It was in March, 2011 that NAMA appointed property receivers to a number of properties where Paddy Kelly was seen to be the lead developer, though in fact most of the properties were owned by consortia which Paddy was instrumental in putting together. One of the properties foreclosed was the Smurfit Kappa HQ on Beech Hill Road in Clonskeagh, Dublin 4 (agent’s property details here, agent’s brochure here). Last month , the Irish Times reported that the property was on the market with property services giant, CB Richard Ellis appointed to handle the sale and that it was expected to fetch €10m. Sources have claimed that the building has now been sold for €8m.
It is understood that the property was bought by Smurfit which is also the present leaseholder. It is also understood that there were two further bids for the property which fell considerably short of the settled purchase price.
The property in Clonskeagh, just outside the Central Business District in south Dublin city had been generating €500,000 per annum in rent on 3,291sq m (35,400 sq ft equivalent to €14 psf) of offices and 70 surface car parking spaces. In addition there is vacant space on the site which might have been expected to generate €150,000 per annum. The total site covers 7 acres. The lease with Smurfit Kappa was due to expire in 2013. The property is close-by to the Belfield Office Park where bookmaker Paddy Power became a tenant to a 120,000 sq ft property in May 2011.
The Irish Times previously reported that the site had been bought as an investment in 2003, four years before Irish commercial property values peaked in 2007. The buyer was a Paddy Kelly led-consortium which included John Flynn and the McCormack family and the purchase price was €25m. The Irish Times reported “planning permission was granted almost two years ago for a mixed development of 18,399sq m of offices and 121 apartments.”
I don’t think anyone will be overly happy with the price achieved including the buyer who will presumably continue to use the property as its head quarters, but at least it is a transaction in an otherwise moribund Irish commercial property sector which is still dangling on the whims of Minister for Justice and Equality, Alan Shatter with respect to planned legislation on Upward Only Rent Review commercial leases. The professionals which include Savills as property receivers for the property and CBRE as selling agents presumably won’t be complaining too much.
No comment on the transaction claims has been forthcoming from NAMA, Smurfit or CBRE.