A landmark office and retail building at the junction of Dawson Street and Molesworth Street in Dublin city centre is likely to be demolished to make way either for a large department store or a mixed retail and office complex when it is sold shortly on the instructions of Nama.
Patrick Curran of agents BNP Paribas Real Estate is inviting offers of more than €15 million for the former Irish headquarters of Royal Sun Alliance at 13/17 Dawson Street which was acquired by Garret Kelleher's Shelbourne Developments in 2005 for €63.5 million. The extravagant funding had been made available by the former Anglo Irish Bank.
Last month, BNP sold another Shelbourne property, the half-empty Findlater House on Dublin’s O’Connell Street. It was bought for €6.1 million by a UK investor who plans to convert it into a hotel. Kelleher had acquired it in 2005 for just over €30 million.
High-profile location
Although only developed in 1981, the former Royal Sun Alliance block has aged badly and will inevitably be replaced by a larger and more modern block.
The five-storey building has an overall floor area of 3,800sq m (40,902 sq ft) and, according to Curran, the site could, subject to planning permission, accommodate a new mixed retail and office scheme of up to 10,000sq m (107,638sq ft).
As well as its high-profile location on to Dawson Street and Molesworth Street, the block also backs on to Dawson Lane on the opposite side as well as to the rear.
If and when the block is redeveloped, new owners could expect to have retail floor plates of 743 to 929sq m (8,000 to 10,000sq ft) on at least three levels, basement ground and first floor.
Curran describes the sale as “without doubt the best redevelopment opportunity to come to the market in Dublin’s central business district in the last five years”.
Short-term tenancies
He says that with a shortage of quality modern offices already apparent in the city, this was an unrivalled opportunity for a purchaser to take income while working through the planning process before embarking on a redevelopment of the site and taking advantage of improving rental and capital values in the future.
The Dawson Street building is currently let on 16 short-term tenancies at an overall rent roll of €943,612 per annum. This figure will rise to about €1.2 million when the remaining four units are let.
Even with one of the ground floor shops vacant, the retail element is producing rents of €255,000. The coffee shop, trading as Fixx, is paying €120,000 per annum. Three adjoining premises are each renting at €45,000 per annum.
On the upper floors, Centaur Fund Services occupies the largest office unit (499sq m/5,382sq ft) and is paying a rent of €125,000 per annum. The other tenants include Xtralis Global, Alstom Ireland, Allied Risk Management and Q Aviation. Office space in the block is relatively easy to let because of the prime city centre location.
The block is located next to two adjoining New Ireland office buildings which were earmarked for sale in the early part of the summer of 2007 and were confidently expected to make over €60 million.
Values plummeted
Bank of Ireland went so far as to appoint Savills to handle the sale but postponed it at the last moment, apparently because of uncertainty about where it would locate its new headquarters.
At least one of about a dozen developers who had planned to pitch for the five- and six-storey blocks had planned to replace them with a six-storey building with shopping at all levels.
A year later the capital value of both buildings plummeted in the property downturn.
