Hibernia REIT has completed the purchase of the largely vacant Cumberland House office block in Dublin city centre from Christopher Bennett Group for €49m, converting a €38m bridge loan extended last August to the legacy owner to facilitate the acquisition.
The circa 112,000 sq ft Cumberland House, acquired from Morretino Limited, a subsidiary of Christopher Bennett Group, was placed into receivership on 29 May under Luke Charleton of Ernst & Young’s control.
Hibernia’s unusual move in providing a €38m short-term secured bridge loan, priced at an annualised interest rate of 6%, allowed the Christopher Bennett Group to complete the deal with the Irish REIT ahead side-stepping the vacant block coming to market officially through receiver’s control.
CoStar News reported on the bridge loan strategy last August, please click here for the story.
As part of the €49m transaction, which was €1m below Savills asking price, the bridge loan is retired.
The building is on a 1.6 acre site in a central Dublin 2 location, close to Merrion Square, Government Buildings, Trinity College and Dublin’s busiest commuter railway station, Pearse Street.
The largely vacant building is Hibernia is in discussions with a number of prospective tenants regarding potential short term lettings. The price paid equates to a capital value of c. €360 per sq. ft. for the existing office space.
The property has significant redevelopment potential: there is existing planning permission to replace the current building with up to 250,000 net sq. ft. of new office accommodation. Alternatively, the existing building could be refurbished and extended.
This acquisition is Hibernia’s fifteenth since listing in December 2013: following its completion Hibernia will have invested €517m, with a further €43m committed.
Kevin Nowlan, chief executive officer, WK Nowlan REIT Management Limited, Hibernia’s investment manager, said: “We are delighted to have agreed this transaction, which was facilitated by our ability to provide a short-term loan secured on the property to the vendor in August 2014.
“Cumberland House is an important addition to our central Dublin office portfolio with exciting asset management and redevelopment opportunities and we look forward to working with potential occupiers on plans for it.”