Hibernia REIT to buy Dublin site for €28.7m
Hibernia REIT has exchanged contracts to acquire 77 Sir John Rogerson's Quay ("77 SJRQ") for €28.7m.
The six storey office building is situated towards the eastern end of Dublin's South Docks where a number of large development projects are nearing completion.
Totalling 34,400 sq. ft., the building – which also has 20 basement car parking spaces - was constructed in 2004.
Hibernia is acquiring the building vacant, and expects to spend €0.5m on improvement works. Including this spend of half a million euro, the purchase price equates to a capital value of €850 per sq. ft. for the office space.
Separately the real estate investment trust has agreed to let the entire building to a subsidiary of International Workplace Group (WG) on a 25 year lease, with 15 years term certain.
WG will pay initial rent of €1.8m, which equates to €50 per sq. ft., and will receive nine months rent free.
The lease is expected to commence in mid 2018.
The net yield for Hibernia will be 5.8pc after expiry of the rent free period, rising to 6.3pc following a fixed uplift in rent after year five.
Commenting on the announcements, Kevin Nowlan, chief executive of Hibernia, said that the company was "delighted" to be acquiring 77 SJRQ and welcoming IWG as a long-term tenant.
"The eastern end of the South Docks is undergoing a transformation with several large development projects approaching completion and occupiers such as JP Morgan and Indeed.com joining State Street, Accenture and AirBnB in the area," Mr Nowlan said.
"The simultaneous agreements show Hibernia's ability to drive value through combining our asset management and deal sourcing capabilities."