Hibernia REIT plc announces it has exchanged contracts to acquire the Observatory Building for €52.25 million. The property is located on the riverfront at Sir John Rogerson’s Quay in the South Docks area of Dublin and is immediately in front of the Hanover Building and Windmill Lane site, which Hibernia recently acquired.
The Observatory Building was built in 2006 and comprises 86,213 ft² (approx. 8009, 5 m²) of Grade A office accommodation arranged over six floors accessed from Sir John Rogerson’s Quay, with 47 basement parking spaces.
The office space is over 95% let to a range of tenants, including Riot Games and Publicis, off low average rents of €26 per ft²., with a weighted average period to break of four years and an average unexpired lease term of 11 years. Over 44% of the current rent roll has rent reviews during or before 2018 with 56% subject to review in 2019. The annual headline rent is €2.2 million: of this, €1 million is currently subject to a rent free period ending in May 2015 and a further €0.2 million is subject to a rent free period ending in February 2016. Once the rent free periods expire, the building will generate a net yield of c. 4.1%. The purchase price reflects a capital value of €586 per ft². for the office space.