Investor may pay £6.5m for offices

NEGOTIATIONS are under way to sell two Dublin office buildings owned by Swedish group Aranas AB. A private investor is believed to have agreed in principle to pay around £6.5 million for the two modern office blocks in a deal which would give him a yield of around 9.5 per cent.

However, the selling agents Hamilton Osborne King, said their instructions were that the two blocks were still on the market. They were in negotiations with a number of parties, Ian French of the agency said.

Witty Dowling of Gunne, who is acting for the private investor refused to comment.

The two buildings - Iveagh Court at Harcourt Street, and 65/66 Lower Mount Street, Dublin 2 - are currently held by a company with tax losses. It is thought likely that any sale would be subject to due diligence.

Hamilton Osborne King is seeking around £8.75 million for a third block, Europa House at Harcourt Street, Dublin 2, which is also owned by Aranas.

The three office buildings are multi-tenanted and are producing a rent roll of £1.3 million. HOK has been telling interested parties that there is potential for a substantial uplift in rents in each of the three buildings.

Iveagh Court has 27,000 square feet of office space and 36 car-parking spaces. The building is producing rents of £350,000 from tenants which include Food Industries, Mitsubishi Trust Finance, Hodgins Percival and Associates, Industrial Consultants International, Source Supplies and Irish Life.

The 18,350-square-foot office block in Lower Mount Street is one of the most distinctive in the city and was designed by A+D Wejchert. The current rental income is £280,000 and the tenants include GAM Fund Management, Fimat-Societe Generate, Point Information Systems and Watson Wyatt Worldwide. The block has 6 car-parking spaces.

Europa House, a 43,500-square-foot office building with 54 car-parking spaces, is currently producing £670,000 per annum. The tenants include the Embassy of Brazil; Bank of Bermuda, Eurotel Marketing, Europa Business Centre and Zurich Insurance Co.

Aranas, a property development and investment company with more than £1 billion in investments across Europe, first entered the Irish property market in 1988. It developed Europa House and 65/66 Lower Mount Street and although both blocks are among the best of their kind in the city, it was not possible to find single tenants for them because of the cyclical nature of the Dublin office market.