TWO Irish businessmen have paid £3.5 million for Morrison Chambers, an office high-profile retail and investment which includes the Fred Hanna bookshops at Nassau Street, Dublin 2. The buildings are currently producing a rental income of £340,000.
The property was bought two years ago for £2.5 million by Knockanore Properties, an investment company run by the Kilkenny-based property specialist, Pat Hegarty. It subsequently spent around £250,000 refurbishing the office building, an early 19th century block which stands at the junction of Nassau Street and Dawson Street. Knockanore also owns a retail and office building at the front of the Sweepstakes Centre, opposite the RDS in Ballsbridge, Dublin 4.
The new owners of the Nassau Street property expect to secure a return of 10 per cent on the offices when the remaining suites are occupied. The retail element is currently producing a yield of 8 per cent.
Several groups of investors were in competition for the portfolio not only because of its outstanding location but also because two-thirds of the income is earned from the five shops and the Ulster Bank branch at 1 Dawson Street. The bank pays a rent of £59,400.
One of the advantages of the property is that because of its layout, any number of shops could be sold off if required without affecting the remainder of the investment.
Knockanore achieved a significant growth in rental income since it bought the property. Its letting agent, Liam Lenehan, of Hamilton Osborne King, secured more than a dozen new office lettings in Morrison Chambers where there are now 27 tenants including New Ireland Assurance Company and The Irish Council of the European Movement.
Fred Hanna occupies three of the shops at a combined rent of £88,000 for 5,850 square feet.
The new owners, who were advised by Ann Hargaden of Lisney, are likely to secure an extra £40,000 from rent reviews and leases expiring between May next and July, 1998. A further £38,000 is expected to be generated by May next from retail reversions and vacant office accommodation.
