Douglas Village Shopping Centre has been sold for more than €23m to the Tom Coughlan-led property investment firm Urban Green Private.
Mr Coughlan’s company won out over seven interested parties all of whom either bid at or above the original asking price of €21m.
While the firm’s portfolio includes three other shopping centres, Douglas Village, on a six-acre prime site in one of Cork City’s more affluent suburbs, is its biggest asset. The centre has an annual rental income of €2.4m.
It’s understood funding for the purchase is a combination of Urban Green Private’s own resources and funded debt.
Commercial real estate firm Cushman & Wakefield who oversaw the deal said there was “good strong demand”, mostly from private Irish buyers and that would-be purchasers had a good cash profile.
Cushman & Wakefield managing director Peter O’Flynn said they were “very pleased” with the sale of the asset.
“From our point of view, it sold for 10% over the original asking,” he said.
Mr O’Flynn said bidders were attracted by the excellent condition of the shopping centre, which underwent a €30m revamp following a major fire in August 2019, which ripped through the multistorey car park and caused substantial structural damage to a portion of the building.
They were also attracted by the promise of a very good initial yield, Mr O’Flynn said, of “between 9% and 10%”.
“Anything in high single digit figures is a good return for a building and this one is in good condition,” Mr O’Flynn said.
The agent, whose Dublin-based colleague Karl Stewart was also involved in the deal, said he would expect Urban Green Private to add value to the centre, as they already owned three other shopping centres, where they had succeeded in bringing in new tenants.
The firm’s portfolio includes Castletroy Shopping Centre in Limerick which it bought in a Nama sale for €3.4m in 2016; Shannon Town Centre which it bought in 2021 for €6m and Bridgewater Shopping Centre in Arklow, Co Wicklow, also purchased in 2021 for a reported €18m.
Mr O’Flynn said they were “all value buys” and that Urban Green Private had the nous to give Douglas Village a new lease of life. He said they were already receiving enquiries from potential new tenants — a half dozen or so of the centre’s 40 units have lain idle since the fire.
Among the existing tenants at the 230,000 sq ft Douglas Village centre, of which 80,000 sq ft is owned by anchor tenant Tesco, are heavy hitters M&S and TK Maax. The centre also has a 1,000-space multilevel carpark.
It was developed by the Love family with open malls in 1971 and later covered over and sold, but bought back again by the Love family’s Shipton Group who redeveloped it in 2007 at a reported cost of €80m.
Mr Coughlan, who drove the deal to buy the centre, is also behind the highly successful Marina Market on Cork City’s Monahan Road whose future is uncertain after planners turned down a request for retention and expansion. He was also the former owner of Cork City Football Club.
The Douglas Village Shopping Centre is Ireland’s second oldest shopping centre. It has been a key part of Cork’s suburban growth but has not been without its challenges.
In 2012 a severe flash flood devastated the centre and caused a temporary closure and in 2019, fire ripped through its multistorey carpark after a parked car burst into flames.
The fire caused an estimated €30m worth of damage and loss of trading income. The centre re-opened in late 2020, with the exception of a handful of units, but Covid-19 caused further disruption.