Friday 6 December 2019

Industrial units near airport with €3.2m guide

This industrial facility in north Dublin has a guide price of €3.2m.
This industrial facility in north Dublin has a guide price of €3.2m.

Peter Flanagan

TWM and DTZ Sherry Fitzgerald are guiding €3.2m for an industrial facility in north Dublin.

The agents are have been retained to find a buyer for units 7 & 8 Airways Industrial Estate in Santry, Dublin 9.

The asking price reflects a net initial yield of 8.97pc after standard purchaser costs of 4.46pc.

Both buildings are let to Essentra Packaging Ireland Limited on a 15 year full repairing and insuring lease with a break option in year 10.

The lease commencement for Unit 7 is 1 July 2015 while Unit 8 is slightly later at 1 February 2016. The rent in the first four years is €300,000 per annum which increases to €320,000 per annum in year five for both properties. There are open market rent reviews every five years with the current passing rent equating to €3.41 per sq ft.

With the current upward pressure on rents there would appear to be obvious reversionary potential when the next rent review comes around in 2020, say the agents.

The buildings are said to be built to a high specification and are of concrete frame construction under a pitched roof with infill concrete block walls.

Both buildings have the benefit of two full height roller shutter doors providing access to the warehouse accommodation with two storey office accommodation to the front. The warehouse accommodation comprises a reinforced concrete floor and internal eaves of 6m.

Brendan Smyth of DTZ Sherry FitzGerald stated "The property represents excellent value with the asking price of €3.2m breaking back to €36 per sq ft and equating to around a third of current build costs for a facility of this standard".

Ollie Lyons of TWM stated that "the investment producing a high yield on a long term lease to an excellent tenant with excellent rental growth potential is likely to be of interest to a broad range of investors".

With the Industrial market the last sector of the property market to recover there is said to have been a rush of funding following Industrial investments in recent months. While the typical lease length in the market is five years with either a break or an option to extend it is unusual for an investment to come to the market with almost 10 years term certain remaining.

A Dun and Bradstreet Report provides a rating for Essentra Packaging Ireland Limited of 1A2 for the Tenant. This represents a lower than average risk of business failure, said the agents.

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