TELEPHONE HOUSE 43-46 MARLBOROUGH STREET, DUBLIN 1 FULLY LET PRIME CITY CENTRE OFFICE INVESTMENT - TENANT NOT AFFECTED WWW.TELEPHONEHOUSEDUBLIN.COM
INVESTMENT SUMMARY Substantial city centre office investment 100% let to single occupier Annual rental income 968,084 plus VAT Additional annual income of 16,000 from communication mast licences Extends to approx. 7,504.1 sq.m. (80,773 sq.ft.) NIA Fully let to HCL (Ireland) Information Systems Limited with full guarantee from HCL EAS Limited DESCRIPTION 10 year lease from 23rd July 2015 with tenant break option at 30/9/2021 & 30/9/2023 The property comprises a late 1960 s/early 1970 s nine storey over partial basement office building in Dublin City Centre. It is understood and suspended ceilings incorporating recessed lighting. Typical storey heights are in the order of 2.97m with the 1st floor being approximately to the office areas by means of variable refrigerant flow (VRF) and direct expansion (DX) split system air conditioning installations. Full repairing and insuring lease that a major refurbishment of the building was 4.35m and ground floor approximately 3.15m. The building has a fire alarm system, intruder Renunciation of Renewal Rights Superb parking provision of approx. 61 car spaces (1 space per 123.02 sq.m.) Low base rent provides solid platform to drive rental growth Opportunity for considerable Asset Management potential in the medium term undertaken in 2004. The structure of the building comprises a cast in-situ reinforced concrete frame supporting the flat asphalt covered roof with pre-cast reinforced concrete T beam and concrete block floors. External walls comprise reinforced precast concrete H panels set in uniform horizontal and vertical structural bays, with feature glazed/ granite entrance. Internally the offices benefit from plastered Office floors provide open plan flexible floor plates with kitchen and staff toilet facilities. The ground floor presents a feature reception and main canteen facility. There is a mix of natural and mechanical ventilation. Space heating to the building is provided by means of a low temperature hot water (LTHW) system, comprising 2 Remeha P420 gasfired boilers, circulating pumps, pressurisation unit, controls and insulated steel pipework. alarm system, CCTV and proximity detector access control on main entry and egress points, including the lift lobby and the office areas. Permeability through the property is primarily facilitated via three 13 Person Kone electric traction lifts. Externally the property benefits from 61 surface and under-croft car parking spaces. 18 of the spaces are located on a separate plot adjacent, at Britain Place. and painted walls, raised access carpet tiled floors Comfort cooling / air conditioning is provided 2
LOCATION The building is located on the northern end of Marlborough Street just west of one of Dublin s main commercial/historic thoroughfares, O Connell Street. O Connell Street is famous for its historic buildings such as the General Post Office (GPO) and hosts many of the city s most noteworthy monuments to include Daniel O Connell, O Connell Bridge and the Millennium Spire. O Connell Street has seen significant regeneration over the years, with more pedestrian and shopping friendly pavements and street furniture. Busy Parnell Street lies just to the north of Telephone House with its ever enlarging variety of ethnic eateries. Cathal Brugha Street lies to the south and remains home to one of Dublin Institute of Technology s main faculties; Hospitality, Culinary Arts and Food Technology. The property is ideally located to take full advantage of all Dublin City Centre amenities and services, to include Henry Street shopping (Arnotts/The Ilac Shopping Centre/ Jervis Shopping Centre) which is home to all well-known and international high street brands. Others include The Gate Theatre, The Ambassador Theatre, The Savoy Cinema, The Gresham Hotel, The Garden of Remembrance, Rotunda Maternity Hospital, the Pro Cathedral and many more. The O Connell Street area is set to be further enhanced with the former Carlton Cinema site and surrounding lands earmarked for future major commercial redevelopment along with the former Clery s department store set to cater for both retail and office accommodation. The viability of both these large scale projects is further enhanced by the current construction of the Luas Cross City line that will link both the southside Green Line to the northside Red Line. The south bound tramway of this key piece of infrastructure will travel down Marlborough Street, presenting a Luas stop within 50 metres of Telephone House. The location is also superbly situated with easy access to mainline rail as both Connolly station and Tara Street stations are within easy walking distance. All major bus routes, with regular Dublin Airport/National services, also run along/close to the O Connell Street area. With a rapidly growing greater urban area population (the catchment area population is estimated at 1.8 million and expected to grow to 2.1 million by 2020), Telephone House is extremely commuter friendly. 3
GRAND CANAL CONVENTION CENTRE IFSC GEORGES QUAY TARA STREET DART STATION TRINITY COLLEGE SIG CONNOLLY STATION LUAS RED LINE IRISH LIFE CENTRE LIBERTY HALL DART O CONNELL STREET DIT CATHAL BRUGA STREET ST. MARY S PRO-CATHEDRAL GPO DEPARTMENT OF EDUCATION & SKILLS GRESHAM HOTEL CLERYS Q PARK HENRY STREET LUAS CROSS CITY TELEPHONE HOUSE HOLIDAY INN JURYS INN ROTUNDA HOSPITAL 4
SPECIFICATION Concrete frame construction (Combination steel Universal Beams and Universal Columns are evident in some parts of the property) Pre-cast concrete H panel elevations Combination of variable refrigerant flow (VRF) and direct expansion (DX) split system air conditioning installations Suspended Ceilings/Recessed Lighting throughout ACCOMMODATION NIA SQ.M. NIA SQ.FT. GIA SQ.M. GIA SQ.FT IPMS SQ.M. IPMS SQ.FT. GROUND 860 9,256 1,021.6 10,997 870.7 9,372 FIRST 889.3 9,572 1,071.2 11,530 908.8 9,782 SECOND 898.7 9,674 1,069.0 11,507 919.2 9,894 THIRD 888.5 9,564 1,067.1 11,486 910.2 9,797 FOURTH 889.3 9,573 1,067.2 11,488 910.2 9,797 FIFTH 916.8 9,868 1,073.8 11,559 933.6 10,050 SIXTH 915.8 9,858 1,072.6 11,546 932.9 10,042 SEVENTH 881.9 9,492 1,066.1 11,475 902.5 9,714 EIGHTH 146.3 1,575 167.7 1,806 146.6 1,578 BASEMENT 217.4 2,341 680.9 7,329 219.1 2,358 7,504.0 80,773 9,357.2 100,721 7,653.7 82,384 3 floors benefit from Raised Access Floors with scope to incorporate throughout Automatic, early warning fire alarm and detection system, providing protection for all areas of the building The building is provided with a metered natural gas supply Windows are a combination of single and thermally broken double glazed units Three 13 Person Kone electric traction lifts 61 car parking spaces GIA Gross Internal Area NIA Net Internal Area IPMS International Property Measurement Standards 5
TENANCY SUMMARY The property is fully let to the HCL (Ireland Limited) Information Systems limited on a full repairing and insuring lease. Salient terms are as follows: Lease Term 10 Years Term Commencement 23rd July 2015 Rent 968,084 per annum plus VAT paid quarterly in advance. Repairing Full Repairing in the condition prevailing at the Term Commencement Date as evidenced by the Schedule of Condition. Rent Review 22nd July 2020, capped 1,303,190 per annum. Tenant Break Option 30th September 2021 & 30th September 2023 subject to 6 months prior notice in writing. Renunciation of Renewal Rights Tenant has executed a Deed of Renunciation. Roof Licence Fee Where licenses for third party equipment/ plant are secured, any income arising shall be split 50/50 between the Landlord and Tenant. Alienation Group Companies can sub-let or assign in whole or part but not below the passing rent. The Tenant has an entitlement to assign or sublet the entire or any part to Eircom Limited or any subsidiary or affiliate company on condition that Eircom Limited provides a guarantee. Guarantee The Lease is guaranteed by HCL EAS Limited (UK). COVENANT DETAILS HCL (Ireland) Information Systems is a 100% Uttar Pradesh. It offers services including software owned subsidiary of HCL EAS Limited (UK Company) who guarantees the lease. HCL EAS Limited is a holding company that has reported net assets of 124,482,468 as of 30th June 2015. The company is a subsidiary undertaking of HCL Technologies Austria Gmbh Limited, a Company incorporated in Austria. The Company s ultimate parent undertaking is HCL Technologies Limited, a company incorporated in India. HCL Technologies Limited is an Indian global IT services company headquartered in Noida, consulting, enterprise transformation, remote infrastructure management, engineering and R&D services, and business process outsourcing (BPO). HCL Technologies has demonstrated strong growth through the recent economic downturn, emerging as one of only eight 21st century listed technology companies in the world to cross $1bn in Net Profit, $5bn in Revenue and $15bn in Market Capitalization. The company operates in 31 countries and has over 10,000 employees. 6
ECONOMIC AND INVESTMENT COMMENTARY Ireland s impressive economic recovery has continued in Q3 2015, and with the conditions in place for continued rapid growth, it is set to remain the euro-zone s fastest-growing economy. Irish GDP posted another very solid quarterly expansion of 1.4% in Q3. While this was smaller than the expansions seen in the first half of the year, it still lifted the annual growth rate from Q2 s 6.8% to 7.0% and suggests that average growth in 2015 overall will also be around 7%. Household spending also posted another solid gain of 0.7% in Q3, reflecting the continued recovery in the housing and labour markets. Exports also posted a quarterly gain of 2.2%. The investment property market has also remained buoyant with approx. 2.2 billion transacted up to Q3 2015. Although the 2.2 billion is slightly behind that of the 2.9 billion transacted at the same point in 2014, it remains well ahead of long term averages. One of the primary reasons for the apparent slowdown in transaction activity is due to more prolific presence of loan debt sales throughout the year with Project Jewel leading the way selling at approx. 1.85 billion. The office market continues to account for the largest share of the investment market comprising 60% of the 2.2billion transacted by the end of Q3 2015. Although prime office yields have steadied at 4.5% following a sustained period of contraction, the out-performance of the Irish economy in a European context combined with the continuation of the ECB quantitative easing programme will continue to exert downward pressure on yields in the coming quarters. The weight of capital chasing assets is increasingly coming from longer-term domestic capital, with Irish pension funds particularly active in 2015. Although the geographic focus of investment activity has broadened in 2015, activity remains focused on Dublin, accounting for 90% of transactions. The largest single office lot sale of 2015 was the purchase by the Central Bank of the 127,000 sq.ft. Block R in Spencer Dock for 104 million. The sale was significantly ahead of the 90 million guide price, with the price achieved representing a capital value of 819 per square foot. The next most significant transaction in Dublin 1 was the purchase of Georges Dock House in the IFSC for 35.5 million by an Irish institutional investor. 7
OFFICE MARKET A total of 543,570 sq.ft. of office space was let in the third quarter, which represented the highest letting activity for a third quarter in over five years. Total activity for the first nine months of 2015 now stands at 1.73 million sq.ft., which represents a 25% increase on the same period last year. As the market still awaits a significant supply of new office stock to come online, the scarcity of available accommodation continues to drive rental appreciation with prime grade A rents now in the order of 55.00 per sq.ft. The share of Dublin 1 as a percentage of total take-up at the end of the third quarter in 2015 was 11%, slightly ahead of the 5 year average of 9.8%. In total, there were 31 deals transacted at an average deal size of 8,792 sq.ft. in Dublin 1. While the majority of these lettings were transacted in the IFSC, there were a number completed in other areas of Dublin 1 also. The third largest deal in the entire Dublin market was the letting to HCL Information Systems at Telephone House, indicating the strength of demand for well-located city centre space. The other significant letting in Dublin 1 outside of the IFSC was the leasing of 25,000 sq.ft. at the Steelworks on Foley Street by Independent Colleges. Although the city centre still had the highest take-up in the third quarter with a market share of 36%, the figure represents a substantial decline from the 60% share it held in 2014 as firms searched outside the city core due to severe supply shortage. This is reflected in the fact that the south suburbs and the city fringe accounted for 28% and 20% respectively in quarter three, which compares to 14% and 12% during the full year in 2014. 8
FURTHER INFORMATION TITLE The property is held on a combination of Long Leasehold and Freehold title GUIDE PRICE On application BER DETAILS BER No: 800359762 BER Rating: ZONING Zoned Z5 - City Centre WEBSITE www.telephonehousedublin.com CONTACT Adrian Trueick Adrian.trueick@ie.knightfrank.com Ross Fogarty Ross.fogarty@ie.knightfrank.com Knight Frank 20-21 Upper Pembroke Street Dublin 2 +353 1 634 2466 www.knightfrank.ie 9
Conditions to be noted: These particulars are issued by HT Meagher O Reilly trading as Knight Frank on the understanding that all the negotiations are conducted through them. Whilst every care has been taken in the preparation of these particulars, they do not constitute an offer or contract. All descriptions, dimensions, references to condition, permissions or licenses of use or occupation, access and other details are for guidance only, they are given in good faith and believed to be correct, and any intending purchaser/tenant should not 20-21 Upper Pembroke Street Dublin 2 +353 1 634 2466 www.knightfrank.ie WWW.TELEPHONEHOUSEDUBLIN.COM rely on them as statements or representation of fact but should satisfy themselves (at their own expense) as to the correctness of the information given. Prices are quoted exclusive of VAT (unless otherwise stated) and all negotiations are conducted on the basis that the purchaser/lessee shall be liable for any VAT arising on the transaction. Neither HT Meagher O Reilly trading as Knight Frank or any of their employees have any authority to make or give any representation or warranty in respect of this property. HT Meagher O Reilly trading as Knight Frank, Registered in Ireland No 385044, PSR Reg No 001266. HT Meagher O Reilly New Homes Limited trading as Knight Frank, Registered in Ireland No. 428289, PSR Reg No 001880. Registered Office 20-21 Upper Pembroke Street, Dublin 2.