Barclays Signs a Lease Agreement for Office Space in Dublin

Barclays, a British multinational bank and financial services company, has signed a 20-year lease agreement, with commercial property firm Green REIT, to rent over half of its flagship office development at One Molesworth St. in Dublin city center, as the bank prepares to expand its operations in the Irish capital to cope with the impact of Britain’s exit from the European Union.

Green REIT, an Irish real estate development trust, said it had an agreement to let two-and-a-half floors covering 3,437 square meters to the British lender in central Dublin, adjacent to the main shopping area of Grafton Street. The bank will pay an annual rent of 2.35 million euro or 670 euro per square meter to Green REIT, with Barclays entitled to a market level rent free period at the beginning of the lease. In addition, Barclays has an option to break the lease at the end of the year 12.

The bank’s new offices will be capable of accommodating more than 400 workers.

Barclays has already a licensed entity in Dublin, Barclays Bank Ireland, employing around 100 people, which has a license to conduct primarily corporate banking activities. It is located at Park Place on Hatch Street where it rents over 1,393 square meter, or 15,000 square feet. It intends to extend the range of that license so it can continue serving clients once Britain leaves the bloc.

Last month, the UK bank said that it was in dialogue with Irish regulators about extending its office in Dublin.

“We are delighted to have secured our first office letting at One Molesworth Street, our flagship building at the heart of Dublin’s central business district, and to have secured such a high caliber tenant as Barclays,” said Paul Culhane, Development Director of Green Property REIT Ventures.

The redevelopment of One Molesworth St is expected to be completed some time in the last three months of the year,  but the exact date when Barclays will take possession of its leased space remains unknown. Moreover, One Molesworth St looks set to bring in an overall rental income of around 5 million euro for Green REIT and to trigger a higher than expected capital value because of the tenant line up, the impressive finish planned for the building and its prime location opposite Hibernian Way.

“We look forward to leasing up the balance of the office space and our retail space, where discussions are ongoing with prospective tenants on both fronts,” Culhane added.

Colm Lauder, a Goodboy analyst, noted that the agreed lease terms were considerably ahead of earlier estimates.

“We expect the One Molesworth scheme could add 34 million euro in profits as it completed, ahead of earlier expectations that this development would deliver 29 million euro,” he added.

Dublin and Frankfurt are emerging as the preferred choices so far for banks to relocate some of their London operations as Britain prepares to leave the EU in March 2019.

Bank of America Merill Lynch, which is one of Green REIT’s current tenants in Dublin, has picked the Irish city to be its new EU headquarters.

JP Morgan Chase agreed in May to buy a building with room for 1,000 staff in Dublin’s docklands area.

The U.S. bank has said it will use Frankfurt as the legal headquarters of its EU operations after Brexit, but jobs will likely be spread across the alliance with someone in Dublin.

Meanwhile, by 3:25 PM GMT+1, Barclays PLC traded 0.10%, or 0.21, to 206.95 GBX. It opened in 207 GBX, with a session high of 208 GBX, and a session low of 205.62 GBX. Its market capitalization was 35.25 billion GBX, with a P/E ratio of 20.04.

Want to get updated on the latest news about the stock market? Subscribe now at Trade12. We will let you know the latest happenings about forex, commodities and economies.