A fund managed by Davy Real Estate is seeking €26.5 million for a prime office investment on Lower Hatch Street in Dublin city centre.
While the sale of “20 on Hatch” at that level would provide a purchaser with a net initial yield of 8.07 per cent according to selling agent Savills, the figure represents a 34 per cent drop in the €40 million valuation the Davy Irish Property Fund ascribed to the building in 2018. The fund paid €27.5 million to secure ownership of 20 on Hatch in 2014.
The subject property comprises a six-storey-over-basement office building of 44,735sq ft (4,156sq m), and is leased in its entirety to the medical-device specialist Medtronic and to the global financial services provider MetLife.
MetLife is the majority occupier at the property with five floors taken up by its operations. In 2018, the company extended its existing lease term for 10 years, at an agreed rent in excess of €50 per square foot. 20 on Hatch serves as Metlife’s operational office headquarters for western and central Europe. The company expanded its Irish presence further in 2017 when it opened a global technology campus in Galway.
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While Medtronic’s operational headquarters are in Minneapolis, Minnesota, the company’s principal executive offices are located at 20 on Hatch. The company occupies the remaining floor of the building.
The weighted average unexpired lease term (Wault) is about three years according to Savills. The building has a C3 Ber rating at present, and as such, would require investment to bring its sustainability credentials up to the standards typically found in the latest generation of office buildings.
20 on Hatch occupies a much sought-after location in the heart of Dublin’s central business district. Employers in the immediate area include blue-chip law firms Arthur Cox and Eversheds Sutherland, and Big Four accountants and consultants Deloitte.
Commenting on the sale, Fergus O’Farrell of Savills said: “This is a prime opportunity to secure a prestigious office investment in a sought-after Dublin location. With a strong tenant base and the advantage of significant repositioning potential, this property represents a strategic acquisition for discerning investors.”
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