Prime D2 offices with development potential for €27m
Magennis Court and 51-54 Pearse St both fully-let
Adrian Trueick of Knight Frank is quoting a price of €27m for two adjoining Grade A office blocks within the core Dublin 2 office area near Grafton Street, Trinity College and the city's thriving south Docklands.
The subject properties - 51-54 Pearse Street and Magennis Court - sit on either side of Nos 47-49 Pearse Street, which is owner-occupied by Chartered Accountants Ireland. While the three buildings share a common basement car park, they are otherwise self-contained.
Completed between 2007 and 2009, the buildings offer the investor the opportunity to acquire fully-let modern offices at the heart of Dublin's central business district with considerable potential to add value.
Nos 51-54 Pearse Street, which extends to 2,373 sq m (25,619 sq ft), comprises a fully-refurbished Georgian building to the front, linked by an imposing glazed central atrium to a modern, six-storey office block to the rear. Ten car spaces are provided at basement.
The property is let to two tenants - Henry J Lyons Architects (HJL) and Aquacomms - at a current rent of €848,059 per annum, with a weighted average unexpired lease term (WAULT) of over eight years. The passing rent for HJL averages just €25.18 per sq ft with a rent review due next year. The most recent letting in the building secured a rent of €55.00 per sq ft.
Magennis Court is a modern office building laid out over five floors, completed in 2009. The offices, which extend to 1,625 sq m (17,490 sq ft), are finished to Grade A standard, with raised access floors, suspended ceilings and recessed lighting. Heating and cooling is provided by a full VRF system. Five basement car spaces are provided.
The office floors are let to John Daly Atlantic Language Galway Ltd at a passing rent of €453,300 per annum (€35.00 per sq ft). The lease expires in 2023 (four years). A double-height basement and car space is licensed to Chartered Accountants Ireland providing an additional €15,500 per annum.
While the total rental income from the portfolio is currently in the region of €1.32m, the selling agent estimates the prospective purchaser could increase this to over €1.7m, based on current market rates. The quoting price of €27m reflects an initial net return of 4.50pc, increasing to 6.00pc at market rents. Because of the low base rents, the capital value at the quoting price is only €6,856 per sq m (€637 per sq ft), a significant discount on recent transactions.
Both buildings have scope for further development, with an illustrative architect's scheme suggesting potential for an additional office floor on both buildings.
Adrian Trueick says: "The investments offer a high-quality product with secure income flow and potential to add value by active management. This sale is likely to attract interest from both overseas and local investment funds.