HARVEY had pre-let Unit Q1 Aerodrome Business Park, Rathcoole, Co. Dublin for developers and the Lease was effective from 2010. The owners are a group of private investors and they engaged us to sell the investment.
Whilst the asset and calibre of the Tenant covenant are both of superb quality, we were aware that with a lot size of in excess of €26 million, the pool of buyers would be far shallower than for smaller lot sizes of €5 – €15 million. The fact that the Term certain income was in excess of 8 years but less than 10 years also ruled out numerous Funds.
What We Did
To protect our Clients’ personal details, it was decided that the investment would be offered off market. A target list of potential purchasers was prepared and agents were allocated to each of the these. All parties signed Non Disclosure Agreements. A professionally designed Information Memorandum was prepared with offers sought in the region of €27 million (exclusive).
The approach we adopted generated interest from a number of seriously interested parties. Following a best bids process, several offers were received, all of which exceeded the indicative pricing. The property was sold to Irish Life Assurance plc. It was reported in the Irish Times as having been sold for €28 million (exclusive).
Onerous Lease Disposal
Our Client had an onerous Lease on a reasonable quality, detached, high bay warehouse and office facility of 9,350 sq. m. within Citywest Business Campus which was surplus to its operational requirements. As the Lease was historic, the property was significantly over-rented and the next break option date was a number of years away.
HARVEY was instructed to offer the property for letting by DHL Supply Chain with a view to securing a Sub-Tenant or alternatively, a replacement Tenant.
The property was owned by an Irish pension fund, which was not of a mind to sell same. This eliminated the option of delivering a purchaser to it with vacant possession, thereby releasing our Client from the Lease. In addition, market conditions were improving so the level of over-renting was eroding as time passed. The pension fund appointed its own agent to also offer the property for letting. That said, if its agent secured a replacement, medium to long term Tenant, it would have had to firstly negotiate a Surrender with our Client. In this scenario, this would have strengthened the Landlord’s negotiating position.
What We Did
We conducted a direct marketing campaign, targeted general enquiries in the market and our key contacts in 3PL’s and 4PL’s over the course of the instruction. We recognised that advertising was not the answer and kept this to a minimum. We utilised our press contacts and secured editorial commentary.
We recognised that the wording of the repair and yielding up covenants in the Lease were a very significant financial factor for our Client and recommended that the monetary aspect of these needed to be assessed. Once armed with this information, this enabled us to advise our Client and for them to take informed commercial decisions.
We delivered a replacement Tenant willing to commit to a long term Lease. Simultaneously, we negotiated a cost effective Lease Surrender for our Client whilst also negotiating a rent free period, break options and a qualification of the repair clause in the new Lease for the incoming Tenant. We saved our outgoing Client (DHL Supply Chain) a very substantial sum of money.
Acquisition, Development Advice & Letting
HARVEY had previously sold a facility in Turnpike Road, Ballymount of 7,994 sq. m. twice historically. A Receiver had appointed another agency to sell the property and it had languished on the market. We felt that it was one of the best refurbishment opportunities in Dublin’s industrial & logistics property market at the relevant point in time and acquired it for our Client.
We provided refurbishment and development advice and were instructed as Sole Agent to offer the property for letting.
The market conditions were still quite challenging when refurbishment works were underway. In addition, the lot size was relatively sizeable in the Dublin market and therefore, there was a smaller pool of enquiries active in the market at the time.
The challenge was to deliver a Tenant of strong financial covenant, thereby delivering an investment value in excess of vacant possession value.
What We Did
We prepared clear, concise marketing details highlighting the property’s key features. We conducted a direct marketing campaign and targeted general enquiries which had been in the market over a period of time together with 3PL and 4PL companies. We utilised our press contacts and secured favourable editorial commentary. Banners and large signs were designed and erected. Colour display advertisements featured in the press.
Meaningful negotiations commenced with SIG Ireland. These became somewhat protracted however, a new long term letting of the entirety was successfully concluded. This added several million Euro to the vacant possession value.
Vacant Possession Sale
Following the closure of the former Diamond Innovations Irish Operations facility in Clonshaugh Business & Technology Park, its HQ, comprising older type, large scale, heavy industry buildings of 19,374 sq. m. on a site of 9.73 ha. / 24.04 acres had to be disposed of. We were retained to act as agent on behalf of SANDVIK, which at that point owned the property.
The buildings were heavily fragmented and built to suit a specific purpose. The market conditions were extremely challenging at the date of launch of the campaign. To complicate matters, there was the possibility that there was a buyback option in favour of IDA Ireland in respect of part of the lands to the rear of the buildings.
What We Did
We met with Senior Executives from IDA Ireland and negotiated a position with their Independent Valuer whereby the property could subsequently be offered in a single lot, thereby ensuring that our Client controlled decision making.
We formulated an innovative marketing campaign, utilised our press contacts and secured the headline position in the editorial section of the commercial property supplements of the main newspapers. Extensive direct marketing was also undertaken.
Following consistent effort, we delivered numerous, fully funded parties with a certain level of interest. A sale was subsequently agreed with an owner occupier and the transaction successfully completed.
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