GLL Real Estate Partners, an affiliate of the Australian investment bank Macquarie Group and Patrizia AG, has completed the acquisition for €182 million of the Bishop's Square office scheme in Dublin city centre.
While the successful completion of the sale represents a particular coup for Hines, it will also be seen as providing a major boost to the Irish market, coming as it does in the midst of the Covid-19 crisis. The amount paid by GLL is slightly more than the €180 million price which Kyle Rothwell of agent CBRE had been guiding when he brought the property to the market on behalf of the US-headquartered real estate giant in May of last year.
Stepped in
GLL Real Estate Partners stepped in to buy the Bishop’s Square scheme after a deal Hines had agreed previously with South Korean investor IGIS Asset Management, did not proceed.
GLL were advised on the purchase of the property by Tony Waters of HWBC. They can expect to secure a net initial yield of about 4 per cent based upon the scheme's current rent roll of €7.881 million. Nearly 90 per cent of that rental income is accounted for by Government tenants, namely the OPW and Tourism Ireland. Other tenants include Starbucks and International Financial Data Services (IFDS).
Located on Kevin Street at the heart of Dublin’s central business district and within a short walk of St Stephen’s Green, Bishop’s Square is a grade-A office building.
Built originally in 2002 by developer Bernard McNamara, the building has undergone a significant programme of improvement work since Hines acquired it from New York-based investment firm King Street Capital for €92.5 million in 2015. Hines' construction in the interim of a new penthouse floor and the extension of the building's fourth and fifth floors has increased the property's overall floor area from 14,213sq m (153,000 sq ft) to 16,980sq m (182,774sq ft) over seven storeys. Other improvement work includes the provision of six new lifts, an upgraded reception area, and the delivery of a full-height atrium to increase the flow of natural light.
‘Excellent outcome’
Commenting on the completion of the Bishop’s Square sale, Hines Ireland senior managing director Brian Moran said: “This is an excellent outcome for Hines coming on the back of a strategically driven redevelopment programme for this landmark property. We acquired Bishop’s Square in 2015 with a view to bringing a major value-add to this prime city-centre asset and we are exiting having delivered transformative upgrades and improvements to the building which will significantly enhance the existing and future tenant experience.”
