Eyre Square Shopping Centre in Galway city centre has been sold for €9.575 million.
While Colliers, which handled the sale, did not identify the purchaser, The Irish Times understands the scheme has been acquired by a fund managed by Davy Real Estate. The price paid equates to a net initial yield of 9.78 per cent after allowing for standard purchaser's costs. It also represents a discount of 33 per cent on the €12.75 million Colliers had been guiding when it brought the shopping centre to the market on behalf of US investment giant Marathon Asset Management last August.
While Eyre Square Shopping Centre comprises over 70 retail units and kiosks, the sale itself was confined to eight retail units and control of the centre together with the freehold common area units. The eight retail units boast a strong tenant lineup, including JD Sports, Great Outdoors, Specsavers, Diesel, Starbucks and Vero Moda.
The units are currently producing rental income of €869,200 per annum with a weighted average unexpired lease term of 6.24 years to break. The incoming investor will have an opportunity to immediately increase the rent roll on letting the two vacant units.
The centre also has direct access to 450 car parking spaces in Eyre Square car park. The building forms part of a combined shopping centre with both Corbett Court and Edward Square Shopping Centre, with access provided directly from Eyre Square, Williamsgate Street and Castle Street. Anchored by Penneys and Dunnes Stores, the scheme has a mix of local, national and international retailers.
Penneys are expanding in the centre – increasing the size of their footprint in Eyre Square by about 50 per cent. The new store will have some 60,000sq ft of retail accommodation over the ground and first floors.
The centre was subject to considerable investment by Marathon, who undertook a substantial capital expenditure and refurbishment programme to provide a redesigned entrance from Eyre Square together with the development of modern retail units and a restaurant.
The common area units comprise a number of short- and long-term rolling licence agreements and include kiosks, store rooms, telecoms masts and general mall income. They are located over both floors of the centre and generate a current rent roll of €160,202 per annum. The units have had a consistently-high occupancy rate, according to the selling agent, with average income over the last five years of about €220,000 per annum.
The kiosk operators include Café Express, Mark Twain and Over The Moon, with store rooms predominantly occupied by larger retailers who have a presence in the centre.
The mast income is derived from a number of well-known mobile providers, namely Meteor Mobile, Esat Digifone and Vodafone.
Michele McGarry of Colliers’ capital markets division said: “This opportunity saw significant interest from investors, predominantly domestic, given the attractive yield and high profile of Eyre Square Shopping Centre.”