Six Retail Schemes & One Office Block for €120m

One of the largest ever retail investment portfolios to be offered to the market in Ireland was launched today by joint selling agents Savills and Bannon.

The €120m ‘Spectrum Portfolio’ comprises seven assets producing approx. €11m of income offering an attracting initial yield in the region of 9%.

The offering represents a true portfolio as the assets span all four retail sectors, namely Retail Warehouse, Grocery Retail Centres, Town Centre Retail and a Suburban Shopping Centre. The retail schemes include

§  Douglas Court Shopping Centre, South of Cork City

§  Dundalk Retail Park, Dundalk, Co. Louth.

§  Quayside Shopping Centre, Sligo Town

§  Bloomfields Shopping Centre, Dun Laoghaire, Co. Dublin

§  The Mill Shopping Centre, Clondalkin, Dublin 22

§  Kilbarrack Shopping Centre, Dublin 5

Also included in the sale is a State let office block opposite The Mill Shopping Centre on Ninth Lock Road. This is a three storey modern office building let in its entirety to Dublin City Council and the OPW together with 94 car parking spaces.

All properties are funded by Lloyds Bank who appointed Receivers. Combined, these assets provide approximately 569,000 sq ft of commercial accommodation and over 31 acres of development land. The portfolio offers an attractive net initial yield of 9% (based on the guide price), and provide a current passing rent of approximately €11m per annum.

Anchor tenants within the schemes include Tesco, Dunnes Stores, Woodie’s, TK Maxx and Boots. In total, there are over 170 tenants and 3,600 car parking spaces in these seven locations.

Fergus O’Farrell, Director of Investments at Savills Ireland and Roderick Nowlan, Director of Investments at Bannon said;

The retail sector is clearly reaching a turning point.  Retail sales are steadily increasing, there is a dramatically improved labour market and the prospect of more neutral budgets are now feeding through to the retail economy. This hasn’t gone unnoticed by investors, who are now beginning to seek opportunities in this space. Therefore we expect interest in The Spectrum Portfolio to be strong due to the diverse collection of assets on offer and its exposure to all sectors of the Irish retail market.” 

Location

A common feature of all the schemes in The Spectrum Portfolio is their proximity to large catchment areas and transport links. Three of the shopping centres – Bloomfields, The Mill and Kilbarrack – are situated in South, West and North Dublin and are within 30 minutes of the City Centre. All have strong surrounding public and private transport infrastructure including bus, train and motorway access. Douglas Court Shopping Centre in Cork – Ireland’s second largest city – is situated in one of Cork’s most affluent suburbs just off the city’s South Ring Road and is within walking distance of local bus routes providing access to Cork City Centre in approximately 15 minutes.

Quayside Shopping Centre in Sligo – located in Ireland’s northwest – has the second largest population centre, after Galway City, in the region. It is located in the commercial heart of the Town Centre, and approximately 300 metres from the N4 – the main road to the large catchment areas of Roscommon and Mayo. Dundalk Retail Park is strategically located between Dublin and Belfast – the two largest cities on the island of Ireland – and is well positioned in a high profile location along the N52 orbital road, with easy access to the M1 motorway.  Dundalk Retail Park is the only retail park in Dundalk and one of the largest parks in Ireland.

Development Potential

Douglas Shopping Centre offers investors several development opportunities to include an extension to facilitate a new letting to a Gourmet Convenience Food Retailer, an extension to the main anchor stores as well as a standalone drive thru’ restaurant. Extensive future potential redevelopment opportunities have also been identified through a consultation process with Cork County Council to enhance the future potential of the scheme. 

Dundalk Retail Park also offers future development opportunities through two adjacent development sites which extend to a total of approximately 31 acres.

Rent Roll & Occupancy Rates

Another common feature of the retail schemes on offer is their attractive rent roll and high occupancy rates. Bloomfields Shopping Centre has a total retail area of approximately 120,000 sq ft (this includes the Tesco, IMC Cinema and 2 units which are held by way of long leasehold).  It is currently 85% occupied with a passing rent of €852,220 per annum. The property has a weighted average unexpired lease term (WAULT) of 7.2 years. Anchored by Tesco, key tenants include Dealz, Boots, Vero Moda, Argos and Dun Laoghaire Rathdown County Council.

The Mill Shopping Centre extends to a total area of approx. 137,800 sq ft.  It comprises a single mall with 30 retail units and 820 surface car parking spaces. The Centre will have 100% occupancy when deals in legals complete and a passing rent roll of €1,291,100 per annum with an attractive WAULT of 10.9 years. Dunnes Stores is the anchor tenant who occupy their space by way of long leasehold.  Key tenants include Boots, Lloyds Pharmacy and Carphone Warehouse.

Kilbarrack Shopping Centre is 96% occupied with a passing rent of €721,000 per annum. The WAULT is 11.8 years. Key occupiers within the development include Tesco, Ladbrokes and Pizza Hut. A petrol station operated by Top Oil is located within the car park which has approximately 140 spaces.

Douglas Court Shopping Centre provides approx. 167,900 sq ft of retailing space with over 50 retail and kiosk units with an occupancy rate of 94%.  The passing rent is €3,904,940 per annum with a WAULT of 7.6 years. Key tenants in the Centre include New Look, Boots and Next.  Dunnes Stores is the anchor tenant and hold their unit by way of long leasehold. The surface car park provides space for approximately 950 cars.

Quayside Shopping Centre comprises a two level town centre scheme with over 40 shops over a basement car park offering approximately 400 spaces. The scheme comprises a total floor area of approximately 137,000 sq ft (office and retail space) with over 70% of the accommodation included in the sale together with the car park.  The units being sold have an occupancy rate of 90% and a WAULT of 4.39 years. The current passing rent is €1,289,100 per annum. Key tenants include TK Maxx, Next, River Island, Monsoon and Oasis.

Dundalk Retail Park comprises 20 retail warehouse units totalling approx. 223,276 sq ft, an industrial warehouse unit of approx. 15,000 sq ft (approx.) and a fast food restaurant of approx. 2,900 sq ft. The current rental income is €2,467,072 per annum, while the WAULT is 8.3 years. The retail occupancy rate is 96% and key tenants include Woodies, Currys, Homestore & More, Smyths Toys and KFC.

B1 & B2 Ninth Lock Road is a three storey modern office building situated beside The Mill Shopping Centre. It is fully let to two state