Friday 24 January 2020

Hines close to €55m deal for Grafton St property collection

Dublin's Grafton Street (Stock photo)
Dublin's Grafton Street (Stock photo)
Ronald Quinlan

Ronald Quinlan

US real estate giant Hines is understood to be in the process of agreeing heads of terms to acquire the 'Grafton collection' - a multi-let block of retail buildings which includes the landmark Hickey's Pharmacy premises at the junction of Grafton Street and Duke Street - for a sum believed to be in excess of €55m.

Hines is understood to have fended off competition from a number of rival bidders, including Irish property fund IPUT, Irish Life and Deutsche Bank for the portfolio which was offered for sale by Savills last month for a guide price of €40m.

Assembled by the property developer and co-founder of the Cuisine de France bakery, Ronan McNamee, the overall portfolio is delivering a current annual rent roll of €1.95m.

Based on the €40m price which had been guided by Savills, the net initial yield would have been 4.62pc.

With Hines now gearing up to pay over €55m for the properties however, that yield is poised to be reduced to just over 3.2pc.

While a number of property industry sources expressed some surprise at the price, one agent said that the Grafton Street properties are "well-located" and that the yield would be very much in line with that currently being achieved by prime high street across Europe.

Hines has the financial capacity to outbid its potential rivals for this prize in the Dublin city centre market, having been given a €1.3bn mandate from Germany's largest pension group, Bayerische Versongnungskammer, earlier this year to locate prime European retail assets.

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