Hibernia REIT plc has exchanged contracts for the acquisition of 77 Sir John Rogerson’s Quay (“77 SJRQ”), Dublin for €28.7m.
77 SJRQ is a six-storey office building of 34,400 ft² with 20 basement car parking spaces which was constructed in 2004. The building is situated towards the eastern end of Dublin’s South Docks where a number of large development projects are nearing completion. Hibernia is acquiring the building vacant and expects to spend €0.5m on improvement works: including these, the purchase price equates to a capital value of €850 per ft² for the office space.
Separately, Hibernia has agreed to let the entire building to a subsidiary of International Workplace Group plc (“IWG”, formerly Regus) on a 25-year lease, with 15 years term certain. IWG will pay the initial rent of €1.8m (€50 per ft²) and will receive nine months rent free: the lease is expected to commence in mid-2018. The net yield will be 5.8% after the expiry of the rent-free period, rising to 6.3% following a fixed uplift in rent after year five.
Kevin Nowlan, Chief Executive Officer of Hibernia, said: “We are delighted to be acquiring 77 SJRQ and welcoming IWG as a long-term tenant. The eastern end of the South Docks is undergoing a transformation with several large development projects approaching completion and occupiers such as JP Morgan and Indeed.com joining State Street, Accenture and AirBnB in the area. The simultaneous agreements show Hibernia’s ability to drive value through combining our asset management and deal sourcing capabilities.”
