Ardstone — the Irish investment firm — has completed a run of multi-million pound investments by spending £40m on a Birmingham office block.
Notable for being one of the few Irish investors to have avoided the property crash, in September Ardstone struck a £33.7m deal to buy the Citymark Building in Edinburgh from Irish Life. Within days it had spent another £25m on the Sentinel building in Glasgow.
The following month it agreed a €8.85m (£7.4m) takeover over of Annaville Residence, a South Dublin residential development. Now Ardstone has turned its attention to Victoria Square House, a 160,000 sq ft office block in the centre of Birmingham.
It is understood the Irish company, set up by former Friends First real estate veterans Donal Mulcahy and Donal O’Neill, beat a clutch of others investors to the deal including big hitters like Deutsche Bank and the Scottish Widows Investment Partnership. All are known to be taking advantage of the current climate of relatively cheap commercial property prices.
Victoria Square’s biggest tenant, occupying almost 54,000 sq ft, is the law firm DLA Piper. In 2010 the block was close to being sold to Nurton Developments and the Moorfield Group, but the owner decided to pull the sale and negotiate a new lease with DLA.
This autumn also saw Ardstone revive its partnership with property agents CBRE in a seven-year plan to spend around €100m (£83m) in the Irish commercial property market.
The fund’s first purchase was the €9.75m (£8.1m) off-market acquisition of Fleming Court, a multi-let office block of almost 30,000 sq ft on Mespil Road, in South Dublin. Completed in 2002, the property is let to six tenants including, Kennelly Tax Advisors and St James Place plc and boasts Sky TV, Amazon, Bank of Ireland and Twitter among its near business neighbours.
“This asset is located in a highly sought-after market, which has seen significant investment and letting activity recently,” Ardstone co-founder Donal O’Neill said. “Fleming Court is very well rented at current market rents and gives our fund a seven per cent annual income return. We also see great asset management potential to improve the asset which will not only add value to the property but will benefit our tenants in the long term.”
Explaining the joint venture’s investment strategy, O’Neill added: “We are buying into the beginning of the rental growth cycle in Dublin and we hope to add further investments to this one very soon.”
This is the second time the global multi-manager division of CBRE Global Investors has agreed an acquisitions partnership with Ardstone. Its multi-manager head is Jeremy Plummer. He said his firm sees “great opportunities in the Irish market and is pleased to have joined, once again, with Ardstone which has the know-how in the Irish market to find quality, off-market deals like Fleming Court and which is consistent with our approach of investing with local specialists.”
