Cork retail centre is this year’s record deal
In the biggest commercial deal of the year, a confidentiality clause precludes any parties involved in the sale divulging the identity of the new owners or the purchase price.
Following strong international, UK and Irish interest in the 168,000 square foot centre, an investment group, which includes a Northern Irish and a Cork-based investor, are set to finalise a deal for a sum in excess of €110 million.
The centre, which now features one of the biggest supermarkets outside of Dublin, was built 25 years ago by Clayton Love Jnr and acquired two years ago by Tesco Ireland from the Irish Pension Fund Property Unit Trust for €83m.
Tesco has since invested at least €25m in refurbishing the centre and building their 60,000 square foot supermarket, for which planning was granted before the current cap on retail floor space. It would have cost in the region of €18m, according to sources.
Tesco will retain the freehold ownership of its supermarket when the sale is completed. Roches Stores, the second major anchor tenant which also sub-lets to SuperValu, will retain a long lease.
Selling agents DTZ Sherry FitzGerald head of investment Seán O’Neill confirmed yesterday that 12 potential bidders had shown an interest in the major retail complex, in the western suburbs of Cork city.
The newly-completed 24-hour Tesco store is a centrepiece of the 168,000 sq ft centre, on a 17.5 acre site adjacent to Cork University Hospital. The old Tesco unit was converted into 11 new units, larger than the current average 100 sq metre standard sizes.
The site also features 1,240 car parking spaces.
In the major revamp of the centre by Tesco, the number of retail units rose to 67. Rental rates are pitched more competitively than at the Mahon Point retail development, opening next spring.
The annual rental income is reckoned at €6.5m per annum and the sale should realise a yield of 5.5 to 5.75% for the investors.
Tesco, meanwhile, is still progressing with plans to develop a motor service station on the site. Cork County Council approved the plan but a number of service stations in the area have lodged objections with An Bord Pleanála.
Situated in Bishopstown, the Wilton complex is easily accessible from the N71 South Link dual carriageway, which will shortly connect with the Ballincollig bypass, part of another national route, the Cork-Killarney N25.
