THE Dublin firm of solicitors, Matheson Ormsby Prentice (MOP), is in negotiations to occupy a £7 million office block, which is to be developed at Herbert Street, Dublin 2.
If the pre-letting goes ahead at an agreed rent of £17 per square foot, it could lead to a new round of office developments because of the prospect that the higher rent level will be sustained for newly-completed space.
Although formal contracts between MOP and the developer, John Ronan, have not yet been completed, it is understood that a broad agreement has been reached on most of the leasing terms for the 47,000-square-foot building, Connaught House. However, Donal Roche, managing partner of MOP, said a contract had not yet been agreed. "No deal has been done and there is no certainty at this stage that a contract regarding this project will be finalised."
If agreement is reached, MOP will be paying a rent of £910,000 per annum, equating to £17 per square foot. It will be the first significant letting at this rent level. MOP will be paying a reduced rate for 6,227 square feet of storage space in the lower ground floor and £1,250 for each of the 64 car-parking spaces. The 25-year lease will not provide for any break clauses. For his part, Mr Ronan has offered to indemnify MOP on the rent of the first floor of 9,363 square feet if it is not sublet within the first three years. Under the terms being considered, MOP would be allowed to surrender the lease of its existing building at Burlington Road, which is also owned by Mr Ronan.
MOP is currently paying a rent of £265,000 - the equivalent of £13.50 per square foot - for its present accommodation of 18,000 square feet, which it has occupied since 1988. The company is believed to be anxious to move to larger premises because of its fast expanding practice. It is one of the country's top five legal firms with a staff of 70 lawyers.
Palmer McCormack is handling negotiations for Mr Ronan and Hamilton Osborne King is acting for MOP. Spain Courtney Doyle are the joint letting agents.
Work on the new block is to begin early in April and is expected to be completed by July 1977. The developer is to meet most of the fit-out costs. Connaught House will stand five storeys over a basement car-park, with a double height entrance foyer.
A pre-letting of the building will be seen as an encouraging start to the year. Although a rent of £17 per square foot has been struck for a number of small office suites, it has not been achieved in recent years for a large office block outside of the IFSC.
The upward movement in rents underlines the shortage of high quality new space and the reluctance of developers to build until pre-lettings can be negotiated at rents of at least £17 and £18 per square foot.
If the higher rents are sustained, it will encourage developers to proceed with a number of speculative office schemes. There are sites available with planning permission for around 800,000 square feet of new space.
