Athlone’s Golden Island shopping centre sold by Tesco to Credit Suisse for €43.5m

 
Swiss bank Credit Suisse has purchased the Golden Island shopping centre in Athlone for

€43.5 million. The investment will be held by one of a number of real estate funds managed by the bank.

The 20-year-old centre is producing a rental income of €3.1 million which will give the new owners an attractive return of 7.42 per cent.

Tesco announced its intention to sell the Athlone facility last summer as part of a wider plan to stop the relentless expansion of its Irish store network as it battled to regain growth. The supermarket chain has 149 outlets here and had assembled a large number of additional sites which will not now be developed.

The sale of Golden Island comes almost a year after the adjoining – and slightly larger – Athlone Town Centre was also sold for close to its guide price of €61 million.

Food and convenience

Golden Island’s success is largely based on its food and convenience offering, with Tesco and Penneys as the main anchors. Other occupiers include Boots, Argos, Lifestyle Sports, Elvery’s, Holland & Barrett, Specsavers and Dealz. The centre also includes a six-screen IMC cinema.

Credit Suisse, like the other bidders, had an option to bid separately for the Tesco store onsite but did not do so.

One of the main selling points for Golden Island was its strong footfall, even over the winter months when Athlone was badly affected by flooding. The centre was not affected by the flood waters and managed to attract a higher number of shoppers during the flooding crisis.

The last six months has seen increased interest in the Irish retail market by foreign investors, many of them attracted by the low base rental levels and the ongoing recovery.

Golden Island’s traditional single-mall format was developed in 1996 by Owen O’Callaghan, Michael Tiernan and Tom Diskin with the benefit of tax breaks. The centre has a retail floor area of 14,306sq m (154,000sq ft) which is shared by 45 retailers. The centre benefits greatly from its convenient 1,000-space car park. The shopping centre was sold to Tesco about 10 years ago for €52 million.

In addition to the Tesco store, both Penneys and Lifestyle units as well as the cinema are owner-occupied.

The main tenants are Argos, which pays a rent of €270,000 for 799sq m (8,600 sq ft); Elverys, €210,000 for 582sq m (6,300sq ft); Boots, €200,000 for 557sq m (6,000 sq ft); Burger King, €125,000 for 297sq m (3,200sq ft); Specsavers, €115,000 for 185sq m (2,000sq ft); AIB, €92,000 for 148sq m (1,600sq ft) and Wallace Clothing, €165,000 for 185sq m (2,000sq ft).

Francisca Farina Fischer of Credit Suisse Real Estate Investment Management said the bank was delighted with the acquisition which, along with two other office investments, showed its commitment to Ireland and its belief in the recovery of the Irish retail market. “The importance of Tesco as one of the main anchors was key to the deal,” he said.

Sean O’Neill of TWM acted for Tesco on the transaction while Jonathan Hillyer of HWBC advised Credit Suisse.