Galway shops sold for £2.65m set new yield benchmark

A new benchmark net yield of 3.5 per cent was set in Galway city last Friday when two adjoining retail investments were sold for an exceptionally strong price. The two shops beside the Brown Thomas store at William Street were sold at auction for £2.65 million (€3.36m) - a long way ahead of the initial guide price of over £1.7 million (€2.16m). The high level of interest in the sale underlines the renewed interest in commercial properties by private investors since interest rates fell to their present level. There was a packed auction room for the Galway property which was sold to the two tenants by local agent Colm O'Donnellan of O'Donnellan & Joyce.

The two shops are located along the busiest stretch of the pedestrianised William Street. They are currently producing a combined rental income of £88,200 (€111,990). The main building is rented by Dublin Wholesale Manufacturing Jewellery, which trades as Lazlo Jewellers. The current rent of £61,200 (€77,708) had been expected to rise to at least £85,000 (€107,930) when reviewed next July. The second shop has been paying a rent of £27,000 (€34,280). Mr O'Donnellan said that with an overall square footage of 2,742 sq ft on three levels, the sale price works out at almost £100,000 (€126,973) per sq ft.