Second Chance: The 5 Dublin Offices That Could Show The Way Forward For Refurbishments

Dublin's office market has a problem. While secondary office stock has been hit by high vacancy levels as major occupiers turn to the city's glossy new and sustainable office developments, it’s an open secret that the development pipeline is set for a juddering halt next year, with no one yet brave enough to start building speculatively.

And with the latest figures showing that in the last quarter the commercial real estate vacancy rate finally started to come down, occupiers might be facing a dwindling supply of suitable space sooner than they think.

The high costs of redevelopment and the limit on potential rental returns have kept major upgrades thin on the ground. But with declining inflation and a series of interest rate cuts, some buildings have seen steep enough valuation declines to make the prospect of refurbishment or re-purposing more viable.

“With sustainability, energy performance, and workplace experience now key decision drivers for occupiers, we see increasing demand for refurbished spaces that offer the design quality and efficiency of new builds, without the embedded carbon footprint,” Fine Grain Property Chief Operating Officer Darragh Lennon said.

“Many secondary buildings aren’t suitable for conversion to other uses, but with smart investment and a focus on ESG, wellness, and flexibility, they can meet modern tenant expectations,” he added.

With those factors in mind, Bisnow took a look at five key buildings that could dictate the direction of travel for existing stock as Dublin landlords seek to breathe new life into old buildings.

La Touche House, IFSC

AXA Investment Managers and BCP Capital paid about €84M in 2020 to acquire La Touche House — named after the Irish banking family who founded the Bank of Ireland — in the International Financial Services Centre and have instructed CBRE to find a buyer at a guide price of around €25M, representing a 70% discount.

Developed in the early 1990s as one of the first buildings in Dublin’s then fledgling financial services district, the 92K SF office block hit a peak valuation of some €100M in 2007. But in 2013, it was sold by a group of private investors to a fund controlled by Credit Suisse for €35M. 

AXA and BCP had originally intended to attract new occupiers through a €50M redevelopment and upgrade of its sustainability rating, increasing it from seven storeys to 10, and refitted using Passivhaus standards. CBRE is advertising rents at just over €45 per SF.

Beckett Building, East Wall Road 

The long-awaited sale of the Beckett Building on Dublin’s East Wall Road kicked off in May, with agent Colliers guiding at €35M for the property on behalf of receiver Grant Thornton. The price represents a reduction of 56% on the €80M figure mooted when CBRE first offered the building for sale in January 2023, and an even steeper discount of 65% on the €101M South Korean-based Kookmin Bank paid when it acquired it from Comer Group in 2018.

The Comer Group spent around €30M on the 188K SF, six-floor building’s fit-out before letting it to Facebook —now Meta — which has since vacated but remains responsible for its annual €5.75M rent until the lease break option on 31 July 2027. The current rent equates to €29.30 per SF.

“Assuming Meta exercise their break option in July 2027, we believe the scale and configuration of the building lends itself to a low intervention change of use or a splitting of the floor plates,” Colliers Divisional Director Richard Bielenberg said in a statement.

3 And 5 Custom House Plaza, IFSC

Just over 10 years after its precursor, Standard Life, acquired numbers 3 and 5 Custom House Plaza in the IFSC, investor Aberdeen is looking to dispose of both. The properties, which have seen substantial investment under Aberdeen’s ownership, are being offered to the market by TWM at a guide price of €24M, the same amount Standard Life paid in 2015.

Located next to Connolly Station, the wider Custom House Plaza development comprises six office buildings, and 3 and 5 Custom House Plaza have a total net internal area of 60.6K SF. The Health Service Executive’s purchase last year of the neighbouring 2 Custom House Plaza for use as the Mater Hospital’s new ophthalmology unit indicates the building’s potential value as a medical facility.

In an unrelated deal, last year the HSE paid just over €50M for U.S. property giant Starwood’s remaining interests at Elmpark Green, a vast office and residential scheme developed in 2007 for €550M. The price paid by the HSE represented a significant discount on the €190M Starwood paid in 2016 to acquire the current portfolio and two other assets, which it later sold. The 184K SF Seamark building, which had a €45M refurbishment in 2018, looks ripe for conversion to a medical facility.

25 North Wall Quay

A project that has completed is IPUT’s renovation and reopening of the A&L Goodbody HQ close to the IFSC, although the deal had a number of advantages. A&L relocated into one of IPUT’s other buildings while it was being refurbished, and the lease was agreed prior to construction, while IPUT already owned 25 North Wall Quay.

As part of the refurbishment, the building size has increased 36% to 155K SF, adding two new floors, rooftop landscaped terraces, a new atrium and a client floor at penthouse level, plus EV charging stations, 200 bicycle spaces, 200 lockers, a fitness room and changing facilities.

Independent House, Middle Abbey Street

Just over a year after purchase, Summix Capital won planning permission this June to convert Independent House into purpose-built student accommodation. The office had been vacant for over two decades, and Summix Capital is planning a nine-storey PBSA block on the former site of The Irish Independent newspaper’s headquarters on Middle Abbey Street.

Comprising 316 student bedrooms, it will be delivered via 42 clusters ranging from five-bed spaces to nine-bed spaces at 87 to 93 Middle Abbey Street, known collectively as Independent House. The scheme will involve the construction of a partly nine-storey over-basement building connecting to the retained structures.