LONDON (Alliance News) - Green REIT PLC Friday said it has conditionally agreed to acquire One Albert Quay, a Grade A office building under construction in Cork city centre, for up to EUR58 million.
In a statement, the Irish property investment company said the construction has pre-lets agreed for more than half of the building.
Green REIT will pay between EUR55 million and EUR58 million for One Albert Quay, which is being developed by JCD Group, depending on lettings when the final payment is made. The company expects to make the first payment for the office block in the first quarter of 2016, with the remaining payments to be phased as leases begin, and the final payment to be made 12 months later.
The company is using its revolving credit facility with Barclays Bank Ireland PLC to fund the deal.
The single office block will have a lettable area of 166,000 square feet. over seven floors, although that is subject to final measurement.
Pre-letting deals have been inked with two tenants for 89,000 square feet, namely with fire protection and security company Tyco for 75,000 square feet and 'big four' auditor PricewaterhouseCoopers for the remainder.
Together, Tyco and PwC will pay EUR2.1 million in rent per annum for the space, while Green REIT expects total rent from the building to amount to between EUR3.6 million and EUR4.1 million depending on whether it is occupied in full.
The company calculated a capitalisation yield of 6.75% on let areas and 7.00% on unlet areas.
"We are delighted to announce the acquisition of what will be Cork's best office building and the first major city centre office development in Cork for over a decade. The yield premium over Dublin is attractive, particularly with the Cork office rental market at an earlier stage in the recovery cycle. We look forward to working with JCD Group in the period ahead to secure further high quality tenants for the remaining space in One Albert Quay," Pat Gunne, chief executive, Green Property REIT Ventures Ltd, the company's investment manager, said in a statement.
Savills acted as the agent on the transaction, Green REIT said.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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