Global real estate investment company Kennedy Wilson has completed the sale of Baggot Plaza, a wholly-owned, unlevered Grade A office building located in Dublin’s city center, for $165.4 million to Deka Immobilien, the specialist real estate investments arm of the Deka Group.
The sale reflects a net initial yield of 4%. The net proceeds of $165.1 million will be recycled into new opportunities including European acquisitions and developments as part of Kennedy Wilson’s investment management platforms.
Kennedy Wilson acquired the 92,000 square foot 1970s building on Upper Baggot Street as part of the Project Opera non-performing loan portfolio in 2013. After securing vacant possession, Kennedy Wilson received planning consent for a ‘back to frame’ redevelopment. This added 37,700 square feet to the building, including a signature triple-height atrium, and transformed the building into a Grade A, corporate HQ with LEED Gold certification. In May 2015, the Bank of Ireland signed a 25-year lease agreement for occupation in July 2016 at market-leading rents for the time, generating a stabilized yield on cost of 8.6%.
Ali Rohan, Head of Ireland, Kennedy Wilson Europe, said: “Baggot Plaza showcases the breadth of our investment, development and asset management capabilities. Having opportunistically acquired the building as part of a larger NPL portfolio, we saw the market timing potential of a comprehensive refurbishment versus a knock-down and rebuild strategy, and delivered a significant, long-term lease to a credit worthy occupier. Smart reuse of the existing structure allowed us to achieve a LEED Gold rating while working with Bank of Ireland to help create an innovative new space for its city center staff.”