ShoppingCentresThe Fairgreen centre in Carlow at €80m and Limerick's Parkway centre for €56m will interest private and institutional investors, writes Jack Fagan
Two large provincial shopping centres are for sale - the relatively new Fairgreen in Carlow which has a price tag of €80 million and the dated Parkway in Limerick, which is available at €56 million.
Both shopping centres have been offered to small groups of private investors though there are indications that the Carlow complex may also be of interest to institutions under pressure to rebalance their portfolios.
The three-year-old Carlow centre is currently producing a rent roll of over €3 million and, once the first round of rent reviews is settled in about two years, it should be showing a yield of around 5 per cent.
The asking price of €56 million for the Parkway will be seen as extremely bullish for an old fashioned centre that has been outflanked by a new retail park on the opposite side of the road and, more particularly, by a new-style 24-hour Dunnes Stores that has opened close by on Childers Road.
Were Charlie Kenny's Clancourt Group to get the asking price, it would show an initial return of 4.19 per cent - a yield more in keeping with a high street location than a suburban site. A memorandum from the selling agents, seen by The Irish Times, says that the yield would go to 5.3 per cent once three vacant units are let and a series of rent reviews are completed. The joint agents are DTZ Sherry FitzGerald and Jones Lang LaSalle.
Lisney is handling the sale of the Carlow centre for Northern Ireland businessman Gerard O'Hare of Parker Green who has also developed The Quays shopping centre in Newry. He recently acquired a site in Waterford which has been targeted for a shopping centre.
Ann Hargaden of Lisney said they had "no comment whatsoever to make" about the Fairgreen centre. It was recently extended to bring the overall retail area up to 18,000sq m (193,725sq ft). Tesco owns the 4,529sq m (48,750sq ft) anchor store while the other tenants include Heatons, Argos, River Island, Next, New Look, A Wear, Sasha, Pamela Scott and Game Stop.
Fairgreen is trading exceptionally well and its main competition comes from Superquinn and Aldi which have stand-alone stores. Like some other provincial towns, Carlow has a chronic traffic problem during business hours. The Parkway centre is 21 years old and looks its age. It was doubled in size in 1989 and has an overall floor area of 14,400sq m (155,000sq ft) with the anchor store of about 7,896sq m (85,000sq ft) occupied by Dunnes Stores. The other tenants include 02, Ladbrokes, Burger King, Tylers, Sasha, Carphone Warehouse and Dynasty jewellers.
Clancourt also owns The Crescent Shopping Centre on the opposite side of Limerick city. It has been enlarged and upgraded in recent years and is trading particularly well.
