan and Richard Barrett. Property agent Jones Lang LaSalle has been appointed to handle the sale of the park which is currently producing a rent roll of €15.5 million.
Treasury, along with financier Derek Quinlan and developer David Arnold, originally set up the Clyde Road Partnership to oversee the development of the park.
Recent reports suggest that Nama may have initially considered selling one of the five office blocks in the park – a 6,503sq m (70,000sq ft) building rented by Bank of America Merrill Lynch – to illustrate the strength of the market before proceeding with the disposal of the remaining investments.
Latest indications, however, are that the entire office complex may well be offered for sale in one lot given the strong level of overseas interest in high-end office investments in the Dublin area and the fact that there is a severe shortage of stock available.
Overseas funds
Another critical selling point is that all the buildings in Central Park have as good, if not better, fit-outs as the best of the office buildings completed in the city docklands before the property crash.
The five buildings in the park have an overall floor area of around 60,385sq m (650,000sq ft) and though rents have fluctuated between €182 and €322 per sq m (€17 and €30 per sq ft), depending when the lettings occurred, the average rent roll equates to around €269 per sq m (€25 per sq ft).
Neither PwC nor Jones Lang LaSalle have commented on either the proposed sale or the likely selling price.
However, agents retained to advise overseas funds are speculating that with overall rents running at €15.5 million, the likely bidders would hope to achieve an income return of around 8 per cent. At that yield, a new owner could expect to pay in the region of €185.5 million for the huge office complex.
The largest office block in Central Park – which also happens to be the largest single let office building in the country with a floor area of 24,430sq m (262,960sq ft) – serves as Vodafone’s corporate headquarters.
Though the mobile phone giant has a break option in its lease around 2018 there seems little likelihood that it will move elsewhere simply because there is no other comparable building available in the Dublin area.
However, the company will be able to renegotiate its rent but, with a recovery well under way, it could end up paying even more than at present.
Three other Central Park buildings with around 6,503sq m (70,000sq ft) each have a number of leading tenants, including Bank of America Merrill Lynch, Ulster Bank Group, Lease Plan, Volkswagen Bank, Vivas Health Care and British American Tobacco.
The most recently built block in the park, Number 1, has an overall floor area of around 18,155sq m (195,000sq ft) which will end up being multi-let. The successful Irish oil and gas exploration company Tullow Oil is renting 6,503sq m (70,000sq ft) on the top three floors as its new headquarters. The company's high specification fit-out is reputed to be one of the best in the Dublin market. It is paying a rent of €193 per sq m (€18 per sq ft).
Since Tullow moved in it has been followed by cloud computing company Salesforce. com which is occupying a further 4,645sq m (50,000sq ft) in the same block at €182 per sq m (€17 per sq ft).
Central Park also has a residential quarter where developer John Lally built around 180 apartments but was unable to offload them because of the downturn in the market. Most of the apartments are currently rented.
Whoever buys Central Park will also have scope to develop further office blocks when rents return to at least €376 per sq m (€35 per sq ft).
During the early phases of Central Park it had a reputation for traffic jams. This is no longer the case as it fronts on the Leopardstown Road dual carriageway less than 500 metres from the interchange with the M50. The extension of the Luas line with a dedicated stop at Central Park has also made the park highly accessible for workers commuting from the city centre.
