Prime city office sees rapid price increase
A SOUTH Dublin office block bought in July last year by a German pension fund is now valued at almost €500,000 more than the €26m paid for it, just seven months after the acquisition.
One Grand Parade was acquired by German fund Quadoro Duric Real Estate from Credit Suisse, which made an €8m profit on the deal.
The German firm paid just over €26m for the imposing glass-fronted property, marking its first investment in Ireland. Construction of the six-storey office block was completed 2009 and it extends over almost 32,000 sq ft. The sale to the German fund also included 14 car parking spaces at the building.
Tenants at the location include the Kuwaiti embassy.
The German fund paid €3m more than the €23m guide price that was put on One Grand Parade when it went up for sale in April last year.
That was €5m more than Credit Suisse had paid for the property in early 2015.
Accounts filed in Luxembourg for the company used by the German firm to acquire the company last year confirm that it paid slightly more than €26m for One Grand Parade.
The accounts also show that between July last year and the end of February this year, an additional €923,000 in post-acquisition costs were incurred.
Additionally, the fair value of the asset was increased by €441,000. That brought the value of the property to €27.4m.
The accounts also show that Sachsische Arzteversorgung, a Dresden-based organisation that provides retirement and disability pensions to doctors and vets, provided a €13m mortgage to the Luxembourg company to help fund the Dublin acquisition.
The interest on that loan is variable, and the interest is divided into a fixed interest rate and margin. The fixed part of the interest is set at 0.542pc per annum, which is locked for a minimum period of seven years. The margin is 1.8pc.
Depending on the disbursement of the loan, only the fixed interest and margin are payable until July 2024. It will then be repaid as an annuity loan.
The accounts also show that the company behind the building receives rent of €690,000 and service charges income of €384,700.
The Dublin office market remains extremely active.
Dublin city centre accounted for 78pc of all space let in the capital's office market during the second quarter of the year, according to recent figures from Knight Frank.
Deals during the period included Google's decision to acquire the entirety of the €300m Boland's Quay scheme. It will take up the 221,000 sq ft of office space at the development, which is close to its European headquarters on Barrow Street.