Hibernia REIT plc (Hibernia) has announced, in separate off-market transactions (together, the “Windmill Lane acquisitions”), the acquisition of the loan secured on the Hanover Building, Windmill Lane, for €20.16 million and the acquisition of an adjoining 1 acre development site (the “Windmill Lane Site”) for €7.5million.
These acquisitions bring Hibernia’s total number of acquisitions since listing in December 2013 to seven, and brings total funds committed to approximately €253 million.
The Hanover Building is a modern five storey building comprising 44,317 sq. ft. of office space on the upper floors, 11,614 sq. ft. of ground floor retail space, along with 13 underground parking spaces. The offices are occupied by BNY Financial Services Plc under 3 leases running to 2026/2027, with tenant options to break in 2016. The retail space is occupied by Eurospar on a lease to 2032 with a tenant option to break in 2019.
The building generates total rent of €1.5m per annum, with an average of €30 per sq. ft. for the office element. The purchase price of €20.16m equates to €360 per sq. ft. and a net initial yield of 7.3%. The Windmill Lane Site adjoins the Hanover Building and has existing mixed use planning permission for 125,000 sq. ft. net lettable of offices, 9,000 sq. ft. of retail space and 15 residential units. Hibernia has granted a 12 month option to a party to invest on a side by side, equal cost basis in the combined redevelopment of the Hanover Building and the site. If exercised, Hibernia will act as the asset manager and development manager.
The South Docks area of Dublin has become one of the most popular office locations in recent years particularly with the TMT sector. The properties are within close proximity of the IFSC and Grand Canal Square and also within walking distance of Pearse railway station which is served by both DART and mainline services. Kevin Nowlan, CEO, said: “We have again demonstrated our ability to seek out and successfully conclude transactions in prime locations and at attractive prices. The Hanover Building will give us a significant yield and is complemented by an exciting office development opportunity with planning permission in a popular area at a time when vacant high quality office space is extremely limited. These two transactions reflect Hibernia’s stated strategy of sourcing off market investment opportunities where possible.”