Irish property fund Iput has pre-let 40 Molesworth Street in central Dublin to US online retailer Jet. com at an annual rent of €1.8 million.
Situated on the corner of Dawson Street and Molesworth Street, the rental equates to €60 per square foot for the 30,000 sq ft of space in what was the former home of the European Union.
This is the kind of level achieved for office rentals at the height of the property bubble a decade ago.
Jet.com is a fast-growing online retailer focused solely on the US market. It was acquired last year by American retail giant Walmart for up to $3.3 billion in cash and shares.
The company was co-founded by Irishman Mike Hanrahan and offers a wide range of products in the home, grocery, health and beauty, and fashion categories. It adds more than 400,000 new shoppers monthly and processes an average of 25,000 orders a day.
It has agreed to take a 20 year lease on the Molesworth Street property.
Iput chief executive Niall Gaffney said the letting was a "strong indication" of the underlying demand for high-quality space in the Dublin office market.
“The letting also supports our strategy of regenerating our existing portfolio and sets a benchmark for our other projects currently underway nearby at 10 Molesworth Street, and at the Exchange in Dublin’s IFSC,” he said.
Substantial redevelopment
The building was acquired by Iput in March 2013 for €8.4 million. The group later secured planning permission for a substantial redevelopment of the entire property.
Vacant possession was secured in May 2016 when Iput commenced a full redevelopment at a cost of about €13 million.
The existing structure was stripped back to its frame, with two penthouse office floors added. The facade has been fitted with a high-performance curtain walling system finished in a distinctive Petersen brick.
On completion, the building is expected to achieve a valuation in excess of €40 million. This represents a total return on cost for the fund of more than 8 per cent.
Significant employee facilities are being provided including shower and changing facilities. The office block also has bicycle storage onsite and a Dublin Bikes station directly outside the building.
The redevelopment of 40 Molesworth Street is part of the wider regeneration of the area, which will benefit from the opening of the Luas cross city line, which is due to complete in late 2017.
Savills handled the letting for Iput and Jet.com was advised by Colliers.
Iput, which is celebrating its 50th birthday this year, has been on a strong run recently. In January, Mr Gaffney said it could return up to €1.2 billion in dividends to its investors over the next decade, based around a strong pipeline of developments that are nearing completion.
