Swan Centre in Rathmines expected to make £14 million

British Land is seeking £14 million for The Swan Shopping Centre in Rathmines, Dublin 6, which it has owned for the past eight years. The company's other major retail investment in Dublin is the St Stephen's Green Shopping Centre.

The decision to sell The Swan centre will not come as any great surprise in a market where retail investments have soared in value over the past two years. British Land had originally planned to dispose of the centre a year ago but deferred the sale until it got planning approval to convert the first floor level into a seven-screen cinema complex. A decision on the planning application is still pending, though there are indications that the matter will be ruled on in the coming weeks.

Even without the cinema complex, the centre is producing a rental income of £855,000 per annum. In order to improve the yield on offer, British Land has undertaken to make capital payments of £300,000 in instalments to maintain an income yield of 7.3 per cent until July, 2000.

By October of that year, the reversionary yield will be over 8 per cent.

Joint selling agents, Jones Lang Wootton and Douglas Newman Good, estimate the rent roll will rise to over £1.219 million by October, 2001. The centre is likely to be of interest both to private investors and institutions that need to strengthen their retail portfolio. Only a small number of prime retail investments have come on to the market in the past year and there has been intense competition for them, mainly among private investors and business syndicates. The Swan centre has an underground car-park with 315 spaces which are now heavily used since the opening of a new access along Rathmines Road. Another bonus is that a great number of the shoppers live within walking distance of the centre.

It is one of the most successful district centres in Dublin, largely because of the dense population in the immediate area. It is estimated that about 175,000 people live within a two-mile radius of The Swan. About 80,000 people use the centre each week, bringing the number of customers up to four million a year. The centre was developed by Sisk Properties in 1983 and extensively refurbished by British Land in 1992. It is a two-storey in-fill complex with 90,000 sq ft of space. There are 38 retail units at ground floor level and 14 on the first floor.

The centre is anchored by Dunnes Stores, which has food, fashion and hardware units. Dunnes owns its 36,000 sq ft supermarket but pays rents of £55,000 for other space. A McDonalds fast-food restaurant pays a rent of £60,000 for a two-storey unit, which fronts on to Rathmines Road. Other tenants include Xtra-Vision, which pays a rent of £64,500; EBS, £29,000; Cafe Kylemore, £56,000; and Tylers, £62,000. Lets Talk Phones is paying a rent of £25,000 for a unit of 660 sq ft, the lease of which was bought from O'Brien's Sandwich Bar for a premium understood to be £25,000. The agents say the centre is well positioned to take advantage of the increasing affluence of the Irish consumers. Retail sales in Ireland have increased by an average of 5 per cent per annum over the past three years and this trend is expected to continue. In addition, the rate of increased spending is underpinned by the savings ratio which has come down from 18 per cent in 1987 to 9 per cent in 1997.