Smurfit HQ to be sold by receiver

THE SMURFIT Kappa headquarters at Beech Hill in Clonskeagh, Dublin 4, bought by an investment group for €25 million in 2003, is expected to be offered for sale in the coming weeks following the appointment of Savills as a fixed charge receiver.

Nama has already bought in the distressed loan which Anglo Irish Bank made available to the consortium to acquire the office buildings and adjoining land as well as a number of other properties in the city. The consortium is headed by Paddy Kelly, John Flynn and their families together with Alanis, which is controlled by the McCormack family. The group has been a major player in the property market.

Savills’ brief to maximise the value of the portfolio for all the parties involved will inevitably lead to the sale of the two office blocks with a floor area of 2,787sq m (30,000sq ft) and a redevelopment site of seven acres. There are 70 car parking spaces alongside the office blocks as well as a helicopter landing pad.

A senior estate agent said yesterday that the property was unlikely to sell for more than €10 million because of the overall fall in land values and office rents and the scarcity of bank funding.

Smurfit Kappa is currently paying a rent of €500,000 for the office space under a lease which is due to run out towards the end of 2013. It will be no great surprise if Smurfit offers to buy the property where its HQ has been based for more than 30 years.

It is also thought likely that UCD may pitch for the office complex and lands given that they immediately adjoin the college campus. The college and the consortium had reached agreement on the future of the Smurfit HQ after securing planning permission for a mixed development which included a new science and technology building for the college, 3,000sq m (32,300sq ft) of offices and 160 apartments.

Though that arrangement ended once Nama intervened, the college obviously has a need for extra facilities and will not want to lose this opportunity to enlarge the campus.

There are also a small number of developers who could easily fund the Smurfit site and would be happy to have the tenant in place for another two years while they seek revised planning permission.

Savills has also been given the task of letting or selling seven retail units at Smithfield owned by the same consortium. An adjoining unit has been let to Paddy Power bookmakers and Tesco has sought planning permission to open an express convenience store in two of the units. Rents are likely to be in the region of €215 per sq m (€20 per sq ft).

Dunnes Stores initially expressed an interest in going into the Smithfield development but were turned down after Paddy Kelly’s son, Simon, opted to put a Fresh convenience store into the space. The adjoining shops have been difficult to let since then.