German investor fund offers over €160m for Dublin docklands office block

German institutional investor Triuva is closing in on a deal to buy the first of five office buildings being developed in the Dublin docklands by Irish property company Ballymore and its Singapore partner, Oxley.

The fund has emerged as the highest bidder at €164 million for No 1 The Landings, which attracted 10 bidders – one Irish, four European, one Middle Eastern and four Asian. The deal is expected to close in February or March when the 10-storey block on North Wall Quay reaches “practical completion”.

Joint selling agents CBRE and Knight Frank had been seeking offers of about €150 million for the investment. The higher-than-expected selling price means Triuva will have to settle for a net initial return of 3.95 per cent.

The yield will be the lowest since Irish Life agreed a return of less than 4 per cent when it paid €121 million in June 2014 for a relatively new office block at 2 Grand Canal Square, rented by Capita Financial Services and William Fry solicitors. High-quality office blocks such as this one in the docklands have soared in value since then.

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Agreed rent

The building to be acquired by Triuva extends to 13,300 sq m (143,158 sq ft) and has been fully let to the National Treasury Management Agency at an agreed rent of €538 per sq m (€50 per sq ft) and €4,000 for each of the 44 car parking spaces. The annual rent roll will be just over €7 million, depending on final measurements. The 25-year lease will include a break option after 15 years.

Dublin Landings is one of the most ambitious regeneration projects undertaken in Dublin and will, on completion, extend to more than 100,000 sq m (1,076,380 sq ft). In addition to the offices, retail and restaurant facilities, there are also plans to develop 297 apartments.

A second office block with a floor area of 8,825 sq m (95,000 sq ft) and now nearing completion in The Landings is expected to be offered for letting in the coming weeks, and once a tenant is found it too will be offered for sale on the international market.

The success of the first sale to Triuva has been greatly helped by its prime docklands location and the fact the rental income is guaranteed by a State agency. The National Asset Management Agency has a 20 per equity stake in the entire development.

The stronger-than-expected price to be paid for No 1 Dublin Landings will be seen as major endorsement for Sean Mulryan’s Ballymore company in the early stages of what is an unusually large development.