US-headquartered real estate giant Hines has instructed CBRE to prepare Bishop’s Square, the substantial office investment it owns in Dublin city centre, for sale, according to The Irish Independent.
While it is understood that a decision has yet to be made on whether the property will be offered to the open market or sold as part of a targeted process, market sources said they expect the scheme to carry a guide price of at least €180m.
Hines’ decision to sell its interest in Bishop’s Square represents the third time the office block will have come to the market in the past six years.
In 2013, the New York-based investment giant, King Street Capital, acquired the property for €65m.
The premises, which had been built 11 years previously by developer Bernard McNamara, had been put up for sale by Savills at a guide price of €70m.
King Street Capital took advantage of the recovery in the Dublin office market just two years later, selling Bishop’s Square to Hines for €92.5m.
While a crude calculation would suggest that Hines is now aiming to double its money, it should be borne in mind that the company has invested a significant sum on upgrading the building and increasing its overall floor area.
In October 2017, Hines commenced the construction of a new penthouse floor and on the extension of the building’s fourth and fifth floors.
The completion of the works will see the overall floor area increase from 14,213 sq m (153,000 sq ft) to 17,420 sq m (187,500 sq ft).
Other improvement works include the provision of six new lifts, an upgraded reception area, and the delivery of a full-height atrium to increase the flow of natural light.
Located at the heart of Dublin’s central business district and within a short walk of St Stephen’s Green, Bishop’s Square is a Grade A multi-let office building.
The property is currently producing total rental income of €8.7m per annum from a tenant mix which includes the Office of Public Works (OPW), Tourism Ireland, International Fund Services Ireland and NI Group Limited.
In terms of the building’s new office space, the OPW has committed to taking all 47,000 sq ft of it on a 20-year lease (break in year 15) at an estimated rent of €49 per sq ft.
The OPW now occupies 137,000 sq ft of office space in the building.
Based on the property’s expected guide price of €180m – in addition to its current annual rent roll of €8.7m – the prospective purchaser of Bishop’s Square could expect to secure a net initial yield of 4.45pc.
REF: Irish Independent