With US outfit Blackstone apparently buying the Burlington Hotel in Ballsbridge, Dublin for €67.5m or €135,000 a room, we can see that there is life in the commercial property market albeit at a price levels suggestive of the late 1990s. And today, we can exclusively reveal on here that UK property giant Delancey is set to acquire the State Street building and 3-acre adjacent site at 78 Sir John Rogerson’s Quay in the south Dublin Docklands at, or very close to above, the asking price of €105m. The property listing and brochure are available here (see screengrab from Savills below). It is understood that there were about eight bidders including US investor Hines, Californian investor Kennedy Wilson and . Selling agents Savills were yesterday asked for a comment, Delancey was this morning asked for a comment, and none has been forthcoming at time of writing.
Delancey might be a new name to many of you. It is a 15-year old British company which has an impressive portfolio of UK office properties and is a company which has several British joint ventures.
This transaction comes in the wake of the recent sale of part of AIB headquarters in Ballsbridge for €70m to a group of European investors assembled by Davy, the Irish financial services firm and will bring to about €400m the value of the Irish investment commercial market in 2012, up from the €180m in all of 2011, but a far cry from the €3bn recorded in 2006.
The purchase is seen as a rent play by industry insiders. The State Street building currently generates €7.8m in rent annually on a 25-year lease from 2009 with a 10-year break option subject to penalties. The building extends to 175,000 sq ft. So excluding the 3-acre site which was marketed as the last major riverside site in the south Docklands, the yield is 7.5% and the price per square foot is €600. So, if and when confirmed, the transaction will be greeted positively for evidencing liquidity in the market but the price is low.
The property was owned by a Liam Carroll company and was subject to lending from Ulster Bank.
UPDATE: 27th November 2012. Insiders claim that VAT issues ultimately stymied the Delancey bid for the building, and separately Gavin Daly reports in last weekend’s Sunday Times that Kennedy Wilson has in fact now bought the building, or at least that Delancey “lost out to” Kennedy Wilson. We await official announcements but regardless of the outcome, it seems there has been solid interest in the property at around the €105m asking price.