Property fund buys Dublin office block Central Quay for €51m

Further signs of property sector momentum were evident yesterday, with the country’s main two publicly quoted property investment funds reporting strong financial and operational progress.

Property fund buys Dublin office block Central Quay for €51m

Hibernia Reit announced the €51.3m purchase of Central Quay, a modern office building in Dublin’s docklands.

Only completed in 2007, the block covers 57,700 sq ft over six floors, with 26 car parking spaces and is 88% occupied.

The contracted rent is €2.5m, representing a net initial yield of 4.5%.

Once fully occupied and following the reletting of the third floor, where the current lease expires in September, the yield on cost is expected to exceed 5.5%.

The purchase price equates to a capital value of €890 per sq ft for the office space.

“With some vacant space and upcoming lease expiries, there is an opportunity for us to increase the yield on cost of Central Quay to above 5.5% in the next 12 months and to above 6% in due course,” said chief executive Kevin Nowlan.

Elsewhere, Green Reit yesterday reported a profit of €67.1m for the six months to the end of December, the first half of its current financial year.

While down from €74.3m for the same period last year, its net asset value nudged the €1bn mark, rising by 7% year-on-year to €961.5m.

The company’s recently announced €169m asset disposal programme – being undertaken to maintain its borrowing ratio following the acquisition of the Central Park office development in south Dublin – should result in a €60m+ profit for the business.

“Our focus in Green REIT continues to be on the active management of our €1bn investment portfolio, where we have 99% occupancy, and the development of our five projects in Dublin, where we expect to add to our very strong list of existing tenants,” chief executive, Pat Gunne said.

Chairman Gary Kennedy added that the company’s investment strategy continues to deliver shareholder returns.

Regarding the Cork office market, where Green Reit was recently active via its purchase of the One Albert Quay building, the company said that a lack of new development in the city is hampering activity.

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