Marlet Property Group, the Irish developer backed by M&G Investments, has mandated CBRE to market a Dublin office project with a guide price of €152.8 mln.
The Sort Office project is being developed on the site of a former postal sorting facility on the corner of Cardiff Lane and Hanover Street East in the south docks area of the Irish capital.
Designed by Henry Lyons, The Sorting Office will comprise 200,000 square feet (18,930 m2) of office accommodation over eight levels. The building will have 26 car spaces and 318 bicycle spaces. The development is due for completion in Q3 2019.
Marlet and M&G are seeking to dispose of the asset by way of a forward-funding deal.
CBRE and Marlet say The Sorting Office is priced in the region of €750 per sq ft, on the basis of a vacant possession sale with a top-up based on leasing deals secured at practical completion.
Given the demand fundamentals in the Dublin office occupational market, it is envisaged pre-lets are achievable, according to CBRE.
The construction of The Sorting Office comes amid a lack of prime office accommodation in the city centre. Office rents in Dublin City Centre remain stable with prime headline rents at approximately €673 per m2. Prime office yields are currently 4.65% and CBRE indicated that the they are trending stronger. Investor demand for prime office accommodation remains a key feature of the investment market at present.
The broker also said the location is ideal given it is in the heart of the south docklands, dubbed 'Silicon Dock', due to the high concentration of technology companies.
Earlier this month Marlet and M&G Investments mandated Savills to market Dublin Living, Ireland's largest ever private rented sector (PRS) portfolio to come to market, for over €425 mln.
Marlet is a Dublin-based property development company founded by Pat Crean, which focuses on commercial and residential opportunities in the Dublin area. To date Marlet has acquired some 45 sites in Dublin comprising a mix of existing and future developments for over 4,000 residential units and 60,380 m2 of commercial space.
In 2014, Marlet signed an exclusive funding agreement with M&G Investments which has seen total investment to date in excess of €500 mln.
Mid-year score card
News of the marketing of The Sorting Office coincided with the release of CBRE's mid-year update on the main trends and transactions in all sectors of the Irish commercial property market.
According to the report, the first half of 2017 has been very busy albeit a 'different kind of busy' compared to the phenomenal performance of the commercial real estate market between 2014 and 2016.
Investor demand remains strong, encouraged by activity in each of the various occupier markets, to the extent that CBRE expects to see some price sharpening for prime investment assets over the coming months. The volume of transactional activity in some sectors such as hotels and investment is down year-on-year due to the smaller lot sizes being offered for sale compared to the large assets and portfolios that traded in recent years.
Marie Hunt, head of research at CBRE Ireland, said: 'Despite somewhat of a slow start to the year, the first half of 2017 overall has been very busy and there is currently a large volume of deals underway in all sectors of the commercial property market as well as several assets being prepared for sale.
'This bodes well for an even better second half performance although year-end totals will invariably depend on the volume of transactions that sign by year-end. Despite continued uncertainty around Brexit, it is encouraging that activity has continued at pace in all sectors regardless. Aside from Brexit uncertainty, the scarcity of housing in the Dublin market remains one of the biggest issues facing the market, and indeed the government at this juncture. I would imagine therefore that efforts to increase housing supply are likely to be a core focus for the new minister for housing over the coming months.'
