€9.5m sought for Clonskeagh office building rented by Ericsson group

A modern office building in the Dublin suburb of Clonskeagh and rented by LM Ericsson, one of the largest communications companies in the world, goes on the market today at a guide of more than €9.5 million.

Agents Murphy Mulhall are handling the sale of Boole House for the Layden Group, which bought it just over two years ago for a reported €9.25 million.

The three-storey block has a floor area of 3,941sq m (42,425sq ft) and was built in the late 1990s to a high quality specification including raised floors, suspended ceilings and double-glazed windows.

Ericsson originally acquired the building and carried out an extensive upgrading of the upper floors before embarking on a sale and leaseback with the Layden Group.

Ericsson’s 20-year lease from March 2011, is subject to a break option in year ten. The current rent of €870,000 for the block and 156 surface car parking spaces (reflecting a base rent of only €181 per sq m (€16.83 per sq ft) is guaranteed to rise by 15 per cent to €1 million at the first review in April 2016. That will mean that the net initial yield of 8.76 per cent will rise to 10.1 per cent in less than three years.

Market strength
A further incentive for purchasers is the availability of €4.75 million in capital allowances which can be spread over the next eight years. This will greatly improve the return for debt purchasers and along with the moratorium on capital gains tax should broaden the appeal of the Dublin 4 investment.

Robert Murphy of Murphy Mulhall said the continued strengthening of the Dublin office market had as much to do with the lack of future supply as it did with the increased level of inquiries from Irish and overseas companies.

Clonskeagh as a sub-market had continued to attract ever more tenants, most notably Paddy Power, because of its convenient location close to the city centre and some of the most popular south Dublin suburbs.