€100m invested across Cork City

OVER €100m has been invested off-market, across three low-key retail deals, in the heart of Cork City, at Opera Lane, Merchants Quay/Marks & Spencers Shopping Centre, and St Patrick’s St.

Opera Lane.

Most significantly, apart from the sheer size of the three deals, the buyer profile shows a marked surge in international investor interest and activity in Cork investment opportunities.

Sold off-market, and understood to have made over €30m, is the two-storey Marks & Spencers investment at Merchants Quay Shopping Centre on St Patrick St.

It has been bought by Real IS, an international fund which last year bought the Capital development on Cork’s Grand Parade from JCD for €58m. This is its second major city-centre purchase.

Vendor of the 73,000 sq ft Marks & Spencers property is US fund Kennedy Wilson, and purchaser Real IS spokesperson Jochen Shenk said that “along with its excellent location in the centre of Cork, the property is distinguished through Marks & Spencer (Ireland), a tenant with a high credit rating and a long-term lease”.

The M&S space is held since 1987, with 70 years to run, and M&S also has a second Cork store, in Douglas Village Shopping Centre.

Real IS was advised by the commercial property firm HWBC in Dublin, and by the law firm Eversheds.

Sources say the M&S investment deal is worth c€30m, with rent roll of €1.6m showing a 5.5% return, but these figures were not addressed by Real IS or by HWBC.

Real IS fund pays Kennedy Wilson c €30m for Marks and Spencers outlet in Cork

Alongside, and separately sold for about €40m by a company associated with the Roche family of Roches Stores fame, is the 720-space Merchants Quay car park, and the c40,000 sq ft supermarket investment at the just revamped Caulfield SuperValu supermarket, originally the Roches Stores department store supermarket section.

It was sold by Colliers International, Dublin, for a company associated with Richard Roche. Colliers Dublin last year also put the Debenhams store on St Patrick’s Street to the market for the Roche family, it is understood, guiding €70m plus, and while interest is active, it has yet to transact.

Buyers of the car park and supermarket investment was Dutch-based Orange Investment Managers, partnered with Catella Real Estate, with a c€500,000-a-year rent roll from the supermarket.

That partnership, established a year ago, specialises in European car park investments, and expects to grow to €250m by the end of 2018.

It is understood that Colliers had a very strong level of Irish and international interest in lots and as an entire. It is notable that Orange/Catella bought the supermarket investment along with the car park as one lot.

“We are proud to announce this acquisition. The car park has a strong track record with stable income, it serves the Merchant Quay Shopping Center, inner-city retail, the nearby leisure and night life, offices, hotels,” said Michiel Gerritsen, director at Orange Investment Managers.

“Besides this acquisition we expect to add more interesting investments to our clients’ portfolios in the short term which will increase diversification for the different funds even further. We want to build a broadly diversified portfolio of lucrative parking garages all over Europe for our investors, with a balanced risk-reward profile.”

Merchants Quay multistorey car park and supermarket sold by Roche family for €40m

The Merchants Quay Shopping Centre was developed by Owen O’Callaghan, and sections of it have changed hands at various times in the past.

Meanwhile, three shop units at the more recently developed O’Callaghan Properties’ Opera Lane have just been sold, for an unconfirmed €25m, to a major fund and investment and asset managers State Street.

Sold in one lot off-market in a pre-Christmas deal by Isobel O’Regan of Savills, Cork, were numbers 12-14 Opera Lane, owned by the Whitaker family’s Johnson & Perrott Motor Group, a company with roots dating back over 200 years, initiall as a carriage builder on Emmet Place.

Johnson & Perott did the first significant site sale deal with OCP, which allowed the rest of the city-centre game-changing site assembly for Opera Lane to proceed, and J&P then relocated to Mahon Point, as did the printing presses for the Irish Examiner after the publishers Academy Street and Half Moon Street Properties were also bought by OCP.

Tenants at 12-14 Opera Lane are Topshop, Office, and River Island, “all of which have established and long-term letting contracts. Johnson & Perrott will retain its ownership of 11 Opera Lane, part of the retail outlet occupied by New Look, which was not affected by the sale process,” said J&P chief executive Mark Whitaker.

There’s a rent roll of €1.4m from the three tenants, and while the sale price isn’t confirmed, sources indicate it’s in the region of €25m, a return of close to 5.75%.

The private disposal “is part of a new strategic direction for Johnson & Perrott which will see a further significant investment in their core businesses of premium car sales, fleet management, and vehicle rental”, Mr Whitaker said.

“As these stores are on the site of the original motor dealership where we conducted business since 1810, the decision to sell was an emotionally difficult one for the shareholding family.

"However, we are very pleased to have completed this key part of our strategy for the coming three years and we look forward to investing the proceeds of the sale to drive further growth in each of our trading divisions.”

Paying tribute to the late Owen O’Callaghan’s retail development acumen, Mr Whitaker said “Opera Lane has brought new life and activity to the city centre and we are very proud of our small part in achieving this.

The company has a fleet management business as well as car sales, and had a turnover of €88m in 2016: it holds franchises such as Honda, Jaguar, Kia, Land Rover, Peugeot, Opel, Seat, and Volvo.

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