Denis O’Brien docklands investment goes on letting market

Billionaire businessman Denis O’Brien is well on the way to making another fortune from three former derelict buildings in the Dublin docklands. All three were bought at knockdown prices during the property crash.

The standalone blocks have now been meticulously restored and upgraded and two of them let to overseas companies at or near record high rents.

The third investment property, a campshire building fronting on to the river Liffey at Sir John Rogerson’s Quay, is expected to be appeal to one of the high-tech companies in Silicon Docks when it goes on the letting market today.

The two detached campshire buildings, which date from the 1880s, were originally held by the Dublin Docklands Development Authority and were passed on to Nama for sale in 2012, when the Government decided to dissolve the disgraced docks authority.

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At the time there were few investors interested in acquiring rundown properties in the docklands. O’Brien took a different view and bought the two double height campshire buildings for around €950,000. He then went on to purchase a rundown Victorian warehouse at Grand Canal Quay for a figure thought to be in excess of €500,000.

An estimated €3 million was spent on a full renovation of the warehouse (3 GCQ) and it was duly let to Zalando, Europe's biggest dedicated online fashion retailer, at an annual rent of €850,0000. This is a record of more than €70 per sq ft for the 974sq m (10,484sq ft) at ground floor level. Zalando also has the use of a further 800sq m (8,611sq ft) of ancillary accommodation on the restored lower ground floor, according to James Mulhall of letting agents Murphy Mulhall.

Since then, the first of the campshire buildings (81B Campshires) formerly known as the BJ Marine Warehouse, has been modernised and rented by an American company, Tenable Network Security, for about €500,000 annually. Again, that figure breaks back to around €60 per sq ft.

Joint agents Murphy Mulhall and Knight Frank are now seeking a rent of €260,000 per annum for the smallest of the campshire buildings at Sir Rogerson's Quay, where the floor area is 342sq m (3,681sq ft).

The docklands portfolio is well on the way to bringing in an annual rental income of €1,610,000 – not bad for three buildings bought for some €1.5 million and upgraded at an estimated cost of more than €6 million.

While there has been no indication that O’Brien intends to sell the three buildings when the third one is finally let, investment funds could be expected to pitch for a yield of about 5 per cent if they were to buy the three assets. At that valuation the three buildings would be expected to make at least €32 million – and rising.