Nama is to seek buyers for three office buildings in Dublin’s south docklands and another one in Ballsbridge at an overall price of €120 million.
The investment properties in the Platinum Portfolio are the Bloodstone Building on Sir John Rogerson’s Quay; the adjoining Block B, Riverside 1V, on Britain Quay; Grand Mill Quay on Barrow Street; and Hume House on Pembroke Road in Ballsbridge.
Joint agents CBRE and Knight Frank are expecting considerable overseas interest because of the 50 to 60 per cent slippage in values since the property crash. Irish funds including Irish Life, Irish Pension Unit Trust and Green REIT are also expected to pitch for one or more of the blocks because of the broadly held belief that rents are set to strengthen as a result of the rundown in modern office space in the central business district.
The initial return being offered over the entire portfolio is just over 6 per cent, rising to 8.5 per cent when all the space has been let. The average capital value across the portfolio is only €4,000 per sq m (€373 per as sq ft) – less than replacement costs.
The planned sale is the largest of an office portfolio by Nama since it was set up in 2009. Joint receivers Paul McCann of Grant Thornton and Declan Taite of RSM Farrell Grant Sparks are handling the sale for Nama.
Both the Bloodstone Building and Block B were developed by Sean Dunne, currently based in Connecticut, who is shortly to institute a High Court action to overturn his bankruptcy in Ireland. Ulster Bank applied for the developer to be adjudged bankrupt over a debt of €161 million in unpaid loans even though he had already filed for bankruptcy in the US.
Mr Dunne also owned Hume House which he bought in 2006 for €130 million.
The third modern office building going for sale, Grand Mill Quay, close to Google's European headquarters on Barrow Street, was developed by Bernard McNamara, one of the central figures in the collapse of the property market.
Top grade
CBRE and Knight Frank are quoting €42.4 million for Grand Mill Quay, a top grade building with a floor area of 8,965sq m (96,500sq ft) and 109 car-parking spaces. It is currently producing a rent roll of €3.59 million from tenants including Willis, Blackrock, Lee Overlay & Partners and Google.
Barrow Street has become a hub for high tech and social media companies, benefitting from an excellent transport network. At a value of €42.4 million, the asset would show a return of 8.1 per cent.
The Bloodstone Building with a price tag of €30 million is an equally impressive eight-storey block with 7,720sq m (83,100sq ft) of space overlooking the River Liffey in the heart of the south docklands. It is currently producing rents of €1,250,000 from a number of tenants including SEB Life and LogMeln.
There is a further 3,251sq m (35,000sq ft) of high quality space available to let. As all the recent lettings were at bargain rents of €23 and €26 per sq ft there is obvious potential for rental and capital growth. When fully let the block will show a yield of over 7.5 per cent, according to the agents.
A price of €26.3 million is being sought for Block B, a six-storey building with over 5,480sq m (59,000sq ft) of Grade A space. Occupiers include AWAS, one of the world's leading aircraft leasing companies, and online recruitment firm Indeed. com. The current rental income of €1,445,000 is secure for up to 8.7 years.
An additional 2,787sq m (30,000sq ft) is available to let. The initial yield in this instance is 5.26 per cent which should rise to 8.23 per cent when the building is fully occupied.
The joint selling agents have set a price of €21.5 million for Hume House where the rental income is €1,853,000 from 7,432sq m (80,000sq ft) and 118 car-parking spaces. The tenants include Bank of Ireland and AIB and the income is secured for up to 10.7 years. The initial return of 8.25 per cent is due to rise to 9.3 per cent when fully let. Hume House stands on 0.865 of an acre and adjoins a substantial site recently acquired by the Comer brothers. Planning permission was granted in 2010 to demolish Hume House and replace it with a nine-storey block extending to 16,080sq m (173,081sq ft).
