Global real estate investment company Kennedy Wilson has sold Baggot Plaza, a Grade A office building located in Dublin’s city center, for $165.4 million to Deka Immobilien, reflecting a net initial yield of 4%.
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%.
“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,” said Ali Rohan, Head of Ireland, Kennedy Wilson Europe.