Beech Hill of­fice at €8.75m prom­ises yield of up to 7pc

Irish Independent - Business Week - - PROPERTY 13 - Ronald Quin­lan

AGENTS Knight Frank are guid­ing a price of €8.75m for Beaver House at the Beech Hill of­fice cam­pus in Clonskeagh, Dublin 4.

Re­cently re­fur­bished, the three-storey of­fice build­ing is fully-let to three ex­cel­lent ten­ants and is cur­rently pro­duc­ing a com­bined rent roll of €527,858 per an­num. The po­ten­tial pur­chaser can ex­pect a net ini­tial return of 5.80pc (af­ter stan­dard ac­qui­si­tion costs of 4.46pc) and a low cap­i­tal value of €296 per sq ft. The av­er­age rent equates to €14.95 per sq ft, and presents strong re­ver­sion­ary po­ten­tial.

Fol­low­ing re­cent let­tings in Beaver House, the agents be­lieve there is po­ten­tial to in­crease in­come to around €20 per sq ft and €1,250 per car space, which would give an in­vestor a net ini­tial yield of over 7pc in 2020. The weighted un­ex­pired lease term is in the or­der of 6.5 years.

The largest ten­ant in the build­ing (66pc of space) is Maxim In­te­grated, who oc­cupy the en­tire of both the first and sec­ond floors on a 15-year FRI lease from 2015 at a pass­ing rent of €315,000 per an­num to in­clude 60 car spa­ces. This rent equates to €13 per sq ft, which offers sig­nif­i­cant room for rental growth over the re­main­ing term. There is a ten­ant break op­tion in 2025 and over 7.5 years term cer­tain re­main­ing. Maxim are a bluechip covenant.

The re­main­ing space (33pc) is let to Pin­ergy and Jef­fer­son Pay­roll. Pin­ergy are the most re­cent ten­ant and have taken a 10-year lease from July 1 2017 for part of the ground floor of the prop­erty at a rent of €139,920 per an­num, equat­ing to €19 per sq ft.

Jef­fer­son Pay­roll oc­cupy the sec­ond suite on the ground floor and oc­cupy on a 10-year FRI lease from Jan­uary 1, 2017 at €18.50 per sq ft. Both ten­ants have break op­tions on the ex­piry of five years, sub­ject to 12 months’ prior no­tice.

There is con­tin­ued de­mand for well-es­tab­lished sub­ur­ban in­vest­ment as­sets pre­sent­ing at­trac­tive re­turns.

This de­mand was ev­i­denced with the sale ear­lier this year of Topaz House at the Beech Hill Of­fice Cam­pus for over €8m. The price equated to a net ini­tial yield of ap­prox­i­mately 5.58pc off a pass­ing rent in the or­der of €18.35 per sq ft and €1,000 per car space. Topaz House’s cap­i­tal value of €375 per sq ft sug­gests that Beaver House car­ries con­sid­er­able value also.

Beaver House is a mod­ern, three-storey semi-de­tached of­fice build­ing. The prop­erty is a con­crete-framed struc­ture with an at­trac­tive brick and ren­der façade un­der a slate pitched roof. The build­ing forms part of a U-shaped block and ex­tends to a to­tal area of ap­prox­i­mately 2,739 sq m (29,482 sq ft) GIA with 90 car park­ing spa­ces lo­cated at base­ment and sur- face lev­els. Each of the three L-shaped floors are de­signed to ac­com­mo­date sub divi­sion, pro­vid­ing two suites per floor, if re­quired. The re­cently re­fur­bished ac­com­mo­da­tion is fin­ished to a high stan­dard and is con­sum­mate with the ex­pec­ta­tions that cor­po­rate oc­cu­piers ex­pect.

In­side, the build­ing com­prises a triple-height glazed en­trance lobby and re­cep­tion desk, flex­i­ble of­fice lay­out, sus­pended ceil­ings with re­cessed cat­e­gory 2 light­ing, raised ac­cess floors, air-con­di­tion­ing, pas­sen­ger lift and fully com­pleted toi­let fa­cil­i­ties in­clud­ing shower.

The build­ing’s de­sign and ori­en­ta­tion pro­vides for high lev­els of natural light to pen­e­trate the floor plates, fur­ther en­hanc­ing the of­fice’s sense of space and open­ness.

Beaver House is cen­trally lo­cated within the suc­cess­ful Beech Hill Of­fice Cam­pus in Dublin 4. Sit­u­ated just off the Clonskeagh Road be­tween Don­ny­brook and Clonskeagh, the cam­pus is laid out in six main blocks within an at­trac­tive, ma­ture, fully man­aged and land­scaped en­vi­ron­ment. The de­vel­op­ment’s ten­ant mix is strong and in­cludes Eric­s­son, Topaz, Smur­fit Kappa, Paddy Power, Univer­sity Col­lege Dublin (UCD), Nokia and David Lloyd Riverview Gym.

Knight Frank say there is po­ten­tial to in­crease the av­er­age rent at Beaver House to €20 per sq ft

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