A new investment opportunity on Dublin's fast-changing Dawson Street is almost certain to be of interest to both private and institutional developers. Agent Cushman & Wakefield is to invite offers over €7.75 million for the bulky Trailfinders building, which may well be redeveloped to accommodate retail showrooms and offices.
Some property funds might well prefer to upgrade the block and hold it as a long-term investment to show significant capital appreciation over the next few years. Ireland's largest property fund, Irish Life, owns an adjoining building, and is bound to take a close look at the redbrick building.
The planned sale of the five-storey, over-basement property comes at a time when other real estate funds are either replacing similar blocks from the 1970s or preparing to do so. The push for new entertainment and retail trading facilities has been prompted by the recent opening of two Luas stops on Dawson Street.
Irrespective of who buys 4/5 Dawson Street, Trailfinders will inevitably hold the key to its future use. The travel company originally agreed a 20-year lease of the ground floor and basement, but since the lease ended in 2016 it has been over-holding the premises.
Two other office tenants on the top floors – credit company Arca Vita International and commercial property agent TWM Select – have signed deeds of renunciation limiting their rental of the two premises to short-term leases.
Rental income
The 994sq m (10,709sq ft) building currently produces a rental income of €399,360, which at the asking price will show a net initial yield of 4.75 per cent.
Trailfinders contributes €278,500 for 269sq m (2,900sq ft) on the ground and first floors, as well as storage and staff facilities in the basement. The company also has the use of five car parking spaces accessed from Dawson Lane.
A further €87,000 in rents come from Arca Vita and TWM, while a two-bedroom penthouse on the fourth floor with clear views of the city centre produces an annual rent of €33,600.
The offices on the upper floors have separate access from Dawson Street and the use of two passenger lifts in the glazed entrance lobby.
Jane Dolan of Cushman & Wakefield, who is handling the sale, said that fortunately the building was not a protected structure and had what was possibly the best ground-floor retail floor plate on the street.
In another major structural change about to get under way, international investment fund Meyer Bergman and Irish fund BCP are to redevelop a high-profile retail and office block at the corner of Dawson Street and Nassau Street, running along that street almost as far as Grafton Street. The highlight of the 17,650sq m (190,000sq ft) development will be a row of shops with large floor plates and overhead offices.
Landmark block
Green Reit has already transformed the Dawson Street area by developing a two-dimensional landmark block at the junction of Dawson and Molesworth streets. Anchor tenants will include a branch of the London-based Ivy Collection of restaurants, as well as Barclays Bank and the New York-headquartered Le Pain Quotidien bakery-restaurant.
A short distance away on Molesworth Street, Iput Property Fund is well advanced on the development of a €45 million corporate headquarters for AIB, which will extend to 10,683sq m (150,000sq ft).
Friends First has also made considerable progress on upgrading the Royal Hibernian Way shopping mall, which has a main stop directly outside on the new Cross-City Luas service. The expectation is that commuters disembarking or joining the Luas on Dawson Street will use Hibernian Way to walk to and from Grafton Street.
