€6m for former bank on Cork's Patrick St

Retail InvestmentThere will be plenty of competition for a prime retail building on Cork's main shopping street, writes Jack Fagan

An unusual opportunity to buy a prime, vacant retail building at Patrick Street, Cork, has just arisen with the decision by AIB to offload one of its city branches.

GVA Donal O Buachalla is guiding at least €6 million for number 67 Patrick Street, a four-storey period building with a modern single storey extension and separate frontage on to Paul Street.

The building extends to 502sq m (5,403sq ft) and has a potential retail area on the ground floor of 258sq m (2,777sq ft).

The period part of the building fronting on to Patrick Street is effectively freehold while the rear section - with a separate access on to Paul Street - is held under a lease at a current rent of €76,000 per annum.

Zone A rents on the newly refurbished Patrick Street have more than doubled in the last five years and currently range from €3,550-€3,750 per sq m (€330-348 per sq ft), depending on location.

However, lettings to Mango and Monsoon are believed to have achieved rents of over €4,500 per sq m (€418 per sq ft).

Fergal Burke of GVA Donal O Buachalla says there is a severe under supply of good quality retail properties on Patrick Street with most of the demand coming from Irish and UK multiples who want large floor plates of over 230sq m (2,475sq ft).

Competition for good pitches on the street have led to significant key money being paid - in one case, Carphone Warehouse apparently paid a premium of €440,000 for a well located shop on the street.

Investment yields for top retail properties in Cork are already below the 4 per cent mark because of the scarcity of investment properties.

Fergal Burke says he expects owner-occupiers, as well as investors, to pitch for the former bank building which is not listed for preservation.

The sale of the bank building comes after several years of branch closures by AIB in many parts of the country but more particularly in Dublin.

The bank has redeveloped another branch at 26 Patrick Street in Cork to cater for its city centre customers.