Businessmen buy office block for £9m

ONE of Dublin's largest office blocks, Lansdowne House, opposite Jurys Hotel at Lansdowne Road, Dublin 4, has been sold to a group of Irish businessmen for slightly over £9 million. It is the most significant sale of an office investment for over a year.

Hardwicke held two-thirds of the equity in the 30-year-old building and Irish Life owned the remaining stake. Negotiations to sell the block have been going on for several months and under the terms finally agreed, the new owners will earn a return of 8 per cent on their investment. The group is understood to include more than a dozen businessmen, who were represented by Bill Nowlan, former director of property investment at Irish Life.

The 65,000-square-foot building is currently producing a rent roll of £800,000 per annum with £720,000 of it coming from the Office of Public Works, which is renting the eight upper floors under a 65-year lease from 1967. The lease provided for a break clause last year but the OPW opted to retain the building even though it vacated several other blocks in the city. The next break option does not arise until the year 2013. AIB operates a bank branch on the ground floor, for which it pays a rent of £80,000 per year.

The OPW has refurbished the two top floors and the other floors are also expected to be upgraded in the next few years for the tenants, which include the Revenue Commissioners and the Department of Finance. The OPW's rent averages out at £10.50 per square foot and £800 for each of the 100 car-parking spaces. The next rent review is due in 2003.

AIB's lease of the ground floor does not expire until 2003 and as this is reputedly one of the bank's most successful. branches in the city, it seems certain that it will want to remain on.

Funding for the acquisition of the block is being provided by Irish Intercontinental Bank.

Lansdowne House was built on a speculative basis in 1966. It was initially let at £1.50 per square foot and £25 per car-parking space. The IDA's headquarters were based for many years at Lansdowne House until it moved to Wilton House, at Wilton Place.