Mixed-use Dublin 2 portfolio for €160m

In one of the most significant high-quality investment sales this year, three office blocks and a row of shops and apartments all in Dublin 2 are to be offered for sale at an overall guide price of €160 million by Joe O'Reilly's Chartered Land and the National Asset Management Agency (Nama).

Investors will also have the option to bid for individual assets in the Redwood portfolio, according to joint selling agents Adrian Truick of Knight Frank and Fergus O'Farrell of Savills. With the various buildings extending to 30,300sq m, an annual income stream of €8 million and a weighted average unexpired lease term of 10.7 years, the sale will be of particular interest to German and American investment companies as well as to two Irish pension funds, IPUT and Irish Life.

Most interest is likely to centre on a prestigious office building at 2 Grand Canal Square, which has a guide price of €80 million, equating to a net yield of 5 per cent. The eight-storey over basement block designed by Daniel Liberskind overlooks Grand Canal Square and has an overall floor area of 14,000sq m.

One of the most striking features of the block is its full- height atrium above a spacious reception and lobby area with access from both Grand Canal Square and Macken Street.

Capita Financial Services occupy 4,830sq m while William Fry Solicitors are due to move into a further 8,639sq m from next October. The investment will produce an income of about €4.44 million a year with potential for a further rental uplift when the remaining ground floor suites are let.

Penthouse level
The two lettings made by Chartered Land have the advantage of being under-rented at €29 per sq ft, opening the way for a significant uplift on the next reviews.

Only one of the office blocks going for sale at the request of Nama is in receivership. The Observatory at Sir John Rogerson's Quay in the south Dublin docklands was developed by Derek Quinlan and Bernard McNamara and launched just as the property market crashed in 2007. Nama expects to secure about €40 million for the six-storey block, which has a floor area of more than 8,000sq m with a further 1,200sq m of live/work space set out in eight units and two retail units.

US financial services firm Morgan Stanley occupies 371sq m at penthouse level and while Publicis Dublin and online payments service provider Realex Payments are also based in the block the letting agents still have to complete negotiations to lease 4,119sq m to Riot Games. This will leave only a single unit of 115sq m available on the ground floor.

The selling agents calculate that the rent roll should be about €2,169,500 when rent- free periods run out. At a €40 million guide price the yield should be about 5.5 per cent.

Knight Frank and Savills are guiding €23.5 million for One Clarendon Row, a six-storey over double basement mixed- use building developed by Chartered Land on South King Street, a short distance off Grafton Street.

Duplex apartments
The office and retail accommodation account for 6,130 sq m and there is scope to extend the block in the rear service yard and Chatham Court. The upper floor offices covering 2½ floors are rented by Hutchinson 3G Ireland while the remaining half floor is used by Demand Media Europe.

The block also includes a one-bedroom penthouse apartment. Chartered Land is including in the sale a 10 per cent interest in the retail element where Warehouse, H&M and Zara hold long-term leases. The mixed use block is rented at €1.3 million a year, a net initial return of 5.3 per cent on a €23.5 million selling price.

Whoever buys One Clarendon Row is also likely to be interested in the immediately adjoining Chatham Court, which fronts on to Chatham Street and includes nine ground floor retail units of 455sq m and nine overhead duplex apartments.

There are also 13 car-parking spaces in the service yard shared with One Clarendon Row. The agents are quoting €10.5 million for the mixed use complex, which is producing a rental income of €534,000. The yield in this case would work out at about 5 per cent.