Park West office block for €3m offers net initial yield of 8.2%

Colliers is guiding a price of €3 million for a standalone office building located in the heart of Park West Business Park, an acquisition which may appeal to an investor seeking a high-yielding investment.

Block 7, Park West Business Park offers about 2,255sq m (24,282 sq ft) of flexible office accommodation over three floors, together with 31 car-parking spaces.

The subject property is producing annual rental income of €270,500 per annum with a weighted average unexpired lease term of 2.6 years. This equates to a net initial yield of 8.2 per cent, reversionary yield of 11.51 per cent and capital value of €124 per sq ft, after allowing for standard purchaser’s costs of 9.96 per cent.

The ground floor is let to Trilogy Technologies on a 10-year lease from August 2018 at an annual rent of €130,500, with a break option in August 2023 subject to six months’ prior written notice. Trilogy Technologies was acquired by Arkphire, an IT procurement and IT service company in 2019.

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The first floor is let to Paragon 28 Medical Devices, a US medical device company, based on a five-year lease from December 2019 at an annual rent of €140,000. Both tenants have carried out extensive fitouts which, the agent says, shows commitment to the space in the longer term.

‘Excellent opportunity’

The second floor, which is currently vacant, has scope to achieve in the region of €120,000 a year once fully let.

Colin O’ Shea, who is handling the sale of Block 7 on behalf of Colliers said, “We believe this is an excellent opportunity for an investor seeking a high-yielding investment opportunity significantly below build cost with scope to increase the rent further on the letting of the vacant second floor.”

Park West, home to companies including Lets Get Checked, Workhuman and Allianz Worldwide, has seen a burst of activity on the commercial property front in recent months. In May, a neighbouring building, Block 8, which is fully let to US-headquartered Exela Technologies since 2014, was put on the market for €3.8 million. Irish tech unicorn Workhuman, recently took additional space in a building adjacent to its existing headquarters in Park West, while Block 17 Park West, which is let to Applegreen and was put on the market guiding €3.5 million, was recently sale agreed by QRE.