Commercial property: Time to switch on to ESB international €3.7m deal?

What do Ankara, Bahrain, Dublin, Johannesburg, and Eastgate, Cork all have in common? Not a lot, most likely, except they each have an office for power and energy engineering consultancy business ESB International, who employ 750 globally, and have done multi-million euro projects in 120 countries over a 40-year span.

And, now, their Cork offices at Building 6, Eastgate are up for sale for €3.7 million for a private investor/vendor, with existing strong income for the full floor they occupy, and the building has further rental uplift potential also.

Headquartered in Dublin’s St Stephen’s Green, ESB International have had their second Irish base at Eastgate since 2008, when they took space at Building 6 vacated by Schlumberger, and have since moved to occupy the entire upper floor of the two-story office block on a second lease.

They are currently paying €210,000 pa for the top floor, on a 15 year lease from 2008 and with a further section on a nine year lease from 2015.

Strong local investors, plus investors being priced out of the Dublin market, are expected to compete for the 31,000 sq ft building with 102 car parking spaces. Once fully let, it would give a return of 8.75%, it’s calculated as current comparable rents are now heading towards €16 psf.

This is one of the first significant investment offers for some time at Eastgate, say agents Niall Guerin and Isobel O’Regan of Savills, observing that the office element at the 100-acre park developed in the late 1990s by O’Flynn Construction is now close to fully let, with up to 4,000 office jobs and major occupiers including Laya Healthcare and Eli Lilly Global Service, each in substantial, c 65,000 sq ft buildings.

In an astute move, Eli Lilly purchased its building outright, capable of hosting over 500 employees, in 2013 from O’Flynn Construction, for a reported €10m. While Eastgate is now virtually fully occupied (and, the UK chain The Range took the largest retail unit there prior to Christmas) there is planning for two further c 65,000 sq ft signature buildings, plus a four-acre opportunity site by the park’s motor mall entrance by Kearys.

Savills describe the 31,700 sq ft Building 6 as a walk-in job, superbly designed, well maintained and with excellent profile within Eastgate’s business park. “The entire ground floor is vacant and represents a unique opportunity for investors to add significant rental uplift once leased, or alternatively for an owner- occupier to locate in the ground floor with an income stream from the existing tenant on the first floor,” says Mr Guerin.

Recent deals in the park, which is 1.5kms east of the Jack Lynch tunnel, include lettings at Building No 11 via Lisney to FMC, who took c 15,000 sq ft of a 27,000 sq ft building at first and second floor levels, and a further 5,500 sq ft at ground was let to locally-based DPS Engineering. Rents at Building 11’s 2016 deals were c €15 psf, and Savills and JLL acted for FMC in their deal. Lisney has the remaining c 4,500 sq ft at Building 11 under very active negotiation, it’s understood, quoting €15 psf.

“Both the lot size and location are in strong demand and we are expecting competitive interest in Building 6 from national and international investors and owner occupiers,” says Isobel O’Regan.

Details: Savills 021-4271371


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