Nama has confirmed the scale and identify of its first retail park portfolio to be offered for sale. Five parks, including the first phase of Carrickmines Retail Park in south Dublin, are expected to be make about €110 million when sold in a single lot through agents CBRE and DTZ Sherry FitzGerald. The four provincial centres are the M1 in Drogheda, Lakepoint in Mullingar, Poppyfield in Clonmel and Four Lakes in Carlow.
The parks portfolio is currently producing an overall rental income of €9.5 million which will give new owners a net initial return of 8.4 per cent.
The sale is expected to be of interest to REIT companies as well as overseas funds anxious to rebalance their Irish portfolios at a time of yield compression in the office market and an improved appetite for retail investments.
Willie Norse of CBRE said that with good asset management the returns from the portfolio could be considerably enhanced.
By far the biggest and most valuable investment going for sale is phase 1 of Carrickmines Retail Park, accounting for more than €60 million of the overall valuations. It was bought in 2007 for a reported €100 million by property developer Liam Maye, who was also one of the owners of Dundrum Town Centre, and who died unexpectedly in May 2008.
The Carrickmines investment is producing a rental income of €4.4 million from eight retail units with potential to increase the rent roll once a tenant is found for another building extending to 974sq m (10,500sq ft).
Woodies DIY and garden centre is the anchor tenant here as well as in three of the other retail parks, paying a rent of €1.8 million for 6,038sq m (65,000sq ft). The other traders are PC World, which is paying €620,000; Smyths Toys (€530,000); Currys (€530,000); Next (€400,000), along with Halfords, Hickeys Fabrics and 53 Degrees North. The overall floor area runs to 18,874sq m (203,170sq ft).
Phase 2 of the park, which is not included in the sale, also has a strong tenant line-up that includes TK Maxx, Heatons, Mothercare and Harvey Norman.
The M1 Retail Park, one of two large parks on the outskirts of Drogheda, was developed by businessman Paddy Doyle and has 23,985sq m (258,188sq ft) of retail warehousing, offices, leisure and restaurant facilities. All but one retail unit extending to 1,579sq m (17,000sq ft) are occupied and producing a rent roll of €2.8 million. Woodies accounts for €1 million while Smyths Toys contributes €220,000. The guide price of €25 million includes an adjacent 31 acres which are zoned for development. Several motor showrooms as well as a Lidl outlet in the park have separate owners.
Lakepoint Retail Park in Mullingar, which has been valued at €8 million, was one of the first retail parks outside Dublin when it opened for business in 2001. It is currently producing a rent roll of €772,000 from the range of buildings which are about 75 per cent let and have an average lease term to run of 11.5 years. Woodies is again the anchor in the 7,896sq m (85,000sq ft) park which benefits greatly from its close proximity to IMC Cinemas.
CBRE and DTZ are likely to have put a value of more than €12 million on Poppyfield in Clonmel, which is currently producing a rental income of about €1.198 million. As anchor tenant Woodies is paying €560,000 for a 3,901sq m (42,000sq ft) store. Super Valu contributes a further €156,000 for a 2,972sq m (32,000sq ft) unit, while Harry Corry pays €120,000 for a shop premises extending to 697sq m (7,500sq ft). Other retail occupiers include Carphone Warehouse, Meteor Mobile and Sam McCauley Chemist.
Four Lakes Retail Park, located just outside Carlow town, has had a challenging time after being launched just as the property market took a nosedive in 2008. It has eight units in all with an overall floor area of 10,565sq m (113,731sq ft). Four of them are currently let to PC World, Maxi Zoo and Army Surplus stores, while the drive-through restaurant at the entrance is rented by Supermacs. The overall rent roll is €323,521 and the various leases have an average of about 10.25 years to run.
Though the park occupies a prominent location along the Dublin road, the selling agents suggest that the four vacant buildings could suit alternative uses provided planning permission is forthcoming. Nama is expected to value the retail park at about €3 million.