In what will be among the largest investment sales this year, agents Savills and CBRE have been instructed by owner Park Developments to sell the Reflector office building on Hanover Quay in Dublin's south docklands with a guide price of €155 million.
It will produce an annual rent roll of about €7 million – this figure includes an underwrite for some vacant office and retail space – with a weighted average unexpired lease term of 12 years. Given the asking price, this would suggest a net initial yield of 4.2 per cent.
The six-storey over-basement building – with an A3 BER rating and built to LEED Gold V4 standards – has 11,250sq m (121,089sq ft) of office space, 329sq m (3,546 sq ft) of restaurant space and 34 car-parking spaces.
It is split into two wings – east and west – with 3,012sq m (32,416sq ft) in one, occupied by software provider LogMeIn, and 8,234sq m (88,673sq ft) in the other where tenants include Airbnb, LogMeIn and web designer Wix.
Airbnb has just agreed to lease 3,715sq m (40,000sq ft) at the Reflector which is beside its European headquarters building in a former warehouse that extends to 3,574sq m (38,471sq ft). The company is planning to link the two blocks.
Active discussions
Savills is in active discussions for letting the vacant office space of 2,045sq m (22,000sq ft) across two floors and is quoting €646 per sq m (€60 per sq ft) for this. Recent lettings in the block ranged from €597- €673 per sq m (€55.50-€62.50 per sq ft).
Car-parking spaces are apportioned with the office lettings and rented at about €4,000 per space. The ground-floor restaurant unit would generate a rent of about €100,000 per annum once let, according to the agent.
Located within walking distance of Grand Canal Square, the Dart and the fast-growing north docklands, the Reflector forms part of an almost fully developed docklands neighbourhood that’s home to a growing list of technology companies and law firms.
Even by last year's "mega deal" standards – when Google bought the nearby Bolands Quay development for about €300 million – the sale of the Reflector is still a meaty transaction that will be keenly watched by market observers.
Given the quality of the development and its tenant mix, it’s probable that the Reflector will appeal to international property and pension funds.
Asian investors have recently begun to make their presence felt in the Dublin market. A South Korean real-estate investment trust bought number 2 Dublin Landings for €106.5 million in December while South Korea-based Kookman Bank paid €101 million for the 17,652sq m (190,000sq ft) Beckett Building on East Wall Road in Dublin 3 earlier in 2018.
‘Mainstream’
These transactions suggest that Dublin is now considered "mainstream" by global real-estate capital markets. "Where large-scale, high-quality core office assets are offered, there is strong international investor interest," says Marie Hunt of CBRE. "And recent transactions clearly demonstrate that Asian investors will look at Ireland if the opportunity is good enough."
The Reflector was developed by Park Developments – it acquired the site in 2004. Construction began in 2016 with Sisk as the main contractor and finished last year.
Park also developed 300 apartments and 5,500sq m (59,201sq ft) of commercial space at the nearby Hanover Quay scheme in 2007.
Last May, the group sold 262 apartments in Churchtown to Irish Life Investment Managers for more than €100 million. It also exited Nama in June by paying off a reported €300 million-plus debt with fresh borrowings from Bank of Ireland and AIB secured on the group's assets. Profits at its main business almost doubled to €11.3 million in 2017.
Park, chaired by well-known developer Michael Cotter, is a third-generation family-owned business that has built more than 20,000 houses and apartments, and three million square feet in commercial property.
The Reflector also incorporates 40 apartments which will be to be offered for sale separately.
