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November 30 2017 2:30 AM
IDA Ireland, the state agency which recruits foreign direct investment for Ireland, is understood to have narrowed down its beauty parade of possible new headquarters to four premises on the south side of Dublin's prime central business district.
With the search underway as office rents approach peak levels, IDA and its co-tenants could be faced with a rent bill totalling up to €7m a year from 2020, depending on their negotiating skills. This is believed to be an increase of about €2.4m on the €4.6m which they are reported to be paying in rent for Wilton Park House, IDA's existing headquarters.
The four shortlisted buildings are believed to include 5 Hanover Quay, a seven storey office building of about 160,000 sq ft being developed by Oaktree's Targeted Investment Opportunities ICAV. Expected to be completed in the first quarter of 2018, joint agents Cushman & Wakefield and Savills are believed to have been targeting rents of about €57 to €58 per sq ft. for 5 Hanover.
IDA's shortlist also includes Hibernia REIT's 1SJRQ, at Sir John Rogerson's Quay, in south docklands, a 110,000 sq ft building with river front views which is due to be completed by June next year. Also on the list is Michael Cotter / Park Development's 125,000 Reflector building on nearby Hanover Quay and Grand Canal Dock.
Its key selling point is also its waterfront views and it is due to be completed by the third quarter of 2018. Savills had been guiding €55 per sq ft for the space, placing it just below the top rents being achieved in Dublin's central business district. Also in the mix is Kenny family's Three Park Place on Hatch St, Dublin 2, being developed by Clancourt Group. Joint agents BNP Paribas Real Estate and Knight Frank had been quoting rents of €65 per sq ft for office space due to be completed in this year. It overlooks Iveagh Gardens and is close to the Harcourt St Luas stop.
IDA's move has been necessitated by a deadline for the expiration of its lease on Wilton Park House at Wilton Place, overlooking the Grand Canal in a prime Dublin 2 office area. This lease is due to run out in 2019 and its landlord, the Irish property investment fund IPUT, plans to redevelop it.
IDA needs to nail down a lease by next Spring so that it can complete fit out and occupation by September 2019. However its search comes at a time when office rents are rising to more than €60 per sq ft.
Some agents have forecast that rents would peak this year at €65 per sq ft and may dip next year. Others, such as Savills say that they will not peak until 2019 when they will reach €68.50 per sq ft.
Agent GVA Donal O Buachalla has been leading IDA's search but GVA managing director Fergal Burke declined to comment on the possible short list.
IDA's stated requirement has been for between 100,000 and 120,000 sq ft of new accommodation in Dublin City centre including the northside areas of Dublin 1 and 3 as well as Dublin 2 and 4.
Because of the scale and quality of the requirement as well as the deadline, this has limited its search to large buildings that would be available on time. Consequently it has ruled out a number of developments currently underway such as Dublin's prospective tallest building, the Exo building at the Point Village in north docklands.
IDA itself is expected to take about two thirds of the space in the new offices with the other portion being taken by three other state agencies with which it also currently shares Wilton Park House. Those are Science Foundation Ireland (SFI), Sustainable Energy Authority of Ireland (SEAI) and the Marine Institute.