The German investor Union Investment is closing in on the purchase of the new, state-of-the-art warehousing and distribution facility being developed by Penneys in Newbridge, Co Kildare.
Having only recently agreed to pay €70 million for a 262-bedroom hotel being developed by Glenveagh Properties at its Castleforbes scheme in the Dublin docklands and a further €200 million for 435 apartments that Sean Mulryan's Ballymore is delivering at Royal Canal Park in Ashtown, Dublin 15, Union is understood to be in advanced negotiations to acquire the fast-fashion retail giant's logistics hub for about €129 million.
Should it proceed, the forward-funding deal would provide Union Investment with a yield of 3.7 per cent.
While a total of 10 parties are understood to have expressed their interest in Penneys' Great Connell facility when joint agents JLL and Savills offered it to the market at a guide price of €110 million-€115 million in September, Union is said to have seen off competing bids in the second round of the sales process from Australian financial services giant Macquarie, German investor Deka Immobilien and M&G Real Estate, which has its headquarters in the UK.
News of Union Investment’s proposed purchase comes just weeks after Penneys secured planning permission from Kildare County Council to develop the logistics hub. Upon completion, the facility will comprise a distribution centre, and warehouse and office space extending across a gross floor area of 64,550sq m (694,810sq ft) on a 15.42-hectare (38.1-acre) site.
As part of its planning application, Penneys outlined measures that it intended to take in the new facility to maximise efficiency and reduce its environmental impact, such as rainwater harvesting for water reduction, use of air-source heat pumps to provide heating where required and the use of solar panels to reduce primary electrical energy input.
There will also be more than 2.3 hectares (5.6 acres) of landscaping, including native Irish trees, wildflower meadow and ponds, throughout the site.
The facility is being developed as an addition to Penneys’ current depot in Naas, which has serviced the company’s operations in Ireland for the past 17 years.
The new Newbridge depot will employ 212 people and act as an all-island facility, creating additional capacity and serving the retailer’s shops on both sides of the Border. The facility will also support Penneys’ ongoing national and international growth and supply chain network strategy into the future.