HSBC fund spends €250m on stake in Liffey Valley

The deal will enable Aviva Investors to hand over 72.8 per cent stake to international fund

Liffey Valley shopping centre in west Dublin: produces a rent roll of €28 million from about 70 stores including Marks and Spencer, Dunnes Stores and the Vue Cinema. Photograph: Frank Miller

Liffey Valley shopping centre in west Dublin: produces a rent roll of €28 million from about 70 stores including Marks and Spencer, Dunnes Stores and the Vue Cinema. Photograph: Frank Miller

Mon, Feb 17, 2014, 01:00

HSBC Alternative Investments (HAIL) has acquired a majority stake in Liffey Valley shopping centre in west Dublin for more than €250 million. The deal, due to be confirmed today, will enable Aviva Investors to hand over their 72.8 per cent stake to the international fund. The remaining shareholding will continue to be owned by UK property giant Grosvenor Estates.

Hines purchase
As part of the transaction, HAIL has apparently agreed to sell on a small equity holding to Hines, the US-based investment company, which has been targeting distressed Irish property assets since opening a Dublin office three years ago.

The overall sale will include 17 acres, which are to be used to enlarge the 46,600sq m (501,593sq ft) centre. Liffey Valley produces a rent roll of €28 million from about 70 stores including Marks and Spencer, Dunnes Stores and the Vue Cinema.

Before the recession, Aviva and Grosvenor had sought €300-400 million for a 50 per cent stake in the centre, but there were no takers.

One leading tenant said yesterday that Liffey Valley has been trading exceptionally well. “The reason it is doing so well is because it is easy to use . . . it has the best location on the M50 and more than 3,000 surface car parking spaces.”

However, one of the drawbacks in the centre has been the absence of a full supermarket since the centre opened almost 20 years ago.

That shortcoming is likely to be addressed shortly following the sale of a six-acre development site to Tesco for a figure reputed to be in the region of €30 million.

The UK multiple is expected to build a store of at least 5,574sq m (60,000sq ft) close to the existing complex.

Development work is also due to start shortly on a new 5,574sq m (60,000sq ft) Penneys store.

Liffey Valley management has also secured planning approval to enlarge the centre at a cost of about €25 million. The planned three-storey extension will exceed 10,585sq m (114,000sq ft) and will include additional space for fashion outlets and restaurants as well as a new communal public area.