€20 million for Sandyford block with potential

Heather House - a modern office investment in Sandyford, Dublin 18 - comes on the market today with a guide price of €20 million.

Colliers Jackson-Stops says the multi-let block has redevelopment potential in an area where higher densities have already been achieved.

The five-storey building at Heather Road is producing a rental income of €719,771 but, according to the agent, the reversionary value is around €1 million per annum.

If the guide price is secured, an investor will have to settle for an initial yield of 3.22 per cent but, when rents are reviewed, the return should rise to 4.48 per cent inclusive of transaction costs.

The building, owned by a group of investors, has a gross floor area of 3,502sq m (37,695sq ft), including an attractive double-height glazed reception area along with a stone-clad tower.

There are 82 car-parking spaces, most of them at basement level, and two eight-person lifts.

The building stands on a site of 0.19 of a hectare (0.48 of an acre) which is zoned objective E "to provide for economic development and employment".

Property values have soared in Sandyford in recent years because of increasing densities and the impact of the successful Beacon South Quarter.

Nick Coveney of Colliers says that, with each development site pushing the planning boundaries in terms of height and densities, and the increasing number of cases being referred to An Bord Pleanála, developers found themselves in a situation where they purchased sites which were not producing income while the development was in limbo.

Heather House had the advantage of a rental income and short-term leases in most instances with mutual break options available on the longer leases.

This would allow any potential purchaser the flexibility of applying for planning permission while receiving an income with "the added comfort that there are no long term sitting tenants".

The tenants are Welplan (Ireland) Ltd, Masstock, Airvod, Moresoft, Threefold, Bibby Financial Services Veris plc, SHR Consulting, Global Investment Systems (Ireland) Ltd and Olympic Lifts.