The proposed sale of the Clarion Hotel for over €30m will concentrate investors’ minds, with a 7.6% return on a blue-chip four-star hotel acquisition, while prime retail boulevard St Patrick’s Street is firmly poised for occupier recovery and rebalancing.
The grant of planning for Cleary Developments €50m redevelopment of the former Capitol cinema site with St Patrick’s Street profile for retail and offices — and food innovation centre uses next to the English Market on Grand Parade — brings a large quality building footprint to possible occupiers like Zara and House of Fraser, as well as possibly to whoever takes over Arnott’s in Dublin.
Estate agents Savills say the Capitol site “will create a new iconic and timeless landmark for Cork, breathing much welcomed new life to the western side of the city centre”. As letting agents for the scheme, PeterO’Meara and Leigh Hegarty of Savills say this week’s City Council planning grant “is a fantastic and rare opportunity — and likely to be the last for some time — for large-scale retailers to enter or relocate to Cork’s prime thoroughfare”. Depending on configuration, there could be scope for one large (up to 100,000sq ft) retailer, or several mid-sized unit retailers taking up to 40,000sq ft within the scheme. It may well appeal to the likes of Zara and Zara Home, who typically take city stores of 30,000 to 40,00sq ft: Zara has had difficulty finding a Cork foothold.
Savills’ Cork director Peter O’Meara said St Patrick’s Street was now poised for a significant rebalancing and new energy: Planning is granted for a reordering of the Merchants Quay centre and facade changes, where this end of St Patrick’s Street is book-ended by Marks and Spencers, Debenhams and Brown Thomas, with Dunnes new superstore facing Penneys, and with Penneys set to seek planning permision very shortly for €60m upgrade and extension, aiming to double to 100,000 sq ft after a two-year buying spree via Savills and Lisney. Penneys have acquired most of the block between St Patrick’s Street, Cook St and Oliver Plunkett. Having failed to agree multimillion-euro terms with the Treacy family who own the Jon Clare boutique on Oliver Plunkett St, it’s expected Penneys will build around that unit, likely to developed on a front-and-back basis rather than completely vacate during an expected two year build and fit-out period. The company is expected to brief city traders later in August on their plans.
According to Savills, up to a half dozen high-profile deals are in train on St Patrick’s Street and at Opera Lane, whilst SuperDry are about to start fit-out at the former Moderne, and Holland & Barratt and Pandora are due to start fitting out new stores in the coming days on St Patrick’s Street. New store openings close by include Hairspray, Skechers and Starbucks on Emmet Place and Princes St, while buildings such as the former Quills, and the Body Shop, have been bought by Clarendon Properties and Davy Private. “Patrick Street has witnessed strong activity in recent months, with a number of new high profile lettings as well as additional acquisitions by existing investors, set to create some additional opportunities for retailers, albeit on a significantly smaller scale,” says Leigh Hegarty of Savills.
Meanwhile Tom Barrett and Denis O’Donoghue of Savills, jointly with Dan O’Connor of JLL, bring the Clarion Hotel to market, guiding excess 30 million. The 190-bed hotel has 25 years left on a lease to Merzolt Ltd, at rent of €2.4m pa, a 7.66% net initial return.
The very successful hotel, developed by Howard Holdings, is operated by Frankie Whelehen of Choice Hotels Group, who can expect consortium interest to come knocking on his door for guidance.
: Savills 021 4271371, JLL 01 6731600