€26m+ Opera Lane shops for sale as Cork City retail hits a higher note

Cork City centre retail recovery is picking up pace post-pandemic

Thu, 02 Mar, 2023 - 00:12

Property Editor Tommy Barker reports

A RESURGENCE in Cork City centre’s retail sector is being claimed , with the purpose-built retail street Opera Lane, home to a strong mix of international brands, coming up for sale. It has a €2.71m rent roll, and a price tag of €26.75m for its private investor owners.

Set at what agents Cushman & Wakefield say is the city’s retail nexus, Opera Lane was developed in the mid-2000s by the late Owen O’Callaghan, after a costly site assembly that included the former offices and printing press of the Irish Examiner and Johnson & Perrott, and included 20 multi-level ‘large box’ shops let to leading high-street retailers and 61 overhead apartments.

The €26.75m sale, via agents Cushman & Wakefield, includes the majority of the shops, and is headed up by H&M’s only Munster store, at a rent of €950,000, but recently regeared with an extended commitment and a rent to include a percentage of turnover, for December 2023.

Opera Lane, seen from Patrick Street, Cork, with Crawford Gallery at the Emmet Place end, The 300-year old city centre gallery next to the Opera House is due a major extension

The investment sale excludes Nos 12-14 (including Top Shop — not currently trading — Office Shoes and River Island), which were sold for the Whitaker family back in 2018 to financiers State Street, for a reported €25m.

The same C&W agents, last month, sold Douglas Village Shopping Centre for €23m, and also have Debenhams Cork —the city’s biggest empty store and in a pivotal position — currently under advanced negotiation as a development/investor proposition, having launched it with a €20m price tag last year.

Under advanced negotiation: Debenhams, Patrick St

former SuperValu (ex-Roches Stores) at Merchants Quay SC, behind Debenhams, is also being prepared for imminent sale, via agents Savills.

The Opera Lane investment includes key retailers H&M, Next, Specsavers, Skechers, New Look, Therapie and Starbucks: H&M has also just committed to a regeared lease on its store, with a break now put out to 2027 and linked to turnover. It offers a return of 9.2% on the €26.75m (exc VAT) sale price, with a total rent roll of €2.71m, and with H&M accounting for 35% of income. The shops on offer include all on the western side of Opera Lane, and from New Look to Select+ on ‘Pana’ at the eastern side.

“The Patrick St revival is very much happening, with new retail entries and the imminent redevelopment of Penney’s, and the former Debenhams properties,” said Peter O’Flynn, MD of Cushman & Wakefield’s Cork office, namechecking new arrivals such as North Face, Dune, Dubray, a relocated Easons, and Flannels (now in store fit-out).

In addition, Krispy Kreme is also due to open in the former Porters newsagency on Patrick St in April and Mango is also taking up a prime position opposite Brown Thomas, at the former Quills.

“Patrick St is currently experiencing a revival in retail fortunes. This is due to continue, with the ongoing sale of the former Debenhams Store, which is at an advanced stage,” said Mr O’Flynn.

According to Cushman & Wakefield “this resurgence in the market is a huge positive for Opera Lane and with more retailers now starting to show interest in Cork, Opera Lane provides an excellent opportunity for investors to take advantage of this positive movement. Opera Lane has also seen the seen the effects of the positive sentiment, with the re-gearing of the H & M lease, demonstrating their commitment to the Cork market along with active interest in the vacant units.”

The C&W sales prospectus for Opera Lane which went live today said sale terms had been agreed at the start of 2023 for Debenhams, for a mixed-use development, with retail at the front.

“The general feeling within the industry is that city centre retailing is being revived. A similar transformation has taken place in Dublin’s Grafton Street over the last 18 months, with most of the vacant units now back in frontline retail use,” he asserted.

Cork’s Opera Lane was the largest single redevelopment in the city centre since Merchants Quay in the 1989s, also done by O’Callaghan Properties (OCP).

After doing a deal with Irish property investors IPUT, OCP sold out its interest in the majority of the shop units and 59 of the 61 apartments to a private investor/group funded by Deutsche Bank, for an undisclosed sum.

The luxury ‘living over the shops’ apartments are being steadily sold individually, at prices up to €580,000 for the top ones. The sizeable Top Shop unit, near the Opera House and Crawford Art Gallery, which was sold to State Street five years ago, is no longer trading, but it’s understood the lease on it is still active.

Karl Stewart, of C&W, said their latest Cork retail investment sale “represents a unique opportunity to investors to acquire a majority share of Cork’s premier retail destination, located in the heart of Cork City centre. The opportunity provides a strong rental return to a mix of international operators, with scope for further rental return, with turnover top-ups on a number of the stores, which will benefit from the improving foot traffic in Cork City centre.