Deal for €180m OPW-occupied office block goes through despite Covid-19 jitters

A deal on a Dublin office block worth €180 million has just gone through, despite jitters across the world’s stock and property markets, with deep-pocketed international players on each side of the sale.
Deal for €180m OPW-occupied office block goes through despite Covid-19 jitters

A deal on a Dublin office block worth €180 million has just gone through, despite jitters across the world’s stock and property markets, with deep-pocketed international players on each side of the sale.

The Kevin Street building close to St Stephen’s Green, was originally delivered around 2002 by Irish developer Bernard McNamara, has sold and resold several times in recent years, and is primarily occupied by Government and/or State agencies, on long leases, representing about 90% of the rental income.

Bishop’s Square has just been sold now by Hines, an international fund which acquired the block in 2015 for a reported €92.5m from another US-based owner, King Street Capital. Hines subsequently invested significantly, adding two extra floors plus a penthouse, totalling an additional 27,000 sq ft.

Much of this is now occupied by the OPW on a new lease. Hines also upgraded common areas such as the reception and lobbies in the multi-tenanted 180,000 sq ft, and now seven-storey, property, Hines also upgraded the mech and elec standards, improved parking, added 90 bikes spaces and showers and fitted six new lifts – all of which helped them in their own re-sale uplift.

While the company didn’t confirm the exact selling price, it’s thought that it made the €180m price at which it had been pitched when put for sale via agents CBRE last year. HWBC acted for eventual purchaser GLL Real Estate, after sale negotiations had gone to advanced levels in 2019 with other prospective purchasers, including one from Asia/South Korea.

A statement from Hines said the extensive redevelopment project had taken two years to complete and “has resulted in a 30% increase in the overall rent-roll for the building.” Hines Ireland senior MD Brian Moran said the transaction with GLL was “an excellent outcome for Hines, coming on the back of a strategically-driven redevelopment programme for this landmark property. We acquired Bishop’s Square in 2015 with a view to bringing a major value-add to this prime city-centre asset and we are exiting today having delivered transformative upgrades and improvements to the building which will significantly enhance the existing and future tenant experience.” Tenants include the OPW, Tourism Ireland, IFDS and Starbucks.

Internationally, the US-quartered global real estate investment giant Hines has $133bn of assets under management, across over 200 cities. It entered European markets in 1991, with a presence now in 49 cities in 11 countries, with €21bn managed in European assets.

In Dublin, Hines have significant residential-led developments in the offing at South Circular Road and Drumcondra.

They were behind the redevelopment of Central Plaza, are major players in the mixed-use Cherrywood development and are joint owners and managers of the Liffey Valley Shopping Centre.

Bishop’s Square new owner are Munich-based GLL Real Estate, linked to Australian investment bank Macquarie Group and a German life fund manager. GLL was set up in 2000, and its website says it manages €8bn in assets in 16 counties in Europe, the Americas and Australia.

GLL now adds a sizeable Irish asset, the multi-traded Bishop’s Square’s 180,000 sq ft of Dublin offices with State occupiers in the main to its portfolio which also spans core property, development projects, and includes offices, retail, and industrial real estate.

The just-concluded €180m deal with Hines was reported in Irish media in recent months and was notified to the Competition Authority last month.

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