Irish Life, Hibernia REIT and Lone Star carve up NAMA’s Redwood portfolio

Irish Life, Hibernia REIT and Lone Star have carved up NAMA’s four-strong Redwood portfolio, for a combined price of around €213m which reflects a one-third increase on the initial asking price.

Irish Life logoThe most prime asset within the portfolio, no. 2 Grand Canal Square in Dublin 2, was the most fiercely-contested, selling in the end to Irish Life for around €120.2m which reflects an almost 40% increase on the initial €86m asking price.

Underbidders on No. 2 Grand Canal Square, which is fully let to William Fry and Capita for a combined €4.44m annual rent, were understood to have comprised Hibernia REIT, Union and Patrizia, while IPUT did not bid.

Irish Life, which has acquired the asset for a pension fund that does not gear, is expected to seek to drive value in the asset through re-gearing expiring leases at high levels than the property’s current €40 per sq ft leases.

Hibernia REIT confirmed this morning that it has exchanged contracts to acquire the Observatory Building for €52.25m, just under a 19% premium on the initial €44m asking price.

The Observatory Building is over 95% let, including to Riot Games and Publicis, off low average rents of €26 per sq ft, with a weighted average period to break of four years and an average unexpired lease term of 11 years.  Over 44% of the current rent roll has rent reviews during or before 2018 with 56% subject to review in 2019.  The annual headline rent is €2.2m.

Kevin Nowlan, chief executive officer, WK Nowlan REIT Management, Hibernia REIT’s investment manager, said in a statement: “Our acquisition of the Observatory Building adds another high quality, central Dublin office property with substantial reversionary potential to our portfolio. 

“Its location adjacent to our existing office building and site with planning permission for 125,000 net sq. ft. of offices on Windmill Lane consolidates our position in this attractive and easily accessible South Docks area and will offer significant benefits in the longer term through active asset management.”

Finally, Lone Star has acquired One Clarendon Row and the immediately adjacent Chatham Court for a combined price of €41m, which reflects a 28% premium on the initial €32m asking price.

Lone Star already owned a loan, in Project Stone, secured by a 90% stake in One Clarendon Row retail component initially extended to AIAC, now IBRC Assurance Company, which acquired the stake from the building’s developer.

Knight Frank sold the Redwood portfolio on behalf of NAMA.

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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