The new selling season for offices gets under way this week with the planned disposal of two modern Dublin city centre office investments for the Clancourt Group.
Blocks 4 and 5 in the Harcourt Centre on Harcourt Road are expected to be priced at about €50 million, according to joint selling agents JLL and Knight Frank. The two high-class buildings are to be offered for sale individually or as one lot.
With a floor area of over 5,202sq m (56,000sq ft), an annual income of €2.17 million and a weighted average unexpired lease term of about 5.88 years, the investment will show an initial yield of 4.25 per cent with the prospects of it rising to around 5 per cent once rent reviews are completed and a ground floor café/restaurant is let. Given the quality of the two blocks and their location in the city, the sale is expected to appeal to both domestic and overseas investors.
The two buildings form part of Clancourt’s seven-block Harcourt Centre and offer prospects of rental growth.
Block 4 Harcourt Centre is a six-storey over basement office building developed in 1998. The entire 2,684sq m (28,900sq ft) is let to Europa Business Centre (trading as Regus Business Centre) on a 25-year lease with 6.2 years to run.
The passing rent of €817,000 reflects a rate of €293 a sq m (€27.25 per sq ft) with a review outstanding since mid-2016.
As recent lettings in the adjoining Block 5 are now set at €624 per sq m (€58 per sq ft), the rent is expected to increase significantly once the review has been settled.
The building has 23 parking spaces and is finished to third-generation specification. The ground floor retail unit is let to Café Sol, now owned by Dunnes Stores. The tenant trades as Baxter & Green. The Café Sol lease runs for 25 years from 1998 and provides a rent of €95,000.
Block 5 is also a six-storey over basement building, developed in 2001, with an office area of 2,573sq m (27,700 sq ft). Tenants include Sumitomo Mitsu Fund Services, Dentsu Aegis and ITX Fashion (Zara). The passing rent of €1,255,000 reflects an average rate of €599 per sq m (€52 per sq ft) with individual rents ranging from €403 per sq m (€37.50 per sq ft) to €624 per sq m (€58 per sq ft).
The fourth floor, of 353sq m (3,800sq ft), is available to let at a quoting rent of €624 a sq m (€60 per sq ft). Negotiations are ongoing to rent the ground floor café. The building has 17 parking spaces and recently had a fifth floor refurbishment had a new fifth level added.
Clancourt is to reinvest the proceeds of the sale in the ongoing development of Three Park Place, a 15,143sq m (163,000sq ft) office block due to be completed in the fourth quarter of this year.
Clancourt is also close to completing an office building at the corner of Hatch Street and Earlsfort Terrace which has been prelet to legal firm Arthur Cox.
