Standard Life buys IFSC buildings

Standard Life has re-entered the Dublin office investment market with the purchase of two buildings at 3 and 5 Custom House Plaza in Dublin's International Financial Services Centre for €24 million. The off-market deal will show a net yield of 7 per cent.

The two investments near Connolly rail station form part of a complex of six buildings linked in to a striking atrium which were developed in the 1980s and sold to private investors in a position to avail of valuable tax breaks. The two blocks extend to 5,574sq m (60,000 sq ft) and produce a rent roll of €1.7 million from several high-profile tenants, including Maxol, Mitsubishi, Abtran and Citco. Citco, a leading financial services group, is the largest occupier, renting two floors in one block and another floor in the second property.

Lisney, which acted for the vendor – a family investment fund – is seeking tenants for about 696sq m (7,500sq ft) which has been vacant for some time. Rents in the two buildings are generally in the mid-€20s a sq ft (about €269 a sq m) – well below the going rate in the IFSC – and are due to be reviewed in 2017.

The €24 million selling price equates to a valuation of €4,305 a sq m (€400 a sq ft).

Michele Jackson of agents TWM Select advised Standard Life on the acquisition.

A spokesperson for Standard Life said the deal reflected its continued confidence in the Irish real estate market and reiterated its view that now was the time to invest in Dublin, which “is enjoying a full and continued economic recovery.”

The company added that Ireland would be a focus for future investment as it continued to be one of the fastest growing economies in the euro zone and the supply/demand characteristics of Dublin’s office market continued to be attractive.

Standard Life bought the Cineworld cinema complex in Dublin’s Parnell Street last December for €33.8 million – almost €12 million more than the UK-based Quadrant Estates paid for it a year earlier. The company also holds two office investments at 89 and 91 St Stephen’s Green.

The shake-up in the Dublin investment market following the crash has led to at least four other significant sales in the IFSC over the past year.

These were 5 George's Dock, sold for €40 million; 2 Harbourmaster Place, €37.85 million, Guild House & Commerzbank House, €30.75 million, and New Century House, €47 million. In 2013 La Touche House changed hands at €35 million, a year earlier Stack A made €7.3 million and in 2010, 2-3 Exchange Place fetched €4.25 million.