(UPDATE: 3rd March, 2011. Now that this transaction has been formally announced, there is a more comprehensive post dealing with the transaction here)
It was reported last week that Google was seeking to buy its present accommodation at Gordon House on Barrow Street in central Dublin and temporarily relocate across the road in Treasury’s Montevetro building whilst Gordon House was being retrofitted to bring it fully up to Google’s standard. But now it seems that the internet giant has decided to buy the 200,000 sq ft Montevetro building from Treasury. And sources claim the deal struck is €450 psf valuing the Treasury-led venture at €90m, a major deal much needed in Ireland’s beleaguered commercial property sector. CB Richard Ellis last year acted extensively for Google in rental transactions at East Point and Grand Canal Plaza in Dublin and on behalf of Grattan Property in its letting to Google at Grand Mill Quay.
If the deal goes through in its present form, it will be good news for Treasury and perhaps more importantly NAMA who are understood to presently manage the loan underpinning the building. The ESB (UPDATE: 21st February, 2011. Correction, the CIE) is understood to own the site with Derek Quinlan also in the frame as an investor in the venture. The sale should yield NAMA a small profit on the price the agency paid for the underpinning loans.
Two weeks ago, NAMA CEO Brendan McDonagh indicated that there would be 2-3 major sales in quarter one of 2011 with two sales to foreign companies and one to a domestic party. It would seem these sales are now beginning to be realised.
UPDATE: 17th February, 2011. NAMA has this morning confirmed the sale of Montevetro to Google. Elsewhere Propery Week says the purchase price for the 210,000 sq ft 15-storey building opposite an existing Google site on Barrow Street, was €99.9m. The purchase price (€99.9m which is over €450/psf) represents a substantial premium on a recent sale of an albeit dated, though more prestigious office building just around the corner on Clare Street where a price of €283/psf was achieved. With the political party likely to be at the centre of any next government after the general election on 25th February, promising a retrospective review of rents in 2011, you might wonder if Google got value for money at Montevetro.