Saturday 25 November 2017

US tech giants' office spree is major boost for city market

In a major coup for the Dublin office market, Google is to acquire the Treasury Building for over €120m
In a major coup for the Dublin office market, Google is to acquire the Treasury Building for over €120m
Ronald Quinlan

Ronald Quinlan

Google is understood to be close to finalising a deal to acquire the Treasury Building on Dublin's Grand Canal Street for a figure in excess of €120m, the Sunday Independent can reveal.

The proposed transaction marks the conclusion of a process which kicked off with informal talks at the beginning of this year.

It is understood that Google had from the outset been prepared to pay up to €125m to secure ownership of the building, which currently serves as the headquarters of the NTMA and a number of its subsidiaries, including Nama.

That figure amounts to a premium of approximately €25m on the property's estimated valuation of €100m.

A spokeswoman for Google declined to comment on the matter when contacted by the Sunday Independent.

Google's intended purchase of the Treasury Building represents a spectacular coup for its owners, developers Johnny Ronan and Paddy McKillen, and Percy Nominees.

LinkedIn has agreed to pre-let 130,000 sq ft at One Wilton
LinkedIn has agreed to pre-let 130,000 sq ft at One Wilton

It also serves as a statement of the web giant's intent to continue with, and deepen its investment in Dublin.

Google's decision to buy the Treasury Building outright is in keeping with its preference for owning its own premises.

In terms of its Irish operations, this was already evidenced by the company's purchase of its European headquarters on Barrow Street and the nearby Montevetro building for €100m and €99m respectively in 2011.

Both buildings were developed by Treasury Holdings, the company headed up by Johnny Ronan and Richard Barrett. Google isn't the only US tech giant intent on expanding its Dublin presence however.

In another piece of very welcome news for the capital and for the wider economy, LinkedIn is understood to have agreed to pre-let 130,000 sq ft of office space at One Wilton, a new 150,000 sq ft building to be developed by Iput on the site of Fitzwilton House at Wilton Terrace.

In its latest annual report, Iput indicated that One Wilton would be completed by mid 2019 subject to the agreement of a pre-let this year.

The Sunday Independent understands that Iput has already reached agreement with the Australian embassy and the Revenue Commissioners to move from Fitzwilton House by an agreed date to allow for its demolition and redevelopment.

A spokesman for Iput declined to make any comment on the company's pre-letting agreement with LinkedIn for One Wilton when contacted by the Sunday Independent. It is understood that LinkedIn will pay a rent in the region of €60 per sq ft for its new premises, which will be located immediately adjacent to its recently-opened European headquarters at Wilton Place.

Since arriving here in 2010, LinkedIn has grown its Irish workforce from just three employees to 1,200.

Google, for its part, already has a 6,100-strong Dublin workforce. Its acquisition of the Treasury Building suggests that it intends to grow its existing headcount significantly in the near to medium term. The building's current occupier, the NTMA, is poised to move shortly to its new headquarters at Dublin Landings, which is currently being developed by Sean Mulryan's Ballymore and Singapore-headquartered Oxley Holdings in the north docks.

The NTMA's new premises is expected to be ready for fit out by next February or March, leaving open the possibility that the State agency may move from its current location towards the middle or end of 2018.

Quite apart from its intended purchase and move into the Treasury Building, Google already increased its presence on Grand Canal Street this year with its agreement to lease 51,096 sq ft from Irish Life at the recently-constructed Velasco Building. The property sits directly across the road from the Treasury Building.

Both properties meanwhile are located within a five-minute walk of Google's Barrow Street offices, the home of its European headquarters and the acknowledged heart of an area now commonly known as 'Googletown'.

Outside of the city centre, Google reached an agreement last August to lease space for several hundred additional employees at the Blackthorn Building in the newly-branded Sandyford Business District (SBD). Elsewhere in the SBD, the company is also reported to be in advanced talks with US real estate giant Kennedy Wilson to take space at the Chase Building and with the owners of the Atrium, which was formerly occupied by Microsoft.

Quite apart from Dublin's Central Business District and Sandyford, the US web giant entered into a 10-year lease on Block L at Freeman House in East Point Business Park in 2013.

Sunday Independent

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