CMETB to ‘look at options’ over sale of office building

The executive of Cavan and Monaghan Education and Training Board (CMETB) has told its members they will consider all “options” regarding the sale concerning their offices at Nos 2-6 Church View Square in Cavan Town.

Tied into a 35-year upwards-only rental lease on the office properties, with no break clause included, the current cost per annum facing the ETB is €289,050, including VAT.
The five interconnecting office units at Church Square was listed for sale as a commercial investment by property agent JLL last month.
At the board's meeting last week, held at Virginia College, members were told that CMETB, following concerns raised, consulted solicitors firm Mason, Hayes and Curran with a view to exploring the legalities of the lease. However, the legal advice served only to confirm the lease agreement was legally sound.
If was further confirmed to members at the meeting that the executive followed this up by directly meeting the owners of Nos 2-6 Church View Square, listed in documents obtained by The Anglo-Celt under Freedom of Information, as Cormac Dunne and Hugh Lennon. The lease was signed towards the end of November 2009 by then Vocational Education Committee chairperson and Fine Gael councillor Madeleine Argue, and CEO Colm McEvoy, and concludes in 2044.
However, subsequent to the executive's meeting with Mssrs Dunne and Lennon, the properties were placed up for sale.
CMETB chief executive John Kearney informed the meeting that he had confirmed the development to the Department, and the local education and training body were “looking at options”.

Duration

Monaghan County Councillor PJ O'Hanlon praised the efforts of the executive in examining the lease, as requested by members previously, acknowledging: “You went through the proper channels, as requested by us but you had no joy. You can only do what you can do.”
Having been a fiercely critical of the lengthy leases entered into by the former Cavan VEC prior to combining with that of Monaghan to form CMETB, he requested that the executive never enter into a rental agreement of similar duration again.
“I hope and pray we never go down a road like this again,” he said, suggesting that among the potential interested parties in the Church Square properties should be CMETB given their retained interest.

Guide price

It was previously suggested to CMETB's executive that annual rent being paid for one unit under the current lease averages at €57,800, while units for sale in the same area had at the time a guide price nearer €80,000.
The properties at Church View are used by CMETB for administrative purposes. The tenancy agreement is worth in excess of €10m in total over the full-term of the 35-year full repairing and insuring (FRI) lease.
The property includes 27 car parking spaces, which are included, with the €3m guide price representing an initial yield of 7.2% after standard purchaser's costs of 8.46%.
Jacqueline Fitzpatrick of JLL described the sale, with 26-years lease unexpired, no break options and upward-only rent reviews to a statutory authority, as providing an investor with “long-term secure income in a town centre location at an attractive yield.”
The six office units are valued by JLL at a price which dwarfs that paid recently by a Dublin-based investment fund in purchasing the 2.42 acre block of retail and development space in Cavan Town centre, including sites facing onto Main Street, Thomas Ashe Street and Farnham Street.