The strict conditions which have applied to office lettings in Dublin's International Financial Services Centre since it first opened have finally been eased by some owners. Licensed traders waiting to move into four new buildings will now have the option of surrendering their leases after 10, 13 or 15 years - provided they are prepared to pay a penalty. This is the first time break clauses are being offered in the IFSC. All previous leases agreed have been for a period of 25 years despite the plan to withdraw the tax status in the year 2005. However, the developers of Custom House Plaza have not had to give break options because of the flexibility of floor and building sizes in its scheme.

News of the relaxation of the rental conditions came as a consortium decided against proceeding with the purchase of "air space" over Connolly Railway Station in Dublin for the equivalent of £5 million. The consortium of Paddy Kelly, John Flynn and John McCabe had planned to build a 38,000-square-foot office block, which would have formed part of the IFSC. The decision not to proceed with the development was not related to the issue of break clauses, according to the syndicate. CIE is now negotiating with other interested parties. The availability of shorter leases in the docks could have an affect on the value of office investments in spite of the immense demand for them because of the tax shelters on offer. A private investor who bought one of the newly-completed blocks in the Custom House Plaza was apparently the first to offer breaks in leases in an attempt to find tenants for 15,868 square feet on three floors of Plaza 3. Tenants who do not want to take a 25-year lease at an initial rent of £27.50 per square foot are being offered a break option in the 10th year at a rent of £36 per square foot. The investor involved paid around £13 million for Plaza 3, a five-storey building which has Maxol as tenants on the two top floors.Almost simultaneously, Banque Nationale de Paris also plans to break with tradition by offering break options on 38,000 square feet of space it is subletting in its new Dublin headquarters. These tenants will be paying a rent of £30 per square foot in exchange for a 15-year break and about £34 per square foot for a break in the 10th year. The main developers in the IFSC, Hardwicke and British Land, have also changed the leasing conditions for their final two office schemes. Tenants looking for space in the 50,000-squarefoot George's Dock 6 have the option of taking a 25-year lease at £27.50 per square foot. With a break option in the 15th year, tenants will be expected to pay £29 per square foot, while a 13th year break will involve a rent of £30 per square foot. Hardwicke and British Land are also extending the concessions to Exchange Place to speed up the leasing programme for the remaining own-door units in the 80,000-square-foot scheme. About 25 per cent of the space is already committed on 25-year leases. The remaining four-storey units are now to be made available with lease breaks in either the 10th, 13th and 15th years at slightly higher rents as well as one year's rent as an additional penalty. Brian Rhatigan's company, which is developing the prestigious Custom House Plaza will not be offering any break options to tenants, according to letting agent Lisney. The agents are involved in negotiations to let the remaining 72,628 square feet in four of the plaza blocks.