OfficeMarket: A legal firm has taken a once-off opportunity to buy out an 2,015 sq m office building, writes Jack Fagan, Property Editor
Leading Dublin solicitors O'Donnell Sweeney have agreed to pay over €14 million for Block B of the Earlsfort Centre which they have been renting from Royal and Sun Alliance. The lease had another 18 years to run.
The legal firm's adviser, Ann Hargaden of Lisney, negotiated the purchase shortly before the block was due to go for sale along with four retail investments in Henry Street.
The sales will allow Royal and Sun Alliance to withdraw from the Dublin property market, a move likely to have been brought about by the company's desire to increase its weighting in the equity markets now that there are signs of a possible recovery on the way.
Royal Liver is also in the throes of offloading some of its older Dublin property investments to pursue the same strategy. The new property climate has given the partners in O'Donnell Sweeney (there are 13 of them and 110 staff) what is probably a once-off opportunity to buy out the 2,015 sq m (21,700 sq ft) building which was completed towards the end of the 1980s opposite the National Concert Hall. It was occupied until about three years ago by Goodbody solicitors who relocated to their own newly completed block in the IFSC.
O'Donnell Sweeney has been paying an annual rent of €830,000 for the building (€376 per sq m/€35 per sq ft) and 14 car-parking spaces. The purchase price equates to a yield of about 5.5 per cent.
Managing partner, Joe Sweeney, said the opportunity to purchase arose just as they were considering going to considerable expense to improve the internal facilities.
Michael Clarke of Hamilton Osborne King, who advised Royal and Sun Alliance, is also handling the sale of the four retail investments in Henry Street which are likely to make around €40 million.
Though there is interest in the buildings from some institutional investors, the likelihood is that they will be bought in individual lots by private investors.
Earlier this summer, the Japan store - a short distance away on Henry Street - was sold for the equivalent of 3.25 per cent.
Three of the shops are rented by leading UK multiples - HMV, Boots and Clinton Cards - while the fourth is occupied by Irish fashion multiple Extrovert.
Zone A rents on Henry Street stand at around €4,305 per sq m (€400 per sq ft) compared to a new figure of €6,201 per sq m (€575 per sq ft) recently recorded on Grafton Street.
