German property group Commerz Real has made its debut in the Irish property market with the acquisition of an office property in Dublin for its Hausinvest open-ended real estate fund.
The 13,700 m2 1&2 Dockland Central asset was bought from Hibernia REIT for €152.3 mln, which is 'marginally above' the book value of €148 mln. The transaction represents a 4.75% net initial yield, in line with market yields for the location and asset quality.
Built in 2000 and refurbished in 2017, the complex comprises two adjoining buildings which have separate lobbies with inner courtyards, separate lifts and building technology, offering considerable flexibility. Both buildings are five storeys high and are connected by a common basement. The asset is fully leased with most of the space occupied by three main tenants: HubSpot, an American software company, the investment bank BNY Mellon, and the Irish Commission for Communications Regulation. The building also offers 144 parking spaces and 167 bicycle stands in an underground garage.
Hibernia bought the asset - formerly called Commerzbank House and Guild House - in an off-market transaction in July 2014 for €90.75 mln, or a net initial yield of 6.6%. It subsequently completed a comprehensive refurbishment of the properties between 2016 and 2017 at a cost of €21 mln. It is believed to be netting €35 mln from the sale.
'With the very good quality of the building, the renowned tenants and the outstanding location 1&2 Dockland Central is a successful entry into the Irish real estate market for Hausinvest,' said Maja Procz, global head of transactions at Commerz Real.
Hibernia plans to reinvest the proceeds into highly accretive development projects such as Clanwilliam Court (expected commencement in early 2022) and Harcourt Square (expected commencement in 2023).
Edwina Governey, Chief Investment Officer of Hibernia, said: 'During our ownership, One and Two Dockland Central has been a good example of the type of active asset management in which we specialise. Having acquired the Property in 2014, we negotiated lease surrenders from the main tenants, upgraded and expanded the lettable area before re-letting it to a mix of high-quality occupiers, unlocking significant value for our shareholders. The sale will enable us to recycle capital into the delivery of our Clanwilliam Quarter and Harcourt Square office clusters.'
Commerz Real was advised on the transaction by Cushman & Wakefield, the seller was advised by CBRE.
