Rents of €8.8m lure in Midlands shops disposal

SIX shopping centres, including the largest in the Midlands, have been put up for sale in one lot, guiding at €115 million. The mix, in one lot only and called the Cornerstone Portfolio, has almost 170 shop units plus 150 apartments, and 670,00 sq ft of retail in all.

Rents of €8.8m lure in Midlands shops disposal

Offering a return in excess of 7%, it is being offered for receivers Paul McCann and Stephen Tennant of Grant Thornton, and includes the landmark 2007-built Athlone Town Centre (anchored by Marks and Spencer and TK Maxx), which has 210,000 sq ft of retail, and 66 tenants.

Critically that Athlone package also includes 150 one/two and three-bed apartments called City Quarter as a multi-let opportunity, as well as 1,200 car parking spaces. Residential rental levels are said to be high, with a number of corporate lets.

A similar-sized retail offer in the portfolio is Kilkenny’s McDonagh Junction, also with 210,000 sq ft retail (anchored by Dunnes) and completed in 2007. This offer is part 50:50 owned and part 100% owned, and is set right by the train station and GAA stadium in Kilkenny city centre.

Cornerstone Portfolio selling agents (acting for AIB bank and the receivers) are Jones Lang LaSalle, who note there’s a combined income of €8.8 million, holding the prospect of a return in excess of 7% for investors/buyers.

Overall, the Cornerstone Portfolio has a total of six retail centres in six different counties, offering a good geographical spread, mostly outside of Dublin.

They include the compact Orwell Shopping Centre in Dublin’s suburban Templeogue (anchored by SuperValu); Tipp Town Shopping Centre in Tipperary and Gorey Shopping Centre, Wexford — both of which are anchored by Dunnes, who own their own units) and Galway’s Westside Shopping Centre, as well as Athlone, and the majority share in Kilkenny’s McDonagh Junction, with Davy as co-owner.

JLL’s John Moran says the portfolio’s rent roll of €8.8m-plus,after deducting non-recoverable and void costs, has “a significant proportion of which is let to institutional tenants with an overall lease term certain of over 10 years on the retail element.”

Given there’s almost 170 shops, 150 apartments, 3,500 parking space and 670,000 sq ft of retail in all “these diverse assets represent a major opportunity to obtain a significant stake and exposure to the fast-recovering Irish retail market,” says Mr Moran.

It will, he says, appeal to Irish and overseas investors “seeking to capitalise on Ireland’s recovery story, supported by strong initial yields and the potential for new lettings and rental growth.”

The majority of value is in the Athlone Town Centre, once valued at €300m, now likely to carry a value closer to €60m. Rent roll at Athlone is €4.8m, which will rise once TK Maxx opens in 2015, paying €200k plus a percentage of turnover.

Overall value at peak on the mix which is now guiding €115m was estimated at over €400m.

Least valuable of the six is the Tipp Town Centre, anchored by Dunnes with c €170k in rent from the other units sharing 18,500 sq ft, and reckoned to be worth around €2m.

Details: JLL 01-6731600

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