Sale of Merchants Quay units could fetch €12.5m

The investment sale of 29 shop units in the Merchants Quay Shopping Centre, on Cork City’s Patrick Street, is expected to make more than €12.5 million, with buying interest likely to come from a range of skilled retail asset investors.

The sale of the dozens of units and central mall excludes the four anchor tenants linked into the centre, and does not include the sizeable extra footprints occupied by Dunnes Stores, Debenhams, Marks and Spencer and SuperValu or the development’s multi-storey car-park.

The parking amenity and strength of the four anchors underpin the centre’s viability and footfall, which tops eight million a year; current rental income is €1.47m.

The sale comes at a time when the majority of Ireland’s retail space has changed hands since the economic slump; much of it hoovered up by international funds and private equity investors such as Davidson Kempner, Goldman Sachs, and Oaktree.

Also likely to figure are the likes of the Scandinavian family fund Varde, which has acquired key Cork suburban shopping centres, as well as York Capital, and Davy (who are about to redevelop another Patrick Street retail block) as well as Clarendon Properties, who’ve bought the Wilton Shopping Centre and are set to make major changes to their Savoy Shopping Centre after further site assembly.

Merchants Quay Shopping Centre was developed in recessionary times, in 1989, by O’Callaghan Properties.

The centre has changed hands several times since.

Some 29 retail units over two floors — along a central aisle — are now being put to market with joint agents Savills and CBRE this week, guiding at €12.5m, for fund owners Atrium Nominees Ltd, associated with Friends First.

Key to Merchants Quay’s future income growth is the proposed internal redevelopment and configuration, to integrate much of the internal mall circulation space into newly-reshaped larger retail units to meet today’s ‘big-box’ retailers.

Planning permission was granted a year ago for such alterations as well as a reskinning of the facade onto Patrick Street, replacing much of the brick and arched windows with new ‘curtain wall’ glazing.

The proposed changes to be carried out by any new owner will boost the income above the current €1.47m, according to Savills and CBRE, noting “with vacancy levels in Cork city centre at an all-time low, an incoming purchaser is poised to secure a significant foothold on Cork’s premier retail thoroughfare, and will stand to reap the benefit of a reconfigured scheme catering for retailer demand in turn leading to an increased rent roll.”

The development spans more than 4,000 sq metres and the sale includes 29 shops, including Boots, Costa Coffee, Laura Ashley and Dealz/Poundland.


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