State agency pays key money for offices

THE State-run National Medicines Board has become the first company in more than a decade to pay key money for office accommodation in Dublin.

The board is believed to have agreed to pay a premium of over £150,000 for the leasehold interests in a block at the Earlsfort Centre, opposite the National Concert Hall, which is shortly to be vacated by the computer software company ACT Kindle.

The payment underlines the shortage of hi-tech office space in south Dublin. There has been keen competition in recent months for available buildings. particularly those with more than 20,000 square feet of space.

The National Medicines Board, which has replaced the National Drugs Advisory Board, will be paying an annual rent of £282,000 for the 22,752 square feet of office space in Block A of the Earlsfort Centre and for 25 car parking spaces. Formal contracts for the assignment of the lease have yet to be completed.

Mr Tony O'Loughlin of Jones Lang Wootton, who acted for the Medicines Board, yesterday confirmed that a premium had been paid but refused to say how much money was involved. He said they agreed to the payment on the basis of a current rent of £11.60 per square foot and the fact that the block was fully fitted out. Kindle would be leaving behind partitioning which was ideally suited to the needs of the National Medicines Board.

Mr Conor Keaveney of Palmer McCormack, who is handling the assignment of the lease for Kindle, had been seeking £300,000 for their interests in the six-storey building.

An indication of how rents have hardened in the Earlsfort Centre was provided this week when the South African Embassy completed contracts to lease 5,200 square feet at £17 per square foot.

The space has been occupied by Pfiser Bank under a short-term lease before it moves into the International Financial Services Centre. Jones Lang Wootton also handled this letting.

The National Medicines Board is now to attempt to find a replacement tenant for the 11,600 square feet of office space it occupies at 63/64 Adelaide Road. It is currently paying a rent of £11 per square foot for the block under a lease which has another 25 years to run.

Kindle is to be relocated in July to a new headquarters building of 64,243 square feet which is under construction at the East Point Business Park in the Dublin docklands. The company will be paying a rent of £650,000 for the building which is to be sold on to investors for £7.25 million.