Credible sources claim that 120,000 sq ft at the Paddy Kelly/John Flynn/Alanis-developed Belfield Office Park (pictured here) in Clonskeagh in south Dublin has been let to Irish betting giant, Paddy Power. The rent is reported to work out at €10 per square foot net. It is understood that Equity Properties which has been marketing the site, has successfully booked the transaction. The third-generation offices, regarded as “suburban” just a few hundred metres south of the generally accepted Dublin Central Business District number Hewlett Packard, the Office of Public Works, Vodafone, UCD, Skillsoft and Ericsson amongst its existing tenants. The suggested rent would establish a new floor for suburban south Dublin for where recent reporting has suggested is more used to €15-18 psf.
The transaction, if confirmed, will not augur well for commercial property prices in the short-term but does apparently show that there can be a buoyant market at the right price level. At the time of writing, neither Equity Properties nor Paddy Power has commented on the claimed transaction.
UPDATE: 11th May, 2011. The Irish Times today confirms the transaction though it seems that CB Richard Ellis and HT Meagher O’Reilly “handled the letting for developers”. The lease period is 15 years and there are breaks at 5 years and the initial rent is €13 per square foot though there is a rent free period of “around 18 months” which on a 5-year lease would reduce that €13 to just below €10. Paddy Power it seems to vacate its present HQ at Airton House in Tallaght. There is some more detail of the new accommodation in the Belfield Office Park – three adjoining six-storey buildings with double and triple-height receptions (see here for an example), 300 car-parking spaces. The remaining headquarters-sized office space in Dublin is as follows:
NAMA Wine Lake 
I’ll give you short odds that they are on a 3 year rolling break clause too. I don’t know of any substantial office letting that does not come with regular break clauses any more.
@2Pack. I agree that there were probably tight break clauses. I am aware of only two exceptions to that fact in recent leases.
In relation to the rental level, it is unlikely that it is a “headline”. Since the new legislation on market rents has been introduced, there is no benefit any longer to that anachronism. For similar reasons there is no need for rent free periods unless they relate to fit out costs. So therefore, it gives us a true transparent rent.
I do not believe that this is the bottom of the market quite yet, I believe that rental levels will reach €8 per sq. ft. in the immediate future in some of the overdeveloped suburbs. But we are getting close to a base, because at these levels it is impossible to produce new infrastructure and finished product to grant similarly priced leases. So as space is taken up rents will inevitably rise. However, I think that we may be 3 – 4 years from that in some suburban areas.
What the rental level does indicate is that we are seeing a fall of 50% plus from the recent bubble peak.
As much as I hate quoting him, in Brian Hayes recent speech to the Chartered Accountants he said, “We do want to see a well functioning commercial and residential property market based on realistic values and sustainable practices.”
This letting is indicative of a rebased property market that will sustain growth in values.
He also said, “A little mojo from some developers might be welcome.”
Fair dues to the guys at Equity Properties, by my calculations, on properties where they have a proprietary interest, they have negotiated and concluded commercial leases amounting to over 400,000 sq. ft. in the last six months and over 1 million sq. ft. in total in the last two years.
In the teeth of this recession, that’s more mojo than all of NAMA’s receivers put together!
@ WSTT- is the letting not at the behest of a particular reciever (dont know ins and outs of this example). How does this leave vacant new office space in Dublin now?
@Don, according to the DTZ Sherry Fitzgerald report for Q1, 2011 (see link below), there was 3,500,000 sq ft vacant in the Dublin suburbs so although 120,000 sq ft would be considered a large transaction in itself, it hardly makes a dent on the oversupply. That said, the amount of third-generation, headquarters-sized accommodation in good suburban locations is limited.
https://namawinelake.wordpress.com/2011/04/21/challenging-outlook-for-irish-commercial-property-confirmed-in-new-reports/
(see page 7 of Dublin Office report)
@don giovanni: No, there is no receiver appointed or involved. It is an “open market” letting.
Vacant new office space in Dublin is mid to upper €20s per sq. ft. Maybe early €30s if it is really prime.