Sam Stephenson office block for €8.5m

With the investment market still running strongly and attracting

more buyers, Savills is to offer for sale an unusual office complex in Dublin's south inner city designed by the late Sam Stephenson.

Marguerite Boyle of Savills is quoting a guide price of €8.5 million for Molyneux House on Bride Street. It is occupied by RSM Farrell Grant Sparks, an audit, tax and advisory firm.

The investment will show an initial yield of 11.83 per cent after standard acquisition costs are taken into account.

The block incorporates a converted church building along with a modern extension providing 2,386sq m (25,683sq ft) of floor space.

The extension was added in 2003 in conjunction with the development of the high-quality Adelaide Square apartments on an adjoining site.

Rent
RSM Farrell Grant Sparks is paying a rent of €1,038,000 under a 25-year lease from 2003 with a tenant break option in 2018. The rent works out at €430 per sq m (€40 per sq ft), while the selling price equates to €3,552 per sq m (€330 per sq ft). The top floor of the old church building, extending to 258sq m (2,787sq ft), is sublet to Zenith Media Ireland.

There are 17 parking spaces on site – 10 in the basement and seven at surface level.

Ms Boyle said she was expecting overseas as well as Irish interest in the investment because of the attractive passing income, the improving office occupier market and investor appetite for office buildings in the city centre.

The church was converted in 1973 by Stephenson's company, Stephenson Gibney & Associates, which was responsible for the design of high-profile buildings in the city including the ESB headquarters on Lower Fitzwilliam Street and the Central Bank.

Molyneux House was originally the site of a weekly bird market reputed to have dated back several centuries.

New season
The sale marks the opening of the new selling season, which is expected to see a steady flow of properties coming on the market over the coming months.

Though modern, well-let Dublin office blocks remain the most popular assets with overseas purchasers, the choice is now expected to include a range of retail properties, including a handful of heavily indebted provincial shopping centres.

Some overseas buyers who bought portfolios last year are planning to offload individual properties to cash in on the strong demand both from overseas and Irish buyers.

There will also be the continuing flow of “consensual sales” by local investors with the agreement of their anxious bankers.

The pace of sales over the coming months will be closely monitored not only by the overseas funds but by the newly launched Hibernia Reit, which has yet to find suitable investment properties.