Deka to grow Irish portfolio with €41.5m purchase of Airbnb’s European HQ

Deka Immobilien is closing in on the purchase of the European headquarters of Airbnb in Dublin's south docklands.

While the sale of 8 Hanover Quay has yet to be completed, it is understood that Deka has agreed to pay in excess of the €41.5 million joint agents BNP Paribas Real Estate and Savills had been guiding when they brought it to the market last September. The property is being sold on behalf of a fund managed by BNP Paribas Real Estate Investment Managers (BNP Paribas REIM).

News of Deka's move to buy the Benson Street building comes just days after The Irish Times reported on its bid to secure ownership of Penneys' new distribution hub in Newbridge, Co Kildare and of a significant stake in Facebook's new European headquarter campus in Ballsbridge, Dublin 4. While it lost out in the first instance to fellow German investor Union Investment and to US private equity giant Blackstone in the latter process, Deka continues to grow its Irish real estate portfolio.

Earlier this year, it agreed to pay sums of €22 million and €164 million respectively to acquire the Grafton Street premises of fashion retailer & Other Stories and the headquarters of law firm Matheson at Riverside IV in Dublin's docklands.

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Clayton Hotel

Last year, it acquired the Baggot Plaza property, which Bank of Ireland has been renting since 2015, from Kennedy Wilson for €165 million, and purchased the Clayton Hotel Charlemont from Dalata Hotel Group in a sale-and-leaseback deal for €65 million.

In 2019, Deka purchased the Marker hotel in Dublin for €134 million, adding to its collection of other Irish hotel assets, which includes the Clayton Hotel Burlington Road and the Gibson Hotel. The German-headquartered investor entered the Dublin office market in late 2019 with the purchase of the Reflector office building on Hanover Quay for about €155 million.

Deka’s determination to secure Airbnb’s European headquarter premises for its portfolio isn’t surprising. Outside of its strong tenant covenant and attractive yield, the property adjoins the Reflector and is linked to it on foot of the consent given by BNP Paribas REIM to break the ground floor boundary wall to allow for a seamless working environment for Airbnb employees. The company operates from 3,715sq m (40,000sq ft) across 2½ floors in the six-storey-over-basement Reflector building, while its Europe, Middle East and Africa headquarters occupy all 3,747sq m (40,343sq ft) of office accommodation at 8 Hanover Quay.

Bicycle factory

The original warehouse at 8 Hanover Quay served for many years as the former Raleigh bicycle factory before being redeveloped by Targeted Investment Opportunities, a joint venture involving Nama, Oaktree and Bennett Construction.

Practical completion was reached in 2016 and today the building benefits from a full-height central atrium featuring a natural auditorium that has made it one of the most-photographed office interiors in Dublin.

Number 8 is let in its entirety to Airbnb Ireland Limited under a full repairing and insuring lease, with a full parent company guarantee in place from Airbnb Inc, which underwent an initial public offering in December 2020 and has a market capitalisation in excess of $100 billion.

The next break option in Airbnb’s lease is in March 2030, giving 8 Hanover Quay an attractive term certain of 8½ years, and a weighted average unexpired lease term of 14½ years with the expiry in 2036.