Canada Life seeks £2.6m for modern office in Pearse Street

WITH the property investment market still only ticking over because of the scarcity of opportunities, Canada Life is set to capitalise on the shortage by offering for sale Goldsmith House, a modern office building at Pearse Street, Dublin 2.

Agents Palmer McCormack are seeking £2.6 million for the block, which is currently producing a rent roll of £208,000 per annum.

If they secure that price, the net yield will he 8.42 per cent.

Investment activity is considerably more active in the retail sector where private investors and institutions are constantly looking for shops with strong tenants, particularly those in tax designated areas.

Last week, a private investor agreed terms at about £2.4 million for three retail units owned by AIB Investment Managers at The Square in Tallaght. The yield in this case - 6.6 per cent - was the lowest to date in Tallaght but it rises to 7.6 per cent when the tax breaks are taken into account. The new owner can claim capital allowances of 5 per cent per annum for the next 19 years.

The three units will produce rents of £174,750 for the new owner. Jewellers H Samuels will be paying £77,000; Magic Boutique's annual rent is £70,000 and Bank of Ireland contributes £27,750 for a small unit.

Goldsmith House, a five-storey block over a basement car-park is let to the Office of Public Works under two separate leases. It has 19,525 square feet and 24 car-parking spaces.

The next rent review is due in just over three years and Palmer McCormack says that even adopting modest rates of £9.50 per square foot on the offices and £1,000 for car-parking spaces, the reversionary rent will rise to £224,000.

The ground floor and nine car-parking spaces are held under a 35-year lease from 1985 with upwards-only reviews every five years.

The upper floors and 15 car-parking spaces are rented under a 35-year lease from 1980 with five-yearly upwards and downwards reviews.