Avestus eyes 13% uplift with €53m Harcourt Road sale

Agent CBRE expects to see a strong level of interest from European, US and Asian investors in the sale of blocks 4 and 5 Harcourt Centre, which it has brought to the market at a guide price of €53 million.

Located at the heart of Dublin’s central business district, the investment consists of two adjoining properties comprising 5,016.7sq m (54,000sq ft) of office accommodation and 2,238sq m (2,400sq ft) of retail space.

The sale of the property at or above the guide price would provide its current owners, real-estate investor Avestus Capital Partners and asset manager Ares Management, with a return of at least 12.7 per cent on the €47 million they paid in September 2017 when acquiring it from its original developers, the Clancourt Group.

Blocks 4 and 5 Harcourt Centre offer the potential purchaser the opportunity to secure immediate rental income of €3.02 million per annum, which reflects a yield of 5.26 per cent.

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Block 4 comprises a six-storey over basement building extending to 2,603.14 sq m (28,020sq ft) of office accommodation and 132.2sq m (1,423sq ft) of retail accommodation, together with 23 car-parking spaces. The building is finished to ‘Cat A’ standards with good levels of natural light. The design of the building allows for flexibility and there is potential, according to the selling agent, to drive value through the provision of additional floors to this block, subject to planning permission. The combined rent roll of the building is about €1.42 million per annum and is derived from lettings to Regus and Cafe Sol.

Block 5 comprises a six-storey over basement building extending to about 2,487.2sq m (26,722sq ft) of office accommodation and 89.93 sq m (968 sq ft) of retail accommodation, together with 17 car-parking spaces. The building was constructed in 2001 and refurbished in 2015. Those works saw the addition of one extra floor which was successfully let in 2016 to Zara. As is the case with block 4, there is an opportunity for the purchaser to enhance the value of the building through the provision of additional floors, subject to planning permission. The combined rent roll of the building is €1.6 million per annum, and is derived from lettings to SMT Fund Services, the National Transport Authority and Zara.

While the subject property is situated within close proximity to St Stephen’s Green and Dublin’s prime central business district, Harcourt Road and its immediate environs have in recent years become a core office location in their own right.

Consolidation

Existing occupiers within the vicinity of 4 and 5 Harcourt Centre already include Deloitte, Aviva, EY, Bank of China, AIB, Mazars, Arthur Cox, Eversheds and Capita. A number of developments in the vicinity are expected to consolidate the area's standing as a prime office location such as Hibernia Reit's development of offices on the site of the Garda's regional headquarters at Harcourt Square and Clancourt Holdings' proposed delivery of a major office scheme at 5-8 Charlemont Street.

The respective arrivals of flexible workspace giant WeWork at Charlemont Exchange and online retail giant Amazon at McGarrell Reilly's Charlemont Square scheme have also served to bolster Harcourt Road's status as a hub for major international employers.

Blocks 4 and 5 Harcourt Centre also benefit from a range of amenities with numerous cafes, bars and restaurants nearby, while the five-star Conrad Dublin and boutique Dean Hotel are within walking distance.

The area is well served by public transport with the Luas green line and Dart services within a short walk.