Eircom fund sinks £50m into Swords

One of the leading Irish pension funds, Eircom Superannuation, is to pre-fund a new town centre shopping complex at Swords, in north Dublin, at an initial cost of between £50 million and £60 million. Dunnes Stores and Superquinn will fill two of the three anchor stores in The Pavilions shopping centre, which is due open in the run up to Christmas of 2000.

In what is easily the largest retail investment deal this year, the Eircom fund will also have the option of acquiring later elements of the scheme, which will have a variety of leisure, recreation, office and shopping facilities, as well as a six-screen cinema. The complex is being developed by Flynn & O'Flaherty, which is a major player in the residential and commercial sectors. The company's next major scheme will be the development of the former Phoenix Park racecourse.

The precise cost of the investment to the Eircom fund will be determined by the rent levels achieved. With a high level of inquiries for the 45 shop units available on two levels, letting agents Hamilton Osborne King expect to secure Zone A rents of £110 per sq. ft. These will compare with £140 per sq. ft at Liffey Valley and £125 per sq. ft in a Blanchardstown Town Centre new letting .

Irwin Druker of agents Druker Fanning and Partners is property adviser to the Eircom fund, which has acquired a reputation for purchasing developments at an early stage to reap the full benefits. Examples of this include the acquisition of the first office block at The Sweepstakes in Ballsbridge for £9 million. It is now valued at £20 million.

The fund also paid £25 million for the second block in The Sweepstakes, which is let to Goodbody Stockbrokers. Here again the value has soared. It is now worth over £35 million. The fund has grown rapidly since it was set in 1984 and now stands at about £1.5 billion. Annual returns since then have averaged 13.4 per cent, well above the inflation rate.

The £120 million property portfolio is producing annual rents of over £4.2 million.

Both Dunnes and Superquinn will own their stores in Swords. Dunnes is thought to be paying about £15 million for 80,000 sq. ft on two levels. The ground floor will be used as a supermarket while the upper floor will trade as a department store. Superquinn, which currently trades from an adjoining site, is paying around £7 million for its store, which will have a floor area of 40,000 sq. ft. The third anchor store of 25,000 sq. ft is under offer to a major UK multiple.

Negotiations are at an advanced stage with a number of UK and Irish retailers in the fashion, footwear and convenience trades.

The Pavilions will have a total retail area of 250,000 sq. ft and multi-storey and surface parking for 1,600 cars. The overall design provides for a new system of pedestrian walks linking the existing town centre with a civic square.