One of Dublin’s most prestigious modern office blocks, the Harcourt Building at the top of Harcourt Street, is expected to attract the highest level of bidding to date for a distressed property asset in the city.
Domhnaill O’Sullivan of Savills is quoting a guide price of €28 million for the 10-year old building which is being sold on the instructions of David Carson of Deloitte who was appointed receiver to David Agar’s Profile Properties by Ulster Bank.
Prime location
The High Court was told last July that loans on the Harcourt Building amounted to €47 million. However, Ulster Bank agreed a settlement with Mr Agar that led to it writing off swaps and loans worth €30 million as well as covering Mr Agar’s legal costs of around €1 million.
The case involved the mis-selling of interest rate swaps – insurance policies sold to borrowers to protect them against future interest rate rises on their loans. The case was closely followed in the UK where a number of banks also settled mis-selling cases.
Harcourt Building has proven one of the most successful office blocks in the city in recent years and is producing a rent roll of €2,524,310 per annum. At the asking price it will show an initial yield of 8.63 per cent once standard acquisition costs are taken into account.
Savills has every reason to expect a larger than usual level of bidding for the block because of its prime location in the central business district, the high quality fit-out and the fact that the lot size appeals to a range of buyers, including Irish-based funds which are gearing up to re-enter the market.
The main tenant in the six-storey over basement building is Investec Bank, the specialist banking and asset management group, which occupies the top four floors and contributes 65 per cent of the overall rental income. It pays a rent of €1,621,122 for 3,465sq m (37,298sq ft), equating to €467.84 per sq m (€43.46 per sq ft).
Investec’s lease has another five years to run and it will be no surprise if it is one of the bidders for the building which has an overall floor area of 5,217.9sq m (56,164sq ft) and 44 basement car-parking spaces.
Another international group, Man Investments, pays a rent of €577,572 for more than 1,123sq m (12,098sq ft), breaking back at €513.90 per sq m and €47.74 per sq ft.
Glazed atrium
The other main office tenant, Cuna Mutual, contributes €229,614 for almost 433sq m (4,660sq ft) of space – equating to €530.41 per sq m and €49.27 per sq ft.
Starbucks, the only retail tenant, pays a rent of €70,000 per annum (€743.89 per sq m/€69.10 per sq ft) for a ground floor area of 94sq m (1,013sq ft).
The car-parking spaces are rented by Investec at a total cost of €26,000.
Harcourt Building occupies a prominent corner position facing west onto Harcourt Street and south onto Adelaide Road. The block is distinguished by an impressive glazed atrium designed in a quadrant shape and featuring two high-speed glass elevators which rise 23m above the central concourse area.
The design by architect Niall D Brennan ensures maximum daylight throughout the building which also features a recessed penthouse with a wrap around balcony.
The block stands on the site of a former Shell petrol filling station which set a new record for the city when it was sold at auction in October 2000. David Agar and Paddy Shovlin bought the 0.28 of an acre site for £8.8 million (€11.2m) – the equivalent of €41.4m per acre.
