Adelaide Chambers office block sells for €7.23m

An almost fully let 18th-century office building and modern extension in Dublin's south inner city has been sold to the Joe O'Reilly-led Chartered Land Investment for €7.23 million.

Colliers International had initially sought about €8 million for the Adelaide Chambers, once the centrepiece of the former Adelaide Hospital, which now backs on to an upmarket development of 175 apartments.

The four-storey over-basement office block on Peter Street has a net internal area of 1,643sq m (17,670sq ft) and a generous car parking provision of 31 basement spaces. The building currently produces €252,000 a year in rent, most of it from four main tenants: Sebela Pharmaceuticals, Decawave, Abakus Outsource and the HSE.

The selling price reflects a particularly low net initial yield of 3.22 per cent. However, there are numerous asset management opportunities ahead, including one to reduce the 5 per cent vacancy rate as well as scope to increase the rents at scheduled reviews and expiry dates. The average passing rent is now only about €14 per sq ft – a long way from the going rate of €30 to €35 per sq ft.