The second-largest office letting deal in this country may be completed shortly at East Point, the high-tech office park in the Dublin docklands.
Enba, the Dublin-based holding company for Internet banking services, is in negotiations to lease three adjoining buildings with a total of 203,000 sq ft to facilitate the growth of one of the most interesting Internet companies to emerge in this country.
A spokesperson for the company said that East Point was one of a number of locations being considered for a headquarters. Early in April, Eircell, the mobile phone operator, completed contracts to rent 263,000 sq ft of office space in a single building being developed at Central Park off the proposed Southern Cross extension to the M50 at Leopardstown Road in Sandyford.
If the Enba letting is confirmed, then East Point will be fully let. When the three new blocks are completed on a staggered basis next year, the overall size of the park will exceed 1.1 million sq ft. The park could have the distinction of having pre-let every one of the 31 blocks already completed or under construction during the past four years.
Enba could be paying a gross rent of just under £16 per sq ft for the three blocks under a 25-year lease which will have a break clause in the 13th year. Significantly, the East Point management has not had to concede rent free periods as has happened in some of the out-of-town lettings over the past six months. One of the reasons for this is that even if the Enba letting was not to proceed, the promoters have a sufficient level of interest in the last three blocks to ensure that they would be snapped up in a relatively short time.
The Enba deal, if it goes ahead, would crown what has been one of the great success stories of the property boom of the nineties. Regretfully, the man who first devised the concept for East Point and brought it to fruition, the late Dermot Pierce of Earlsfort Developments, will be 12 months dead just as the final letting is wrapped up.
Enba has attracted considerable international attention because of its tremendous vision in moving early into Internet banking business. Enba began offering its first retail banking product last November when it launched First-E, a deposit banking service.
In March it announced a $2.4 billion merger of its First-E product with Uno-E, the online banking arm of BBVA (Banco Bilbao Vizreya Argentaria). Enba has a staff of 400 and 150 contract workers at several Dublin locations.
From the start, East Point has been particularly successful in attracting leading technology operators, including Kindle Banking, Eircom, Oracle, AOL/Bertelsmann, Quintiles, Compaq and Sun Microsystems. The first tenant in East Point, Kindle, is due to have its rent reviewed next year.
Initial rents of £10 a sq ft have now risen to £16 and £17 per sq ft, but they are still well below the £35 level now being achieved for new space in the city centre.
One of the strong selling points for East Point from the start - a concession wrested from the Government by Dermot Pierce - was the granting of enterprise area tax breaks under which the investors acquiring buildings could claim 50 per cent capital allowances while tenants could avail of double rent allowances and a remission of rates over 10 years. The tax incentives are no longer available - and no longer necessary - to attract some of the key high-tech players in the Irish market.
Earlsfort Developments has sold on most of the office investment in the first phase of the park which has over 700,000 sq ft of space.
The 11 acres for the current phase was made available by Dublin Port, which has a 50 per cent stake in the venture. When completed, the second phase will have over 400,000 sq ft with an end value of close to £110 million.
