Hibernia funds €38m bridge loan to unlock Cumberland House purchase and refurbishment

Hibernia REIT has extended the existing owners of Cumberland House, the Christopher Bennett Group, with a €38m six-month bridge loan to enable the sale of vacant office block in Dublin 2 to the Irish real estate investment trust ahead of a major refurbishment.

Hibernia logoMorretino Limited, the subsidiary of the Christopher Bennett Group which owns the circa 112,000 sq ft Cumberland House, was placed into receivership on 29 May under Luke Charleton of Ernst & Young’s control.

Charleton subsequently submitted a planning application with Dublin City Council on 19 June to demolish the existing 112,000 sq ft block and construct two buildings in its place, ranging in height from four to eight storeys, with a combined gross lettable area (GFS) of just above 300,000 sq ft.

Five weeks later, on 24 July, Hibernia REIT confirmed it was in exclusive discussions to acquire the seven-storey office block near Merrion Square with a view to implementing a substantial refurbishment play.

On Monday 11 August, Dublin City Council granted an Application to Extend permission which essentially removes the right to appeal. 

However, Hibernia’s near-term investment plan is expected to be slightly less ambitious, looking to extend the existing building by around 80,000 sq ft to just under 200,000 sq ft.

Yesterday, Hibernia funded the €38m bridge loan to Morretino Limited, priced at an annualised interest rate of 6%, allowing the Christopher Bennett Group subsidiary to complete the sale to the Irish REIT within weeks.

When Cumberland House is redeveloped into Grade A office space under Hibernia’s expected plans, it is expected to be ideal for Dublin’s expanding Telecommunications, Media and Technology (TMT) occupiers.

The approved scheme comprises:

  • Block A: construction of a 7-8 storey building (including lower ground floor) providing c.649 sqm (c.6,985 sq ft) GFA of retail floor at ground floor level and c. 25,88 sqm (c.27856. sqft) GFA of office floor space from lower ground floor to 6th floor level.  This block also incorporates a glazed atrium with internal bridge connections at upper floors;
  • Block B: construction of a 4-storey building (including lower ground floor) providing c. 2,674 sqm (c.28,782 sq ft) GFA office floor space.

Eircom, the Irish telecommunications company, was the last tenant to depart after moving to its new headquarters in Heuston South Quarter, on the west edge of Dublin city.

Also this morning, Hibernia confirmed it had entered a contract with JJ Rhatigan & Company (JJR) for the fit-out and completion of the 213 partially-completed apartments in Block 3, Wyckham Point, Dundrum, Dublin 16. 

Hibernia acquired the a €150m Ulster Bank senior loan securing the multi-family block formerly owned by Dorville Homes back in February for €67m, reflecting a 55% discount.

JJR will commence on site immediately with a construction team growing to approximately 160 people working on the project.  

It is expected that the first apartments will be available to let by mid-2015 and that the project will be fully completed by the end of 2015.  The total cost to complete the apartments is expected to be less than €25m, funded by cash resources.

Just over two weeks ago, Hibernia closed €100m three-year revolving credit facility with Bank of Ireland.

Kevin Nowlan, chief executive officer of WK Nowlan REIT Management Limited, the Investment Manager, said in a statement: “When finished, these apartments will offer some of the best multi-family accommodation in Ireland and we will be bringing these units to the market at a time when residential accommodation in Dublin is in short supply.”

jwallace@costar.co.uk

About CoStar News

Finance Editor, CoStar News
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