The swoop sees the buyers getting a likely return of just over 9%, a return unlikely to be achieved any more in a Dublin market, and which appears to have driven the high level of interst in the offer via Lisney. Also notable was the speed of the transaction: the two properties, bought as one lot, only went to market in May of this year, and have already been secured.
Transacted were two ‘prime’ office investments with long-term, secure income and covenants, buildings Unit 8 and Unit 14, at the long established Cork Business & Technology Park, in suburban Cork’s Model Farm Road. Current overall passing rent is €808,000 pa, and this is set to rise to €861,000 pa over the next four years, with a WAULT of 3.92 years.
Offers had been sought over €7.25m for the entire, representing €119 psf, significantly below rebuild costs and a net initial yield of 10.65% after costs was the lure. Given the likelihood it sold for closer to €8m, the yield is now between 9-9.5%.
The strong tenant profile and covenants, good yield and quality of buildings all combined to drive a high level of investment demand, both in lots and for the two buildings together.
Agents Margaret Kelleher and David McCarthy of Lisney’s Cork offices decline to identify the purchasers or eventual selling price, and commented “in the final stages of the sale, there were six bidders, with a private Irish investment company emerging as the eventual purchaser.”
Unit 8, mostly a single storey business and technology unit spanning 24,755 sq ft was recently upgraded by tenants Apple Operations Europe on a lease with six years to expiry. It operates as a subsidiary of Apple Inc, which employs 5,000 people in Cork where it operates from over 400,000 sq ft at Hollyhill, with another presence in the city centre at O’Callaghan Properties’ Half Moon Street.
The second building, Unit 14 is a detached 36,340 sq ft part two/three storey business and technology unit fully occupied by internet content security and cloud computing company Trend Micro (EMEA) Ltd. It’s held under two leases, with nine years to expiry on both, and Trend have had a Cork presence for 14 years.
The Cork Business and Technology Park is on 79 acres between the Model Farm Road and Carrigrohane Road, close to the Cork Institute of Technology (CIT), and Rubicon Centre, with UCC 1.5kms to the east.
Neighbouring occupiers in the park include Boston Scientific, Alcon, Abtran and Pilz.
“Demand for well-located commercial investment properties continues to be buoyant, evidenced by the high level of inquires on this offer,” said Ms Kelleher and Mr McCarthy.
: Lisney 021-4275079.