Aldi unit hard to discount as Ballincollig investment

A retail unit acquired in 1999 as the second ever Aldi Irish store is up for sale by tender as an investment: it’s the anchor tenant in the Westside Retail Park, Ballincollig in Cork, on a lease set to run until 2024.

Aldi unit hard to discount as Ballincollig investment

The Aldi store generates an annual rent of €385,000, and agents Eoin Ryan and Peter O’Flynn of DTZ Sherry FitzGerald give a guide price of €2.75 million, indicating a net initial yield of 13.4%. Considerable interest is expected.

Now with over 112 Irish stores (and with an Aldi currently being fitted out in the ground floor of the Elysian tower in Cork city,) this investment offer is one of Aldi’s earliest here. The German retaileropened three Irish stores back in 1999, with Ballincollig early in its sights and site acquisition: it was subsequently joined by a second Aldi store in Ballincollig, by a Lidl, as well as a Dunnes Stores in the redeveloped Ballincollig Town Centre - next door to where a giant Tesco Extra opens tomorrow, also on the former barracks site redeveloped by O’Flynn Constructions.

Ballincollig also has two SuperValu stores among its retail offer; other new arrivals to the growing satellite town are Boots, on Main Street, and McDonalds, the latter due to open next month by the town’s second Aldi.

Offering the Westside Retail Park’s Aldi, DTZ say it’s a prime retail investment, attractive to a wide range of purchaser types due to the strong rent and the established retailing location on offer. It comes in time for buyers to avail of the CGT exemption deadline expiry at year’s end, as it is offered via tender.

And, DTZ say, there’s been an increase in the level of activity in the Cork investment market in the first half of 2014, with sales such as the €4m paid for a McDonalds outlet on Winthrop Street, a Tesco Express and adjoining pharmacy in Douglas for c €1.5m, and a Bank of Ireland branch in Wilton, Cork, to a Norwegian investor for c €3m.

“Demand has strengthened, especially for retail investments,” comments Eoin Ryan of DTZ Sherry FitzGerald. Previous buyers for Aldi stores have included an Israeli investor Igal Ahouvi, who bought in Henry Street and Sandymount in a Fleming Construction scheme, paying €7.7m for the Boulvard Sandymount investment, with over €600,000 in rent.

In contrast, the Ballincollig Aldi has a rent of €385k, and anchors a scheme of six units in the Westside Retail Park, and is essentially an open plan building/warehouse, with large retail unit, staff accommodation and a large store on the western end, with single dock leveller. The entire building is leased to Aldi until 2024, with provision in the lease for yearly upward-only rent reviews.

Anticipating good demand, DTZ director Peter O’Flynn says “it’s an enviable covenant, on a long, unexpired lease term.”

Strong competition for well-covenanted, quality retail investments in recent months, coupled with the limited volume of quality product for sale, has led to yield contraction and higher pricing, add the agents.

Details: DTZ Sherry FitzGerald 021-4275454

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