The Starwood-owned Irish property company, Gangkhar, is selling an historic Dublin police headquarters to Hibernia for €70m (£52m). The off-market deal is the investment trust’s fourteenth — and its second biggest — acquisition since its 2013 inception.
Harcourt Square, in the Dublin 2 district, is the regional headquarters of the Irish police force, Garda Siochana. Containing four individual office blocks, it sits on a 1.9-acre plot at the junction of Harcourt Street and Charlotte Way, a short distance from St. Stephen’s Green in the centre of Dublin.
The entire property is let to the Office of Public Works (OPW) and fully occupied by the Gardai at a rent of €38 (£28) per sq ft. The lease on Block One expired in late 2014 and the leases on the three remaining blocks will expire on separate dates during 2016.
It is understood the OPW has applied for a court lease renewal on Block One with discussions underway on extending the remaining contracts. Hibernia, however, has made no secret of its intention to redevelop the site.
“We are delighted with this off-market acquisition which gives us substantial near term income and exciting redevelopment opportunities in the traditional office core of Dublin,” commented Kevin Nowlan, Hibernia’s chief executive.
“The completion of the Luas Cross City project in 2017, linking the Green line to the Red line and the city’s main railway stations, will further enhance the area’s public transport links.
“We expect to submit a planning application shortly and look forward to working closely with Dublin City Council to deliver attractive new Grade A office space in the city centre in future,” added Nowlan.
The purchase is Hibernia’s fourteenth since its 2013 listing and, once completed, will bring the REIT’s investment tally to €506m (£375m). It has a further €43m (£32) committed to pipeline deals.
Harcourt Square formed part of the National Asset Management Agency’s “Project Aspen” portfolio sale to a consortium led by US private investment company, Starwood Capital two years ago. Hibernia is buying the property from Gangkhar, a Dublin-registered vehicle controlled by Starwood.
Eamonn Hughes, of Goodbody Stockbrokers, is also convinced Harcourt Square is destined for development. “We would expect demolition and construction to begin on the site in the medium term, with the project likely to take around two years,” he said.
“We estimate the site could cater for a development of around 250,000 to 300,000 sq ft.”
In a trading update, Hibernia last week said it sees a number of acquisition opportunities in the Dublin commercial property sphere over the next year and a half.
