News emerging from credible sources this evening that NAMA has agreed the sale of the Bank of Ireland building at 39 St Stephen’s Green on the corner with Merrion Row. This is a former Bernard McNamara building which was latterly controlled by receivers Farrell Grant Sparks and was being marketed by Knight Frank. The asking price was understood to have been €6.25m but it seems to have been snapped up by an as-yet unidentified Irish buyer for €7m who beat 16 other bidders for the property – seems like there is life in the Dublin commercial market yet!
The key attraction of the fine looking building – pictured above – is the tenant and tenancy; Bank of Ireland has another 19 years on its Upwards Only Rent Review lease which presently pays €54 psf or €404,000 a year for the 7,500 sq ft building. The asking price represented a 6.5% yield or 6.2% after costs and the settled price represents a 5.8% yield or 5.6% after costs. The building was originally bought by Bernard McNamara personally for about €12m in 2006.
The speculation is that NAMA acquired the underlying loan for just under €7m and given the 22% decline in commercial property generally since November 2009, the Agency is understood to be cock-a-hoop with the transaction, even if the actual profit on the sale might only stretch to buying a few decent bottles of Krug.
There is another McNamara office building on Arran Quay close to the Four Courts which was also being sold by Knight Frank with an asking price of €1.3m and it is understood that this building has also gone sale agreed at its asking price which represented a 8.5% yield. The tenant here is also Bank of Ireland which has a lease with a break option in 2021 and is paying a rent of €112,000 a year on the 4,000 sq ft building.
With a dearth of office transactions in Dublin in recent months, it is difficult to gauge current yields. Riverside II sold at a reported €35.5m suggesting a 8.6% yield, One Warrington Place sold for €27m suggesting a 7.25% yield. But by any standard a 5.6% yield on St Stephen’s Green is encouraging for NAMA.
NAMA Wine Lake 
Full credit here to NAMA. An excellent price – really putting the cat amongst the pigeons. Putting it up to the Funds. Well done!
In b4 “BoI bought it!”
@WSTT
To fully appreciate the level of “economic” depravity that the Irish Republic has fallen to one only has to applaud a mere 40%, five million loss over a period of six years. If NAMA had just waited six more years they could have sold it for 3.5 million.
They say that when you are deep in a hole, throwing down the shovel is a victory.
@JW, Too true! I got a little overexcited at the thought that NAMA actually had a genuine sale of a piece of property in Ireland. However, I heard today that it was sold to Davy’s Private Clients which is hardly the same thing. A green jersey sale after all. Just more smoke and mirrors – although that can’t be said for the underbidders.
@WSTT that would be a little inconsistent by NAMA,read somewhere that Davy’s were Bernie’s OPM when he doubled down?
Some,of the deals they did together ended up in NAMA,notably Glass Bottle Site.Surprised,they would not be excluded from buying,specifically old Bernie deals.On second thoughts,perhaps they are averaging in,bidding the cap. rate downwards would assist values,of any other non NAMA holdings!
But agreed good result for NAMA,buyer very confident on NO further changes to UORR,court case pending involving Medical Council,but unlikely whatever the result will have much impact here.
http://www.businessandfinance.ie/cat_news_detail.jsp?itemID=577
May not be the most appropriate area to Post this but seemed like the Only Topic that it could relate to.
http://www.independent.ie/business/irish/pope-predicts-housing-demand-tsunami-3105707.html
Just wondering what the Posters think of Statement. Perhaps he just might be right.
@Patrick, the naysayers might say there is a tsunami of housing supply ready to meet an uptick in demand. What we’re missing are the 3 Cs – credit, confidence and credibility. Credit is subdued though it will be interesting to see the Q1, 2012 mortgage stats which are due from the IBF any day now. Confidence is dented with a further €5,000 per household equivalent of austerity planned for 2013-2015 and that depends on 2.2%,3%,3% real GDP growth in 2013-2015, alongside this unemployment seems set to remain elevated. And credibility, do we think residential prices are at an equilibrium with demand:supply, affordability, rent levels and building costs – no, yes but income will come under further pressure, rents may finally start declining after the cuts to rent assistance, only on building costs are we at the bottom and even there, wages may come under further pressure.
Bernard McNamara Moved to UK ,Any Comment on Same
@Patrick, it’s a popular destination to set up home at present! Do you have a link to that claim about Bernard McNamara?
Business Section Of Todays Sunday Times with Headline “McNamara Moves to London”.Details released through Fillings with CRO For Donatex and another Mc Namara Company Giving Directors Address as Chiswick West London .
@patrick thanks for that,je ne regrette rein,and all that,another failure for NAMA!
http://m.youtube.com/watch?v=rzy2wZSg5ZM