Credit Suisse sells Grand Canal office block for €8m profit

Switzerland's second largest bank, Credit Suisse, will make a profit of almost €8 million through the sale of an office investment it bought only two years ago on the Grand Canal in Ranelagh, Dublin 6.

German fund Quadoro Doric Real Estate has just bought One Grand Parade for €26 million – €3 million above the guide price – after intensive bidding between Quadoro and a number of international funds expecting new office values here to continue to rise.

The distinctive six-storey glazed block with a floor area of 2,929sq m (31,534sq ft) and 15 basement car parking spaces was completed in 2009 just as the property market crashed. Software company Zendesk International initially moved in to occupy 1,905sq m (21,000sq ft). Two of the remaining floors were later let to the Kuwaiti embassy and Oasis Global Management Company.

Current rents range from €279 to €565/sq m (€26 to €52.50/per sq ft) and have obvious reversionary potential. Even with the present rent roll at just over €1 million, Quadoro Doric can expect a net yield of about 3.8 per cent based on a €26 million valuation.

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The new owner will apparently have an opportunity to introduce significant rental changes given that the weighted average unexpired lease term is only three years and includes an earlier expiry or a break option. Zendesk is expected to relocate to 55 Charlemont, a new office building under construction on the opposite side of the canal. In the meantime, car parking spaces are rented at €3,500 per annum.

The office block has open plan floor plates, high-quality natural light and floor-to-ceiling glazing with superb view along the Grand Canal. There are two 10-person lifts, staff showers and a bicycle store at basement level.

The location of One Grand Canal on the edge of the south inner city has considerable appeal both to employers and investors. The block is also likely to benefit from the pending development by Hines of a new office scheme on the grounds surrounding the former headquarters of the Irish Nationwide Building Society.

There has been considerable speculation that Credit Suisse may intend to set up a European hub in Dublin to service hedge fund clients. There have also been reports that it is preparing to move jobs out of London following the UK’s decision to leave the European Union.

The latest sale of One Grant Parade was handled by Jonathan Hillyer of Cushman & Wakefield. Michele McGarry of Colliers International advised Quadoro Doric.