Real estate investment trust Hibernia Reit has emerged as the highest bidder for one of the original office buildings on Dublin's Earlsfort Terrace, opposite the National Concert Hall.
The fund has offered around €19 million – €3 million above the guide – for One Earlsfort Terrace which is let to the Eversheds law firm at a rent of €630,000 per annum.
The lease has about 11 years to run and includes a minimum guaranteed rental uplift at each five-year review. The current rent of around €278 per sq m (€25.85 per sq ft) is well below open market values. A rent review in 2016 will see the rent increasing to at least €750,000 per annum (€338 per sq m/€31.45 per sq ft) or the then open market value.
With Grade A rents in this area of the city now hitting €592 - €645 per sq m (€55-€60 per sq ft) the minimal level set in the agreement will undoubtedly be exceeded. The original agreement also provided for a rent review in 2021 with a minimum increase set at €850,000, a figure that equates to €387 per sq m or €36 per sq ft. At the opposite end of Earlsfort Terrace the newly-developed LXV office block funded by billionaire Denis O'Brien has been pre-let to the aircraft leasing company Aercap at €645 per sq m (€60 per sq ft).
The entrance to the Eversheds building is by way of a full-height glazed atrium which is shared with the adjoining building. Internally the block has standard finishes though the tenant has installed air conditioning.
Hibernia will be aware that city planners granted planning permission in 2011 for two additional floors which would have provided an additional floor area of 1,517sq m (16,328sq ft) on top of the current accommodation which extends to 2,020sq m (21,750sq ft).
The building forms part of the Earlsfort Centre where the other tenants include the Medicine Board, the OPW, the Conrad Hotel and solicitors Arthur Cox who are shortly to move to a new 11,148sq m (120,000sq ft) building currently being built on the opposite corner of Hatch Street.
Knight Frank is handling the sale of the Earlsfort Terrace investment.
Last week Hibernia completed the €60 million purchase of two other office buildings, Hardwick House and Montague House on the adjoining Hatch Street.
