M7 Real Estate has sold an office complex on Fumbally Lane, Dublin to BCP Fund Management for a total of €33.5m, a capital value per square foot of €403 and a reversionary yield of 8.5% on today’s ERV. The asset comprises a modern five storey office building with 55 underground car parking spaces and a further three period properties, including part of a deactivated distillery, which has been recently converted into high-quality office space totalling 83,699ft². In addition, the site also includes four residential units totalling 4,000ft² and a 0.4-acre development site.
M7 acquired the asset in December 2016 with a vacancy rate of 17% which is now circa 2%. Following an intensive asset management programme, M7 refurbished and comprehensively improved the common areas to all parts of the scheme and undertook 19 new leases within the 20 months of its ownership totalling 33,191ft² and generating an additional annual contracted rent of €1.14m. Including lettings in solicitors’ hands, this results in an increase in rental income of 51%.
Fumbally Lane is located within the vibrant area of the Liberties, an office hub for creative, media and technology businesses. The office space is occupied by a diverse range of businesses operating in the education, media, software, fashion, architecture and marketing sectors. Occupiers include Joe.ie, CMC Marketing, Adara Software, SquareUp, Ditta Eyewear, Disability Federation Ireland and the Institute of Technologies Ireland.
John Murnaghan, Head of Real Estate in the UK and Ireland at M7, commented: “The sale of our Fumbally Lane asset ahead of the anticipated exit time frame in our business plan demonstrates the strong occupational demand in the Dublin office market plus the success of our leasing strategy, which has focussed on providing a quality product with an engaged occupier approach. We have no doubt that the asset will go from strength to strength under BCP’s ownership.”
Nick Cullen, Investment Director at BCP, commented: “We are delighted to acquire the Fumbally Lane office complex from M7 in an off-market transaction. At nearly full occupancy Fumbally Lane has proven itself as a convenient and affordable City Centre Fringe location for media, technology, and creative tenants. The emergence of the immediate area as a mixed-use hub and the wider regeneration of Dublin 8 will serve to increase the attractiveness of this location to occupiers in the coming years.”
