US investor Kennedy Wilson is to consolidate its ownership of a large stretch of Dublin's St Stephen's Green by purchasing the extensive headquarters of the Department of Justice and Equality.
The distinctive period building, acquired for close to the €20 million asking price, will give the California-based company a strategic hold on much of the southern side of the green, where it already owns the adjoining headquarters of KPMG.
Dessie Kilkenny of Savills, who is handling the sale for Dublin-based investment group SW3 Capital, said it would be "premature" to make any announcement. The investment was bought by the group in October 2014, for €16.5 million.
A series of relatively modern buildings, developed behind the facade of the former Methodist Centenary Church, are occupied by the Office of Public Works under two co-terminus leases at a combined annual rent of €1.02 million. This equates to €493/sq m (€45.85/sq ft).
Kennedy Wilson, which has reportedly invested some €1 billion in Irish property since the market collapsed, will be well aware of the opportunities to redevelop and extend the Stephen’s Green buildings once the leases run out next June.
The distinctive period building is constantly used by State agencies for high-profile meetings and receptions for overseas dignitaries.
Kennedy Wilson will inevitably look for planning permission to modernise and, more importantly, enlarge the complex, which extends to 2,067sq m (22,249sq ft).
Scope
For a start, there is scope to add a new penthouse floor. The front section includes storage facilities at basement level and offices on the ground, first and second floors. There are additional offices at four levels to the side of the main building.
A separate four-storey over-basement period building, also included in the sale, could be used either as offices or residential units. The OPW may well choose to renew some of the leases, such as the one relating to the main office block.
Another possible option for Kennedy Wilson may well be to lease the former church and adjoining buildings to next-door neighbour and tenant KPMG, which continues to expand its operations in Dublin.
In essence, the Department and Justice and KPMG already share the same campus.
The basement area also includes 20 car parking spaces, which will inevitably appeal to the accountancy firm.
SW3 Capital, set up after the property crash by Adam P Rooney, Edward BJ Truman and Thomas O’Mahony, has bought a range of other city centre investment properties at heavily discounted prices.
These properties include the Eir company offices at Citywest Business Park; the Dublin Business School on Aungier Street; Twilfit House at the junction of Jervis and Upper Abbey streets; Tesco Express at College Green, and a mixed-use block at the corner of Dawson Street and St Stephen’s Green.
