Friday 23 February 2018

Beech Hill office at €8.75m promises yield of up to 7pc

Knight Frank say there is potential to increase the average rent at Beaver House to €20 per sq ft
Knight Frank say there is potential to increase the average rent at Beaver House to €20 per sq ft
Ronald Quinlan

Ronald Quinlan

Agents Knight Frank are guiding a price of €8.75m for Beaver House at the Beech Hill office campus in Clonskeagh, Dublin 4.

Recently refurbished, the three-storey office building is fully-let to three excellent tenants and is currently producing a combined rent roll of €527,858 per annum. The potential purchaser can expect a net initial return of 5.80pc (after standard acquisition costs of 4.46pc) and a low capital value of €296 per sq ft. The average rent equates to €14.95 per sq ft, and presents strong reversionary potential.

Following recent lettings in Beaver House, the agents believe there is potential to increase income to around €20 per sq ft and €1,250 per car space, which would give an investor a net initial yield of over 7pc in 2020. The weighted unexpired lease term is in the order of 6.5 years.

The largest tenant in the building (66pc of space) is Maxim Integrated, who occupy the entire of both the first and second floors on a 15-year FRI lease from 2015 at a passing rent of €315,000 per annum to include 60 car spaces. This rent equates to €13 per sq ft, which offers significant room for rental growth over the remaining term. There is a tenant break option in 2025 and over 7.5 years term certain remaining. Maxim are a blue-chip covenant.

The remaining space (33pc) is let to Pinergy and Jefferson Payroll. Pinergy are the most recent tenant and have taken a 10-year lease from July 1 2017 for part of the ground floor of the property at a rent of €139,920 per annum, equating to €19 per sq ft.

Jefferson Payroll occupy the second suite on the ground floor and occupy on a 10-year FRI lease from January 1, 2017 at €18.50 per sq ft. Both tenants have break options on the expiry of five years, subject to 12 months' prior notice.

There is continued demand for well-established suburban investment assets presenting attractive returns.

This demand was evidenced with the sale earlier this year of Topaz House at the Beech Hill Office Campus for over €8m. The price equated to a net initial yield of approximately 5.58pc off a passing rent in the order of €18.35 per sq ft and €1,000 per car space. Topaz House's capital value of €375 per sq ft suggests that Beaver House carries considerable value also.

Beaver House is a modern, three-storey semi-detached office building. The property is a concrete-framed structure with an attractive brick and render façade under a slate pitched roof. The building forms part of a U-shaped block and extends to a total area of approximately 2,739 sq m (29,482 sq ft) GIA with 90 car parking spaces located at basement and surface levels. Each of the three L-shaped floors are designed to accommodate sub division, providing two suites per floor, if required. The recently refurbished accommodation is finished to a high standard and is consummate with the expectations that corporate occupiers expect.

Inside, the building comprises a triple-height glazed entrance lobby and reception desk, flexible office layout, suspended ceilings with recessed category 2 lighting, raised access floors, air-conditioning, passenger lift and fully completed toilet facilities including shower.

The building's design and orientation provides for high levels of natural light to penetrate the floor plates, further enhancing the office's sense of space and openness.

Beaver House is centrally located within the successful Beech Hill Office Campus in Dublin 4. Situated just off the Clonskeagh Road between Donnybrook and Clonskeagh, the campus is laid out in six main blocks within an attractive, mature, fully managed and landscaped environment. The development's tenant mix is strong and includes Ericsson, Topaz, Smurfit Kappa, Paddy Power, University College Dublin (UCD), Nokia and David Lloyd Riverview Gym.

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