Kelleher to sell half of prestigious Dublin property for EUR 165m

Irish property developer Garrett Kelleher is selling half of the former Department of Justice building in central Dublin to clients of Dolmen Securities for EUR 165 mln, making it the largest Irish property deal so far this year, according to the Irish Independent newspaper.

Kelleher's Shelbourne Property Group initially acquired the building at 75 St Stephen's Green in 2004 for EUR 52.3 mln, before spending millions refurbishing it and moving the company’s HQ into the penthouse.

Kelleher holds a 25% stake in Dolmen, which is also a tenant in the building. Other tenants include Riverdeep, Avoca Capital, Maples & Calder and US hedge fund administration company Hedgeserv, which recently leased the remaining space in the building for EUR 700 per m².

Dolmen is setting up a qualified investor fund to make the acquisition, requiring a minimum investment of EUR 250,000. They will raise EUR 24mln in equity from investors who will get a 50% stake in the property, with Kelleher reinvesting another EUR 24 mln. The building generates approximately EUR 7.2 mln in annual rent, giving it an initial yield of 4.3%. Dolmen projects the six-to-seven year investment to generate an annual pre-tax return rate of 12.8%.