German investors are close to exchange on the acquisition of two prime Dublin office buildings from Henderson Park.
KanAm has virtually completed due dilligence to buy 30-33 Molesworth Street, one of five assets packaged as the ‘Capital Collection’, which Henderson Park and agent Eastdil began marketing for a total €400 mln at the start of the year.
A second building, 2 Burlington Road, is under offer to KGAL, as PropertyEU revealed in March. However, KGAL has since withdrawn its interest in a third Capital asset, 5 Harcourt Road.
Eastdil began the process early enough for potential buyers to carry out inspections of the assets before the coronavirus lockdown, which is ongoing in Ireland.
KanAm, advised by Savills, is believed to be paying €60 mln for 30-33 Moleworth Street, which is an initial yield of just 3.5%, but the passing rent is reversionary. The price equates to approximately €1,000 per sq ft.
KGAL is buying 2 Burlington Road for about €95 mln, a yield of 4.25%.
Dessie Kilkenny, joint capital markets head in Ireland for CBRE, which recently advised Hines on the €180 mln sale of Bishop’s Square to GLL Real Estate and Patrizia, said that core office deals appear to be holding up in terms of pricing, with investor enquiries and sentiment continuing to be strong.
‘Vendor pricing aspirations remain unchanged yet in Ireland, particularly for core, but that needs to be tracked on a week by week basis going forward’, he said.
Most new activity now is said to be off-market, and very limited, particularly because of travel restrictions.
KGAL has not commented on its former interest in 5 Harcourt Road, but the building is let to WeWork whose balance sheet problems have been well reported. According to local sources, neither of the other two Capital portfolio assets, One Moleworth Street and Fitzwilliam Hall, are under offer either.
In a separate core office investment deal, Amundi is under offer to buy 28 Fitzwilliam. Vendor ESB was seeking €180 mln equating to a net yield just under 4% and €1,300 per sq ft.
