Investors pay over EUR95 million in two separate retail deals

A private investor has paid over €55m for investment properties on Chatham Street, off Grafton Street, while another has offered over €40m for shops on Henry Street. Jack Fagan, Property Editor, reports

Two private investors have agreed to pay over €95 million for two different retail portfolios offered for sale separately by Royal Liver and Royal and Sun Alliance.

In a private deal, one of the investors is paying over €55 million for a range of investment properties on Chatham Street in Dublin 2, including nine shops, Chatham House, where the tenants include Great Outdoors, the Zerep shoe store at 57 Grafton Street and five retail investments at The Square in Tallaght.

These and other properties were due to be put on the open market by Royal Liver but when the sale was postponed to avoid overlapping with other sales by the institution, the private investor opened negotiations and quickly agreed a purchase price.

John Moran of Jones Lang LaSalle, who handled the sale, said yesterday that the offer they accepted was well in excess of Royal Liver's valuation of the portfolio. The overall yield is expected to be around 3.5 per cent.

In the other transaction, a leading investor is understood to have offered over €40 million for four adjoining shops in Dublin's Henry Street which are producing a rent roll of €1,365,000.

Three of the shops are rented by leading UK multiples HMV, Boots and Clinton Cards, while the fourth is occupied by Irish fashion retailer Extrovert.

Royal and Sun Alliance, which is being advised by Hamilton Osborne King, is expected to confirm the sale in the coming week.

A wide range of private investors preparing to pitch for the parade of shops in Chatham Court on Chatham Street will be disappointed to discover that they have already been sold privately.

They are exceptionally well located in an area with a busy day and night business that has evolved into a more upmarket version of Temple Bar.

Three of the retail units on Chatham Street are rented by May Frisby of Pasta Fresca at €127,455 per annum. With rents in the immediate area shooting up, Pasta Fresca will be faced with significant rent increases on the three individual units, which fall due in 2004, 2005 and 2006.

Other shops included in the sale are Steps of Rome (€31,743); Galleria Cutlery & Tableware (€78,910 for two units); Coral Ireland (€29,204) and Irish Chocolate Company (€25,903). The rent roll comes to €326,096 and does not include the overhead apartments which are held under 500-year leases.

Chatham House on the opposite side of the street, which is also included in the portfolio, is currently producing a rent roll of €472,247.

Great Outdoors is contributing €184,111; Pizza Caesar pays €116,308; Germano Terrioni pays €46,732 and Kitchen Complements pays €47,500. Kenmare Resources is the main office tenants overhead, paying €77,596.

The Zerep shop on Grafton Street is a three-storey over basement building producing a rent of €146,020 per annum. The next rent review is due in December 2004. It has a total floor area of 211.16 sq m (2,272 sq ft) including a Zone A area of 14.30 sq m (153 sq ft); Zone B of 20.07 sq m (216 sq ft) and Zone C of 29.82 sq m (320 sq ft). The first floor area extends to 69.68 sq m (750 sq ft).

The five retail investments at The Square in Tallaght are currently yielding a total rent of €477,421, of which €298,388 comes from Heatons. Belucci Menswear pays €101,579; First Choice Travel pays €39,362 and Black Tie pays €38,092.

The Royal Liver portfolio also includes four attractive industrial and retail warehousing units at Long Mile Road, Dublin 24, which are producing €366,638. The largest tenant is Axa Insurance which pays a rent of €163,796 under a 20-year lease from 1996. Other tenants are HSS Hire Service Group, Allied Ceramic Tiles and Irish Life and Permanent. The sale also includes a Cork investment at 13/15 Oliver Plunkett Street which is producing €155,568 from Axa insurance and Arup Ireland.