Union Investment acquires new Dublin office scheme

German asset manager Union Investment has acquired a planned office property at 2 Grand Parade, Dublin, from Hines and Peterson Group via a forward funding deal.

Financial details were not disclosed.

The building, which comprises around 9,600 m2 of rental space, is being constructed on a speculative basis and is scheduled for completion by mid of 2022. The developer is Hines.

The acquisition is being made on behalf of open-ended real estate fund Unilmmo: Deutschland, and follows another Dublin deal executed by the fund in 2015. With some 16,000 m2 of space, the Shannon Building on Burlington Road was let on a long-term lease to Amazon prior to completion in 2017.

'Dublin’s vibrant office market is currently attracting the interest of international investors. This is particularly true with regard to Union Investment,' said Martin Schellein, head of investment management Europe at Union Investment Real Estate.

'The 2 Grand Parade development is the fourth office property we have acquired in Dublin in the last months. The influx of international companies and the expansion plans of office users already based in Dublin are creating excellent conditions for letting speculative developments and for achieving corresponding value growth,' Schellein added.

'This is our first transaction with Union Investment in Ireland and we very much welcome this exciting new partnership. The project incorporates an imaginative restoration of a landmark building combined with a sensitively designed extension to the rear, all of which will combine to deliver a modern office complex at 2 Grand Parade,' said Brian Moran, senior managing director of Hines.

Around a third of the property's rental space is located in a historic existing building dating from 1964, known locally as the Carroll’s Building because it was used by Carroll’s Tobacco Group for many years. This building is being extensively upgraded as part of the development, and will be linked to a new build comprising the remaining two thirds of the rental space. The asset is targeting LEED Gold certification.

Including the forward funding of the 2 Grand Parade development, Union Investment currently holds seven real estate assets in Dublin worth around €770 mln.

Union Investment was advised commercially by HWBC and legally by A&L Goodbody.

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