Irish investment manager BCP Asset Management has purchased a Dublin office complex from pan-European investor M7 Real Estate for €33.5 mln.
Located on Fumbally Lane, Dublin 8, the asset was divested by M7 European Real Estate Investment Partners IV (M7 EREIP IV). The price represents a capital value per square foot of €403 and a reversionary yield of 8.5% on today’s ERV (estimated recovery value).
'We are delighted to acquire the Fumbally Lane office complex from M7 in an off-market transaction,' said Nick Cullen, Investment Director at BCP.
'At nearly full occupancy Fumbally Lane has proven itself as a convenient and affordable city centre fringe location for media, technology, and creative tenants. The emergence of the immediate area as a mixed use hub and the wider regeneration of Dublin 8 will serve to increase the attractiveness of this location to occupiers in the coming years.'
The asset comprises a modern five-storey office building with 55 underground car parking spaces and a further three period properties, including part of a deactivated distillery, which have been recently converted into offices totalling 83,699 ft2 (7,776 m2). In addition, the site also includes four residential units totalling 4,000 ft2 and a 1,600 m2 development site.
M7 acquired the asset in December 2016 with a vacancy rate of 17% which is now circa 2%, follow an asset management programme. M7 refurbished and improved the common areas, inking 19 new leases within the 20 months of its ownership and generating an additional annual contracted rent of €1.14 mln. Including planned lettings, this resulted in an increase in rental income of 51%.
The office space is occupied by businesses operating in the education, media, software, fashion, architecture and marketing sectors, such as Joe.ie, CMC Marketing, Adara Software, SquareUp, Ditta Eyewear, Disability Federation Ireland and the Institute of Technologies Ireland.
'The sale of our Fumbally Lane asset ahead of the anticipated exit time frame in our business plan demonstrates the strong occupational demand in the Dublin office market plus the success of our leasing strategy, which has focussed on providing a quality product with an engaged occupier approach,' concluded John Murnaghan, head of real estate in the UK and Ireland at M7.
CBRE acted for M7 Real Estate and Savills acted for BCP.