Bannon acted on behalf of The McCafferty’s Group with their acquisition of The Barge, the well established and high profile city centre pub premises. This is a perfect entry to the Dublin market for McCafferty’s.
Paul Doyle, Managing Director of Bannon represented the occupier.
Despite the well documented shortage of prime industrial accommodation throughout Dublin, Bannon are pleased to have advised the purchaser of this modern warehouse facility at Unit J Aerodrome Business Park, Rathcoole. The 20,000 sq ft detached building is situated on a 1.1 acre site with 9.2m eaves height within the warehouse. The acquisition, which progressed successfully throughout Covid restrictions, was concluded on behalf of a company operating in the importation and distribution sector. Niall Brereton advised the purchaser, the price paid was in excess of €2.5m. Philip Harvey and Kieran Casey of HARVEY were the selling agents.
A fund managed by Davy Real Estate has paid a total of about €175 million for Stephen’s Green Shopping Centre in Dublin.
The completion of the transaction in recent days gives the Davy investors full control of the shopping centre, following a period of nearly 13 years in which it had been owned jointly by several shareholders.
Davy Real Estate’s acquisition of the property involved the purchases of three separate shareholdings held by Madison International Realty (35.4%), businessman Pierce Molony (27%) and Irish Life (37.6%).
While the combined 62.4% stake of Madison International and Mr Molony was offered for sale quietly in a targeted process by HWBC in June, it is understood Irish Life had, until recently, intended to retain its interest in the centre.
Unsolicited approach
That position is said to have changed, however, after an unsolicited approach from Davy in early November. Having agreed a deal for the purchase of the majority of the St Stephen’s Green retail scheme, Davy informed Irish Life of its interest in taking full control of the property. Following a period of discussions between the parties, Irish Life agreed to sell its stake.
While Irish Life’s decision to dispose of its shareholding brings to an end its longstanding association with Stephen’s Green shopping centre, it continues to hold significant retail interests within its immediate vicinity, with 23 shops under its ownership in the Grafton Street area.
Stephen’s Green Shopping Centre was developed in 1988 by British Land. It has more than 90 shops over three levels with an overall floor area of 29,728 sq.m (320,000 sq.ft), and is currently producing rental income of about €8 million.
Stationery and book seller Eason has launched sale and leaseback deals for three stores which it owns in Limerick City, Tralee, Co Kerry and Clonmel, Co Tipperary.
The launch provides an opportunity to compare the returns which regional high streets can offer to investors.
For instance with these three properties the net initial yields will range between 7.5% and 11.5%.
The Limerick building is a mid-terraced property extending to 12,573 sq ft of which 9,461 sq ft is devoted to retail. Agents Bannon are guiding €2.2m for the property and offering a 25 year lease at an annual rent of €180,000. This equates to a net initial yield of 7.5%.
Set on a 0.1 acre site, the Limerick building ranges in height from a four storey over basement on O’Connell Street to ground and first floor on Cruises St. The basement extends under adjoining properties at 10 O’Connell Street and 1, 2 and 3 William Street.
Eason’s Tralee store at 25 The Mall, is on a prime stretch directly adjacent to Penney’s. Joint agents Bannon and Walsh O’Sullivan are seeking €1.23m and with an annual market rent of €120,000, they say this equates to an immediate return of 9% after standard acquisition costs are deducted.
The four-storey building extends to a net internal area of 6,483 sq ft incorporating a large retail area of 3,948 sq ft.
The Clonmel store is located at 19/20 Gladstone Street, in the main commercial area of the town centre. Joint agents Bannon and Moynihan Curran are asking €560,000 and with an annual rent of €70,000 this equates to a net initial yield of 11.5%.
Most of the lease terms are similar for all three stores with new leases for 25 years, five yearly open market rent reviews and a break option at the end of year 10.
These sales are part of Eason’s plan to sell 13 properties in the Republic which could generate €60m of which about €20 million would be invested in its retail business. The rest of the proceeds will be divided among its 220 shareholders.
It has already sold a retail outlet in Carlow town which it had let to another retailer and in January Eason agreed a deal to sell its 184,886 sq ft warehouse on 8.4 acres at St Margaret’s in north Dublin to Irish property fund Iput for €19m.
Sale and lease back deals are also among the options being considered for its flagship store on O’Connell Street in Dublin as well as its store on Patrick St in Cork city centre but the future timing and details of those have not yet been decided.
Last month Bannon launched a sale and lease back on Eason’s 11,200 sq ft store at 33 Shop St, Galway City with an €8m guide price. Its annual rent of €525,000 would equate to a net 6% initial yield.
Contact our Capital Market’s Team today on 01 6477900 for more information.
Hibernia Reit has sold a south docklands office block for €6.9 million more than it paid for it 14 months ago.
The sale, in which Bannon acted for the vendor and Knight Frank for the purchaser, is to a German pension fund which has secured an initial yield of 4.65%. This off-market transaction underlines the considerable weight of international capital competing for exposure to the Dublin market.
Hibernia bought the mid-sized office building at 77 Sir John Rogerson’s Quay last February for €28.7 million.
Its sale for €35.6 million, after deducting €200,000 on improvement works, marks a 24% rise in value.
After buying the building, Hibernia quickly agreed to let it to Regus on a 25-year lease from mid-2018 at an initial rent of €1.8 million and a nine-month, rent-free period. This letting was also handled by Bannon.
Built in 2004
The six-storey building was built in 2004 and includes 3,196 sq.m (34,400 sq.ft) of office space and 20 basement car-parking spaces. Individual floor plates extend to 540 sq.m (4,812 sq.ft).
Prior to its sale last year, it had been used as serviced offices by Fitzwilliam Properties since 2006. A number of high-profile foreign direct investment companies – including LinkedIn, PTC Bio, Indeed, Zendesk and Future Finance – got their first taste of the south docklands through short-term rental arrangements at No 77.
The area around the building is one of the most vibrant hubs in the docklands, with the tenant line-up including Accenture, Airbnb, BOI, Facebook, Google, State Street, TripAdvisor, Matheson, LogMein and BNY Mellon.
It will be interesting to see if the sale of 77 will renew interest in the nearby Reflector office block on Hanover Quay which went on the market in February through Savills and CBRE with a guide price of €155 million.
This prime block is probably the standout Dublin asset on the market at the moment. It will produce an annual rent roll of about €7 million and, given its asking price, would suggest a net initial yield of 4.2%.
No 77 is within 10 minutes’ walk of Luas and Dart services and is close to the Bord Gáis Energy Theatre and the 3 Arena.
A majority stake in Navan town Centre, which was on the market in 2016 for €62 million, has just been bought for about €43 million.
However, the off-market sale, which was handled by Rod Nowlan of Bannon and has just received clearance from competition authorities, did not include a residential element valued at less than €5 million that formed part of the 2016 offering.
The stake was sold to a fund controlled by Davy at an attractive yield of about 9-9.5%. This is undoubtedly a strong return for an asset of this scale in the Irish market at this time. However, the fall in value of the stake since 2016 is reflective of a softening market for provincial retail assets at a time when traditional retailing faces a significant challenge from eCommerce.
‘Stampede’
Declan Stone pointed to some notable retail transactions recently – principally Kilkenny, Carlow and Globe retail parks (all acquired by Friends First) – but suggested that retail as a sub-sector of the overall Irish investment market had its heyday in 2016 when retail transactions accounted for some 50% of a €4.4 billion market.
“In 2017 it fell to 28% of a €2.28 billion market and up to the third quarter of 2018 only accounted for about 11% of the total €2.53 billion spend,” says Stone.
“For me, the charge into retail in 2016 was somewhat surprising and seemed far more driven by the weight of capital than by underlying occupier demand. Put simply, retail yields tumbled – driving up capital values – but in the background there was little tenant demand to underpin this, and in fact in the intervening 24 months the occupational market has worsened.”
The 65% majority stake in Navan Town Centre came on the market in September 2016 through Savills and Cushman & Wakefield. CarVal Investors had bought loans underpinning the centre during the crash.
A number of deals were reportedly agreed for the stake at a price of about €54 million, but the major international investor concerned did not proceed with a transaction.
Driving force
The 65% shareholding was generating a rent roll of about €4.7 million as recently as 2017.
The balance of the shares in the centre are held by Irish Life.
Iput is to invest about €3 million refurbishing a large logistics facility it has just acquired for €19 million beside Dublin Airport. The acquisition is sizeable and significant in terms of the industrial market, which has been experiencing renewed interest from investors due to growth in online retailing.
Refurbishment works are already under way at Unit 1 in the Dublin Airport Logistics Park and the building should be ready for occupation this summer.
Industrial specialist William Harvey has been appointed sole letting agent. The going rate for letting similar space in the area is about €96.8-€102.25 per square metre (€9-€9.50 per square foot).
Unit 1 extends to 17,176 sq.m (184,886 sq.ft) and sits on a site of 8.4 acres. It was bought with vacant possession in an off-market deal. The building has a clear internal height of 9.5m with extensive loading access from 15 dock levellers and five grade-level loading doors.
Dublin Airport Logistics Park is close to the M1, M2, M50 and Dublin Airport.
Michael Clarke, head of investment at Iput, said the property fund was continuing to “strategically increase” its exposure to the logistics sector and now owns and manages more than 222,96 7sq.m (2.4 million sq.ft) of high-quality logistics space in Dublin.
“This acquisition reflects our strategy of acquiring large-scale logistics buildings in strategic locations which can be repositioned to provide enhanced income returns for shareholders,” he said.
Last year Iput acquired two significant logistics facilities in Dublin 15. It paid €12.3 million for 103 Northwest Business Park – a 10,904 sq.m (117,380 sq.ft) warehouse with 1,589 sq.m (17,104 sq.ft) of offices – and immediately embarked on a €2 million upgrade. Another logistics facility, extending to 9,800 sq.m (105,500 sq.ft), was acquired in the same park. “Both of these were pre-let on long-term leases,” said Mr Clarke.
Philip Harvey of William Harvey advised Iput on its latest acquisition at Dublin Airport Logistics Park and Rod Nowlan of Bannon represented the vendors.
Businessman Eamon Watters, owner of Panda Waste, one of Ireland’s largest waste collection and recycling companies, has acquired a substantial stake in Charlestown Shopping Centre at junction five of the M50 in north Dublin. The acquisition was made through an investment vehicle called Garristown Venture Holdings.
The large-scale shopping centre and an adjoining site with planning permission for 247 apartments and further retail space have been sold for slightly over €42 million, well ahead of the €35.5 million quoted by selling agents.
David Carroll and Rod Nowlan of Bannon’s Capital Markets team handled the sale on behalf of the vendors.
Garristown Venture Holdings is owned and controlled by Ronan Barrett, a Dublin-based businessman who is originally from Co Tyrone. Mr Barrett confirmed that it is funding the acquisition through a combination of equity capital from Citadel’s institutional and private clients and senior and mezzanine debt funding from AIB and Cardinal Capital. Mr Watters is thought to be the primary client in the Citadel entity.
Charlestown is a well-established district shopping centre developed by brothers Michael and Tom Bailey and now under the control of the National Asset Management Agency.
Michael Bailey is a near neighbour of Mr Watters close to the village of Beauparc in Co Meath.
Panda is the largest exporter of recycled materials in Ireland and employs more than 650 people.
Garristown has confirmed that it is at an advanced stage of discussions with a number of prospective tenants for Charlestown, which will see the delivery of new letting and services including a TGI restaurant, a creche and a gym – which will bring the centre to 100% occupancy.
Planning permission
The centre has the benefit of a current grant of planning permission for 247 apartments on adjoining lands.
The new owners are in advanced discussions with John Paul Construction about the commencement of residential development on the site in the fourth quarter of this year.
Garristown says the adjoining land has the capacity to accommodation more than 400 apartments based on the revised density and height guidelines.
The shopping centre and leisure facilities – a rented nine-screen Omniplex cinema and Leisureplex facility – are producing a combined operational income of €2,835,738 – with the shopping centre accounting for €1,935,000 and the cinemas and Leisureplex block yielding €900,000.
More than 75% of the rental income comes from 10 tenants in a scheme which has an occupancy rate of 91%. Charlestown is anchored by Dunnes Stores, which owns its supermarket extending to 6,500 sq.m (70,000 sq.ft).
The other main tenants are Heatons, which pays a rent of €450,000 followed by Boots (€400,000), Leisureplex (€225,000), Carphone Warehouse (€105,000) and Lifestyle (€70,000).
A good proportion of the weekly average footfall of 54,000 is generated by the free access to a 1,350-space underground car park.
Further signs of fast growing property values in Dublin’s Dawson Street emerged this week with the sale of the Trailfinders building for a full 60% above the guide price.
David Carroll of Bannon is delighted to have advised Trailfinders on their acquisition.
Agent Cushman & Wakefield initially invited offers of more than €7.75 million for the holiday booking premises at 4/5 Dawson Street. But with five different parties pitching for the site, it took a full four months to complete the sale at a figure around €12.4 million.
The opening bid matched the quoted price of €7.75 million, but thereafter it was a long drawn-out procedure, with most of the bids fixed at €100,000.
The successful bidder was none other than the sitting tenant, Trailfinders, which was challenged in the final rounds by a wealthy private investor.
Earlier in the marketing campaign it looked like the property might fall to BCP International and Meyer Bergman, which spent around €100 million assembling a large property portfolio centred mainly on Nassau Street and Dawson Street. The replacement buildings will have Grafton Street-style shopping facilities.
Jane Dolan of Cushman & Wakefield, who handled the sale of the Trailfinders building, said the operation’s success was down to the fact that she could sell the building by private treaty rather than inviting “best bids”.
The €12.4 million selling price is more than double the €6 million paid for the building some 20 years ago by property developer Gerry Gannon.
Trailfinders’ strong desire to hold on to the Dawson Street premises has been evident for some time. It originally agreed a 20-year lease of the ground floor and basement but has been over-holding the premises since the lease ran out in 2016.
The five-storey over-basement building has an overall floor area of 994 sq.m (10,709 sq.ft) and a rent roll of €399,360. Trailfinders has been contributing a rent of €278,500. Two other office tenants on the top floor have signed deeds of renunciation limiting their rental of the two premises to short-term leases.
The line-up of tenancies also includes a two-bedroom penthouse at the top of the building that attracts a top rent. Trailfinders will continue to have the use of five car parking spaces accessed from Dawson Lane.
The change of ownership comes around a month after Paddy McKillen jnr’s purchase of the headquarters of New Ireland Assurance a few doors away.The Press Up hospitality group will handle the reuse of the block, which is likely to end up with around 929 sq.m (10,000 sq.ft) of retail space on the ground floor.
Green Reit has already transformed part of the Dawson Street area by developing a two-dimensional landmark block at the junction of Dawson and Molesworth streets. Anchor tenants will include a branch of the London-based Ivy Collection of restaurants as well as Barclays Bank and the New York headquartered-Le Pan Quotidien bakery-restaurant.
