Crumlin centre makes €38m and Submarine Bar €12m

RetailInvestmentsCrumlin's Ashleaf Shopping Centre and the adjoining Submarine Bar have been acquired in deals worth €50 million, writes Jack Fagan

Two private investors have bought the Ashleaf Shopping Centre in Crumlin, Dublin 12, for €38 million. The Submarine Bar, one of the largest pubs in Dublin which forms part of the complex, was also acquired for a further €12 million.

IIB originally had an option to buy the shopping centre for a group of private investors but, when negotiations became bogged down, the two investors apparently instructed business adviser Pascal Taggart to move in and acquire both the shopping centre and the bar for them. One of the new owners, who is heavily involved in the property market, will hold a majority stake in the investment.

Ashleaf was developed by the Smith family headed by brothers Frank and John who opened it in March 2000. The Smiths also owned The Submarine Bar which was offered for sale separately last year but was withdrawn after it failed to make the reserved price. One of the conditions of the sale allows the Smiths to lease back the bar for two years. This lease may be extended at the end of that term. Alternatively, control of the huge pub may pass at that stage to the new owners who could decide to sell it.

The shopping centre has been trading well and has a rent roll of €1,956,757. The 7,432sq m (80,000sq ft) complex was developed on a high profile site of almost 4.5 acres at the busy intersection of Cromwellsfort Road and Whitehall Road West, just south of Crumlin village. The centre is located in the heart of a densely populated area where many residents are able to walk to the complex.

The centre is anchored by a 4,830sq m (52,000sq ft) Dunnes Stores supermarket and drapery department. Dunnes is planning to add a second floor to its outlet. Other tenants include McDonalds, Car Phone Warehouse, Budget Travel, Health Matters, Unicare pharmacy, Graham O'Sullivans restaurant, Cosgrave Meats and Books Now.

The sale of the Ashleaf Centre comes at a time when there are few property investments for sale in the Dublin area while demand for retail investments in the city centre continues to drive yields down. An investor has settled for an initial yield of less than 3 per cent when agreeing to purchase 24 Liffey Street, Dublin 1, a three-storey over basement retail building near Marks & Spencer.

Hamilton Osborne King had been guiding €1.5 million for the investment but, with a large number of players chasing it, the selling price ended up around double that figure.

The building is currently producing €52,059 a year from Ian Farrell (trading as Blue Grass Boutique) but a rent review is already overdue. The retail space is confined to the ground floor and there is a total floor area of 210sq m (2,260sq ft) - the other floors are used as stores.

While it is not unusual for initial yields to drop to around 3 per cent when some buildings sell on Grafton and Henry streets, that level of return - even if short lived - is most unusual on secondary streets like Liffey Street. The overdue rent review is expected to push the returns to over 4 per cent.

There is a constant flow of pedestrians through upper and Lower Liffey Street, especially at weekends when it forms part of the corridor linking Grafton and Henry Street. But the high level of traffic does not translate into buoyant sales on Liffey Street largely because many of the shops are tatty and unattractive.

A second retail investment to make a strong price this week, 18/19 College Green, opposite the Central Bank, is on an almost equally unimpressive street. Jones Lang LaSalle has agreed the sale of the building at around €8 million, well above the guideline price of €6.5 million.

The six-storey over basement building has 845sq m (9,096sq ft) of retail and office space and is producing €237,056 a year in rent. The retail area is occupied by the UK government-sponsored Britain Travel Centre on a 25-year lease from 1995 at an annual rent of €92,056. The company is attempting to sell its lease. The top five floors, covering 508sq m (5,463sq ft), are occupied by IT Solutions under a 35-year lease from 1991 at a rent of €145,000.