International property investment group Kennedy Wilson Europe (KWE) is to focus its Irish operations more heavily on the south Dublin suburbs, expecting office rents and capital values there to catch up with city centre rates.
KWE — which owns a number of high-profile office sites in Dublin city centre — yesterday announced the acquisition of two office developments in the southside suburbs for a combined €76.9m.
These are the Chase building in Sandyford, which cost €62.5m and three buildings in Blackrock Business Park for €14.4m.
“We continue to be attracted to the fundamentals of the South Dublin suburban office market and the Chase represents one of the leading offices in this catchment.
“Following significant improvement in city centre office rents and capital values, over the last two years, we believe that top-quality suburban offices are poised for a catch-up.
"In addition, both the Chase and Blackrock provide us with attractive asset management opportunities to add to and reconfigure space, lease up voids, benefit from rent reviews and re-gear leases to grow values,” said Peter Collins, head of KWE’s Irish operations.
He added that KWE’s Dublin suburban office portfolio is 24% under-rented.
“With 48% of the income with a lease event over the next two years, we expect to capitalise on this gap as well as benefit from future rental growth in this market and move closer to our target stabilised yield of around 7% across this portfolio.”
Elsewhere, yesterday, property investment fund Irish Residential Properties REIT said that it doubled its first-quarter net income to just over €4.1m this year.
In a trading update covering the first four months of the year, the company said it has over €200m to spend on acquisitions and sees “a significant pipeline” of future purchases, via Nama and private off-market transaction opportunities.
The company said that, as of the end of March, it had cash on hand of €7.2m and a further €131.8m of borrowings drawn down.
In January I-Res signed a new five-year revolving credit facility of up to €250m, which can be extended to €350m.
© Irish Examiner Ltd. All rights reserved