€19m Ericsson facility in Athlone promises net initial yield of 10pc
The Ericsson R&D facility in Athlone, Co Westmeath is being offered for sale for more than €19m, a price which reflects a possible, attractive net initial yield of 10pc. That is around double the yield available for prime office properties in Dublin.
Leading property developer Gerry Gannon is selling the facility which he bought at around the turn of the millennium. Gannon is currently backed by Nama on a number of major new residential developments in Dublin.
The Athlone facility is let to telecommunications company Ericsson LM Limited on a 25-year lease which has 10 years to run. The passing rent is €1,797,568 and an upward-only rent review is due this month with a minimum 10pc increase on the cards. A further minimum 10pc increase is scheduled for February 2022.
Such rent increases suggest that a new purchaser could recover the price of the investment during the remaining 10 years of the lease.
Ross Fogarty of property advisors Knight Frank said that the property was laid out on a 15.23 acre campus which comprised two adjoining and connecting office and software development facilities and an adjacent detached communications building which between them accommodate about 1,200 people. The main building had a gross internal floor area of 134,122 sq ft, the IPMS 2 extended to 142,158 sq ft and the communications building to 140,132, sq ft. A number of prefabs are also located on the site.
The purpose-built two storey Atrium Building, which was an Irish Architectural Regional Award Winner in 1999, provides third generation open plan and executive office accommodation. This building links at ground and first-floor levels to a primarily single storey rear building which was substantially redeveloped and customised for office and software development purposes.
Facilities also include an extensive staff canteen and dining room and the use of a multipurpose sports ground and on-site car parking.