Hibernia REIT has agreed terms with FBD Holdings for the early surrender of FBD’s leasehold interest in Guild House, International Financial Services Centre, Dublin, for a cash payment to Hibernia of €8.8m (£6.3m).
FBD holds a full repairing and insuring lease of the 73,000 sq ft of Guild House at an annual rent of €2.9m. This lease expires at the end of March 2025, with a break option at the end of March 2017.
FBD is not in occupation and has sub-let the entire building to a number of sub-tenants. All the sub-leases expire by Q1 2017, other than that of BNY Mellon which occupies 16,000 sq ft of the first floor on a lease running to March 2025.
The surrender payment of €8.8m includes a break penalty equal to one year’s rent, €2.4m to cover the expected shortfall between the rents Hibernia will receive from the sub-tenants to the date of the break option in March 2017 and what it would have received from FBD, and a sum for dilapidations.
Kevin Nowlan, chief executive officer of WK Nowlan REIT Management, the investment manager, said: “This is good business for Hibernia: with all the sub-tenants in occupation on sub-leases expiring by Q1 2017, other than BNY Mellon, this transaction enhances our options for the building and also for the adjoining Commerzbank House, which we are currently refurbishing.”
