Three years after the big sell-off of commercial buildings got under way, a French fund has just become the first from that country to have bought a commercial property investment in Dublin.
BNP Paribas Real Estate Investment Management is paying €32 million for the planned European headquarters for Airbnb, which is due to be completed next month at Hanover Quay in the south Dublin Docklands. At that valuation, the equivalent yield will work out at an attractive 5.3 per cent while the capital value will reach €8,955 per sq m (€832 per sq ft).
The fund, with €20 billion of assets under management, is expected to be joined by a number of other new international players looking for prime investments in the new round of sales about to get under way.
Some of the overseas funds that acquired distressed properties in recent years will also be hoping to make a significant profit following the recovery in valuations and the continuing growth in the labour market. Several companies that bought a range of investments in property loans are expected to offload some of these assets in the coming months.
Kenneth Rouse, of Dublin-based BNP Paribas Real Estate, who acted for the French fund, said it was an important acquisition for his colleagues as it gave them exposure to a new jurisdiction. The fund had been encouraged by the Irish recovery, and particularly the robust employment growth, which was having a positive impact on office take-up.
“Additionally, from a relative value perspective, Dublin remains at an attractive point in the cycle from rental and capital values below their pre-crisis peak, compared to other continental markets,” he said.
Lease
Airbnb Ireland, with a guarantee from Airbnb Inc, has agreed a 20-year lease of the two-storey-over-basement waterfront building, which will extend to 3,574 sq m (38,471 sq ft). The investment will generate an initial rent of €1,475,000, with a fixed uplift resulting in the rent rising to €1.7 million in 2021.The lease will provide for a now standard tenant break in year seven.
The US-based Airbnb corporation was founded in 2008 as an online marketplace that allows people to liaise and book accommodation around the world. The company was recently valued at $25 billion ($22 billion).
Unlike the standard high-rise glazed office blocks in the docklands, the Airbnb offices will be located in an existing stone and brick warehouse.
Inside, the retained facade is a modern open-plan office built around a light-filled atrium running through the centre of the building. The fit-out will include exposed steel columns, raised access floors, wooden detailing on the suspended ceilings and metal roof lights.
There will also be an enclosed courtyard garden at ground level and a first-floor balcony providing views over the Grand Canal Dock area.
RKD handled the design of the new Hanover Quay facility, which is being built by Bennett Construction in a joint venture between the Los Angeles-based Oaktree Capital Management, the Bennett Group and Nama.
Brendan Delaney, of Savills, said the sale was a further endorsement of the Irish investment market and the continuing strong performance of the office sector. The sale illustrated that core investors and new entrants were attracted to Ireland, which was now seen as entering a period of stability.
