Two major property investment deals worth €60m combined completed in Cork city

Oz retailer Harvey Norman buys retail element of O'Flynn Group-developed Eastgate scheme in Cork for close to €24m as an investment, while a fund spends €114,000 per student bed space in c €40m deal by Munster Technological University off city's Model Farm Road

Go, Harvey, go: Harvey Norman has bought as an investment the retail park element at Eastgate, Little Island, Cork for an unconfirmed €24m from developer/owners the O'Flynn Group. Picture: Eddie O'Hare

TWO major property investment deals, worth over €60m combined, have just been secured in Cork, at Eastgate Retail Park, which has been sold to Australian retailer and park tenant Harvey Norman for c €24m, along with a 342-bed student complex in the western suburbs by MTU, for up to €40m.

The Eastgate deal is Harvey Norman’s first property investment in Ireland, where it operates at 16 locations to date, and is also notable as it sees the online and store-based retailer invest in retail locations here with co-anchors/other tenants.

Harvey Norman has occupied 48,000 sq ft at Cork’s Eastgate retail park, where the main anchor is The Range in a 60,000 sq ft unit, who arrived five years ago into the largest unit which, at one stage, competing with Mahon Point to land Cork’s first B&Q store, which now is in Mahon. Other retail occupiers who are now tenants of Harvey Norman’s property wing in Cork include EZ Living, Tubs and Tiles, Airtastic entertainment centre, Jysk, and Tile Haven.

The Range is Eastgate Retail Park's anchor tenant, bookending new investor owner and co-tenant Harvey Norman in the 175,000 sq ft development on 35 acres of the wider 120 acre mixed use park developed by the O'Flynn Group. Picture: Eddie O'Hare

The park comprises some 175,000 sq ft of fully occupied retail, which is on 35 acres of the overall 120-acre Eastgate development, delivered by the O’Flynn Group over the past 20-25 years.

The mixed-use Eastgate development, just east of the Jack Lynch Tunnel and near Little Island, also has an 800,000 sq ft business park, motor mall, and retail village with local services. No other elements of the scheme were involved in this recently concluded investment deal.

Both O’Flynn Group and Harvey Norman have declined to comment on the off-market investment deal, with local sources saying negotiations with another third-party investor had been in train but didn’t progress and Harvey Norman then came to the fore.

Agent Michele McGarry of Colliers acted in the Eastgate deal for Harvey Norman Ireland but would not comment on her client’s behalf, while other sources say the rent roll may have been in the order of €1.6m, showing a c6% return. However, that unconfirmed ballpark figure/return alters as Harvey Norman are now both occupiers  and owners.

Cushman & Wakefield act in general on sales and lettings for the O’Flynn Group, but this deal may have been negotiated in-house by O’Flynn Group, and who also declined to comment.

A sale price of €24m for a retail park investment is circulating in investment circles, without specifically identifying the property as being at Eastgate.

Our records show O’Flynn bought the land for the visionary Eastgate scheme c 25 years ago from then land owner Billy Ellis for €30/€40,000 per acre or c€4m, excluding the period house which later formed part of the entirely separate Radisson Hotel beside the N25.

The publicly quoted Australian company has a business model that sees it invest in property as well as its main trade retail, in Australia, New Zealand, Slovenia, and now in Ireland.

It has a portfolio worth Aus$3.4bn (€2.34bn). It had $9.7bn, or €6.85bn in sales in 2021, according to its trading update, up from 2020.

c €40m deal put to bed at 340-bed student accommodation development Melbourn Point, by the MTU campus on Cork's Melbourn Road

• Meanwhile, on the other side of Cork city, an even larger investment deal worth an unconfirmed €37m-€40m has been secured, for a fully-completed and occupied 340-bed student accommodation development, Melbourn Point, next to the main campus of Munster Technological University (MTU), first let in September 2021.

The sale equates to an average of c €114,000 for each student (single) bed, which rent for €230-€250 per week, according to the website of Yugo (preiously Uninest) who also manage Melbourn House, Amnis House on Western Rd, and Lee Point on the former Beamish & Crawford site  on South Main St.

The rates across Yugo’s three Cork centres are c €1,000 per month per bed, with apartments having three to eight en-suite bedrooms each.

Melbourn Point's rooms earn €1,000 per month and the investment deal sees them valued at c €114,000 per bed.

The development, with 62 apartments and 340 beds, was built on the former O’Mahony Packaging site behind Cork County Council’s motor tax office, with planning granted to a company Montesa Ltd, and later acquired and built by Cork developers CitiStudent Ltd, separate to active house-builders Citidwell Homes.

The purchaser/fund has not yet been identified.