50% stake in Liffey Valley centre for over €300m

RETAIL MARKET:THE TWO companies which own Liffey Valley shopping centre in west Dublin are hopeful of selling off a 50 per cent stake in the complex, despite the present banking crisis.

Morley and Grosvenor are seeking between €300 million and €400 million for the centre and for an adjoining site of 7 hectares (17.30 acres) that will accommodate the second phase of the centre.

With the current rent roll at €31.31 million, a €300 million valuation would show a net yield of 4.6 per cent while a €400 million price tag would equate to 3.47 per cent.

However, with top rents running at around €4,843 per sq m (€450 per sq ft), selling agent Savills HOK suggest that the current rental value is up to €40 million.

A selling price of €350 million would therefore give a reversionary yield of 5 per cent.

A local area plan suggests that the second phase could accommodate 35,000sq m (376,737sq ft) of retail space.

However, Barkhill (a company controlled by Grosvenor and O'Callaghan Properties) is in line for compensation if it secures planning permission. This company also owns another 6 acres on the campus.

The decision by the two UK companies to dilute their interest in Liffey Valley has been prompted by their unease in having around €1.5 billion in a single Irish property asset when the second phase is completed.

Liffey Valley already has 46,400sq m (499,445sq ft) of retail and leisure space.

Initial plans for the second phase indicate that it will include a department store, five multi-storey units and 28 other shops.

Green Property Company, which owns the competing Blanchardstown Town Centre, may be a contender for Liffey Valley, along with the Kenny-controlled Clancourt Group, and Joe O'Reilly of Chartered Land, who is also involved in the Pavilions in Swords, the ILAC Centre and the proposed Dublin Central complex.