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Published in Commercial Property on 07/12/2016

Irish Life Purchase Velasco Office Development in Dublin

#CBRE #irishlife

CNI reports

Ardstone and Hardwicke have sold Velasco – their signature office development currently under construction to Irish Life.  The deal, which is believed to be at a figure in the region of €58m, for the vacant building, represents a strong vote of confidence by Irish Life in the prospects for sustained office occupier demand in the prime Dublin office market. The early delivery of Velasco demonstrates excellent foresight by Ardstone and Hardwicke in getting early mover advantage to deliver an excellent high quality office building into the front end of the development supply pipeline.

Velasco is a modern office building currently under construction. It sits on the site of the former Kestrel House, on the corner of Grand Canal Street and Clanwilliam Place. When completed in the early half of 2017, Velasco will comprise an eight storey Grade A specification building with 13 car parking spaces at basement and podium levels. The building is targeting LEED Gold and a BER A3 Rating which in today’s market is important for green aware occupiers. Upon completion, the building will extend to approximately 4,738 sq m (51,000 sq ft) with the floor plates being an ideal size and layout for occupiers ranging from 475 sq m (5,100 sq ft) to 725 sq m (7,800 sq ft).

The investment is rumoured to have been of interest to a range of overseas and domestic buyers but Irish Life has been first to act prior to actual completion of the property to secure what will no doubt be one of the highest quality investments in Dublin, when fully leased up. We understand that the current leasing agent, JLL, is reporting very strong occupier interest in the building and are confident of securing strong tenants for the property.

The delivery of Velasco represents the cumulative efforts of Ardstone and Hardwicke, who have been in strong partnership over the past 24 months.  In a joint statement, both companies congratulated Irish Life on their purchase remarking that the transaction was completed in a very timely manner.  John Moran CEO of JLL Dublin who advised Ardstone and Hardwicke on the sale said “the price achieved is reflective of the both the quality of the building and its pivotal location at the axis of the traditional city core and the South Docks”.

The sale of Velasco is another very successful result for Ardstone, following its recent disposal of 2 Habourmaster Place in the IFSC to German fund Real IS.  Ardstone and Hardwicke have also recently completed the refurbishment of 100 Mount Street, which is fully leased and is believed to be under offer to an international purchaser.

Martin OReilly Head of Property at Irish Life said: “After many years of no new development stock being constructed, the first schemes are now coming out of the ground and changing the landscape of Dublin’s skyline. Irish Life is delighted to take ownership of a new Dublin City landmark. Velasco will offer a fantastic opportunity for occupiers to locate in the heart of Dublin and enjoy all the benefits that brings for their staff.  This acquisition represents another active “enhance to core” play by Irish Life in the Central Dublin office market. Other notable examples include the ongoing development of 1GQ at Georges Quay and refurbishment at 2-4 Merrion Row, following successful refurbishment and releasing projects such as Georges Dock in the IFSC and 30 Herbert Street.”

Irish Life has been very active in the Irish market over the last three years having acquired €800 million of direct property. Last year, Irish Life acquired the ‘Sovereign Portfolio’ for a price in excess of €150 million and more recently, Irish Life acquired Hume House Ballsbridge for a price in the region of €35 million.

According to Johnny Horgan, Executive Director, Capital Markets, CBRE who advised Irish Life on its acquisition“The office investment market remains attractive to core Irish and European investors due to the dynamics in the market at present. Prime yields are stable at 4.65% and rental growth has been a feature of the market with prime headline office rents now in the region of €645 per sq m (€60 per sq ft), supported by continued occupational demand.  The pipeline of Grade A’ office accommodation is positive and the ability to deliver excellent accommodation, such as Velasco, is an attractive proposition for any investor.”