€170m worth of offices and shops to hit the market

Three Dublin office blocks and a row of shops with overhead apartments on Chatham Street, off Grafton Street, are among the latest tranche of investment properties due to be offered for sale in the coming weeks by Joe O'Reilly's Chartered Land and Nama. The properties are expected to fetch in excess of €170 million.

Only one of the office buildings is in receivership, The Observatory at Sir John Rogerson's Quay in the south Dublin docklands, which was completed by Derek Quinlan and Bernard McNamara just as the market collapsed in 2007. It is now to be sold by Nama after being fully let in recent weeks.

The remaining investments are all held by Chartered Land which has been working closely with Nama on the management and future strategy for its extensive property portfolio which includes Dundrum Town Centre.

The decision to offload a substantial office building at 2 Grand Canal Square in the south Dublin docklands has been prompted by the fast improving investment climate and the aggressive purchasing by pension funds, real estate investment trusts (Reits) and international investment firms. This building has the advantage of being slightly under-rented at € 312 per sq m (€29 per sq ft) unlike most other office blocks sold in the past two years.

The same marketing strategy is also to trigger the sale of an office complex at South King Street and a 10 per cent interest in the adjoining shopping arcade occupied by Zara, H&M and Warehouse.

Number 2 Grand Canal Square is regarded as one of the best modern office blocks in the city because of the high class fit-out completed for solicitors Byrne Wallace who occupied it for a little over a year before returning to their original base in Harcourt Street in 2012.

The building is expected to produce a rental income of around €4.5 million when law firm William Fry relocate its 400 staff there later this year.

The company will occupy 9,290sq m (100,000sq ft) alongside Capita, the UK’s largest outsourcing group which is renting an adjoining 3,954sq m (42,460sq ft).

There are three buildings in all in Grand Canal Square with almost 35,302sq m (380,000sq ft) of office space completed in 2010 by Chartered Land.

Another block, Number 4, with 11,148sq m (120,000sq ft) is being fitted out for Facebook which is to relocate there from Hanover Reach at Grand Canal Harbour.

The third block, Number 5, with a similar floor area to the Facebook building, is expected to attract one of the highest rents in the city when it is let in the coming months.

Chartered Land's other office investment going for sale on South King Street, known as One Clarendon Row, measures 2,700sq m (29,062sq ft) on the second, third and fourth floors of the complex. The offices are rented at around € 1 million a year by Hutchinson 3G and a media company.

Separately, a buyer will be sought for eight shop units, including Il Fico, Pasta Fresca and Butler’s Chocolates on Chatham Street which were originally bought by McNamara and are producing rents of around €400,000.

The eight overhead apartments, owned by Chartered Land, were acquired with the intention of extending the shopping complex at the rear on to Chatham Street. The residential units are rented at €144,000 per annum. Chartered Land’s 10 per cent interest in the same shopping facility will also be going for sale.

The remaining 90 per cent interest was sold in January, 2008, to Anglo Irish Assurance Company, the pensions and investment wing of Anglo Irish Bank for €101 million. The fund settled for a return of only 2.75 per cent in what was the last significant retail sale in the city before the market plummeted.

The 7,473sq m (80,000sq ft) Observatory office owned by the Quinlan/McNamara partnership overlooks the city quays and though well located has been only partially occupied since it was completed.

US financial services firm Morgan Stanley occupies 371sq m (4,000sq ft) at penthouse level and though further lettings were made to Publicis Dublin and Reatix, the letting agents only recently managed to find a tenant (Riot Games) for the remaining 3,716sq m (40,000sq ft). The overall rent roll is around €2 m.

The five separate properties are expected to be sold in one lot or five lots.