Another purchase by Israeli investor

Wealthy Israeli investor Igal Ahouvi is continuing to buy up retail investments in Dublin.

Only a week after paying €7.7 million for a store rented to Aldi at Sandyford, Dublin 18, he has also bought the Skechers shoe shop at 4 Henry Street from Irish Life & Permanent for €4.15 million.

The investment had been on the market since the beginning of this year at an asking price of €4,950,000.

Though Savills handled a considerable number of enquiries there were no initial takers because of the signs through much of the year that high street values were still falling.

By holding out until now Mr Ahouvi can bank on a net return of 7.2 per cent instead of the original yield offered of 6 per cent.

The terms of the sale will be of particular interest to other vendors contemplating the sale of retail properties in the city centre.

Skechers is paying a rent of €310,000 or 10 per cent of turnover – whichever is the higher – for the well-located Henry Street shop on a 25-year lease from September, 2010.

The 15 year lease includes a break option in year 10 so there is a minimum of almost eight years remaining on the lease.

An unusual feature of the lease is that the US parent company, Skechers USA Inc, is only guaranteeing the rent over the initial five years. However, the new owner can seek annual fixed rental increases up to €350,000 in the fifth year followed by open market reviews.

Number 4 Henry Street is likely to prove a good buy, not only because of its prime location but also because of its large floor plates. It has an overall floor area of 522sq m (5,625sq ft) and a larger than usual ground floor of 170.25sq m (1,833sq ft).

Ahouvi’s 7.2 per cent yield in Henry Street is only slightly below the 7.5 per cent return he will earn on his Aldi investment in Sandyford which cost €7.7 million. Aldi’s other store on Parnell Street sold for €4.5 million and is showing a return of 7.9 per cent.

The Navan office block which was bought for €5 million will give him the best yield of all of 9.7 per cent over the life of the lease.