Hibernia pays €51m for three city centre office blocks
Published 01/07/2016 | 02:30
Hibernia REIT has exchanged contracts to acquire Blocks 1, 2 and 5 Clanwilliam Court in Dublin 2 for €51m from London & Regional, the international property investment firm owned by UK brothers Ian and Richard Livingstone.
While the sale will deliver a substantial profit for London & Regional, which acquired the buildings in three separate deals between 2012 and 2014, Hibernia has secured the properties for €3m less than the €54m which had been sought.
At just under 95pc of the asking price, the price paid by Hibernia suggests that the market for this asset class has remained unaffected by the uncertainty caused by the UK's decision to vote in favour of Brexit.
The blocks have a combined total floor space of 93,700 sq ft, arranged over five and six floors, above a double basement with 220 underground car parking spaces.
The 1970s buildings are currently 76pc let, and have a current total rent roll of €2.9m per annum, or an average of €34 per sq ft, excluding parking. Tenants include the ESB, An Bord Bia and Hines Real Estate Ireland Ltd. The weighted average period to break and expiry is five years with all leases due to expire by the end of 2021.
Hibernia's purchase price equates to a capital value of €544 per sq ft for the office accommodation and a net initial yield of 5pc. Once fully occupied and post-settlement of an outstanding rent review, the contracted rent is expected to rise to over €4m per annum, equating to a yield on cost in excess of 7.5pc.
Taken together with its acquisition of Marine House last March for €26.5m, Hibernia now owns four contiguous blocks of the seven blocks that comprise Clanwilliam Court.
Hibernia CEO Kevin Nowlan described the transaction as "consistent" with Hibernia's strategy of focusing on prime Dubin city centre offices with asset management or development potential.