Publicly-quoted property investment fund, Hibernia Reit has acquired a prominent city centre office block in Dublin, for nearly €50m, marking its second major investment inside a month.
The company yesterday announced the €49m purchase of Cumberland House; a seven-storey office building close to Merrion Square, Government Buildings and Trinity College, with significant redevelopment potential.
The building, which also has parking space for 213 cars, was built in the 1970s, but has existing planning permission to replace the current structure which stands on 1.6 acres of land.
It has 76,000 sq m net of new office accommodation. Another option could see the existing building refurbished and extended.
“Cumberland House is an important addition to our central Dublin office portfolio with exciting asset management and redevelopment opportunities and we look forward to working with potential occupiers on plans for it,” said Hibernia chief executive Kevin Nowlan.
The building is largely empty, but Hibernia has had discussions with a number of potential tenants. The fund is acquiring Cumberland House from Morretino Ltd, a subsidiary of Mullingar-based Bennett Construction.
As part of this transaction, the €38m short term secured loan provided by Hibernia to Morretino in August 2014 is being repaid, along with about €1m of accrued interest.
The Cumberland House deal marks Hibernia Reit’s 15th acquisition since its flotation at the end of 2013. Upon completion of the transaction, the company will have invested €517m, and committed a further €43m.
It will also have around €550m of remaining investment capacity. Last month, the company announced the €70m ‘off market’ purchase of the 1.9 acre site which houses the regional Garda headquarters on Dublin’s Harcourt Square.
That deal which is likely to see Hibernia replace the existing structure with up to 91,500sq m of prime modern office space comes with good immediate rental income of about €4.9m a year. According to Eamonn Hughes of Goodbody Stockbrokers, the acquisition of Cumberland House is an attractive move.
“The Cumberland House building requires significant refurbishment or redevelopment, so Hibernia is likely to bide its time on its decision making, given it has other developments in the mix in 2016 and 2017 in its South Docks sites and Harcourt Street premises,” he said.
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