Forfás pays out €4.7m to rent empty premises

A State agency has paid almost €5m in rent on vacant space in the past five years on a building that it is unable to sub-let to others.

Forfás is tied to a 65-year lease on Carrisbrook House in Dublin 4, and the Minister for Jobs, Enterprise, and Innovation, Richard Bruton, has confirmed that the agency has paid out €4.7m in rent for the Ballsbridge premises since 2008.

In a written response to Sinn Féin’s Peadar Tóibín, Mr Bruton confirmed that Forfás paid €990,000 last year on the vacant space, also stating that there is no provision for lease breaks on the property, which is subject to upward-only, or equal, rent reviews.

The €990,000 represented 15% of the agency’s staff costs of €6.7m that year.

Between now and when the lease ends in 2034, Forfás — which acts as Ireland’s advisory board for enterprise, trade, science, technology, and innovation — faces paying out over €20m.

The agency has been endeavouring since 2008 — when previous tenants vacated the building — to sublet the vacant space, but to no avail.

Currently, only one floor of the eight-storey building is let, and that is to the Israeli embassy.

Developer Bernard McNamara, through Mazarone Ltd, acquired the building for €46m and it was put on the market last September for the receiver to Mazarone at a guide price of €15.5m.

The attractiveness of the no-break, upward-only rent review lease, with the guaranteed rent roll, meant the property was only on the property market for three months before it was snapped up in December.

A spokeswoman for DTZ Sherry Fitzgerald declined yesterday to say who bought the building, or for how much, only to confirm that the price exceeded the guide price of €15.5m.

On the reorganisation of the State’s industrial agencies, Forfás acquired responsibility for the leasehold in 1994.

A spokeswoman for Forfás said yesterday: “Every effort has been made to seek replacement tenants or to dispose of the leasehold interest.

“Working with professional estate agents, a number of marketing initiatives have been undertaken since 2008 and are ongoing.”

The agency confirmed that, during 2011 and 2012, there were a total of 12 viewings of Carrisbrook House.

Mr Tóibín said last night: “This Government had promised to deal with this issue of upward-only rent clauses. We now find that a government enterprise agency is caught up in one of these leases and is paying well over the odds for renting vacant premises.

“There is a need for the Government to end these excesses payments to landlords and save the taxpayers’ money.”