Property company Hibernia Reit has abandoned plans to gain vacant possession of the Garda regional headquarters in central Dublin, settling a legal dispute that could have taken years to resolve.
Hibernia Reit, which acquired the complex last year for €70 million, said it had agreed a new six-year lease with the Office of Public Works (OPW) for the Harcourt Square property in Dublin 2. The lease will run from January and involve a 22 per cent increase in annual rent to €6 million. The OPW will also make a one-off arrears payment of €500,000.
Hibernia Reit said in May that the OPW had applied to the Circuit Court seeking a statutory extension of leases on the complex, comprised of four buildings, where leases had either already expired or were due to run out by the end of this year.
Legal action
Hibernia Reit initiated a legal action in July to gain access to common areas of the property to make preparations for a redevelopment of the site.
The property company received full planning permission in June for the second phase of the redevelopment of the 1.9-acre site, having received approval late last year for the first phase of the project. This would allow Hibernia Reit to more than double the amount of office space on the site to almost 26,000sq m (280,000sq ft).
The new lease with the OPW will delay the redevelopment, which property sources had previously estimated would cost €100 million, by years. However, it would give the OPW greater flexibility to find alternative accommodation for the 500 people currently working in Harcourt Square.
The new agreement between Hibernia Reit and the OPW “brings to an end a legal saga that looked likely to end in court, presenting risk for both sides”, said Colm Lauder, an analyst with Goodbody stockbrokers. “The new non-renewable lease agreed would appear to be the best short-term outcome for both sides.”
