UK-listed retailer Sports Direct is understood to have quietly sold its flagship premises on Dublin's North Earl Street for about €20 million.The off-market sale-and-leaseback deal comes three years after the property's purchase for a reported €12 million, earning the company a multimillion euro profit.
Under the deal, Sports Direct will continue to occupy the property, paying the purchaser, an unnamed investor, an average annual rent of €950,000 for 15 years from February 2019.
The retailer has the option to break the lease after 10 years, subject to one year’s notice, with rent reviews to take place every five years.
The premises has a gross internal area extending to about 4,491sq m (48,338sq ft) and occupies a valuable city centre site of about 0.16 hectares (0.4 acres) that enjoys frontage on to North Earl Street, Marlborough Street and Cathedral Street.
Given the sale price and annual rent, the new owner will enjoy a net initial yield of about 4.36 per cent.
The prime retail premises was occupied by department store Boyers, before it was closed down in January 2016 following an orderly wind-down of its operations by property developer Noel Smyth's Fitzwilliam Finance Partners.
The developer acquired the property as part of a deal in which he sold his 50 per cent stake in Arnotts to the Selfridge Group.
When Mr Smyth's company sought to sell the property, Sports Direct emerged as the successful purchaser, fending off competition that included Lidl and Aldi.
Heatons, which is controlled by Sports Direct, was the entity used to acquire the retail premises, with funding from its UK parent company according to company documents.
The sale of the property is understood to have only recently been completed.
The Registry of Deeds show the retailer's interest in the property was disposed of last week. At the time, Sports Direct's billionaire founder, Mike Ashley, was making headlines daily – initially in relation to his attempts to take control of struggling retail giant Debenhams, and subsequently in the aftermath of the company's collapse into administration.
Retail emerged as the second best performing sector in the first three months of 2019, according to BNP Paribas Real Estate’s latest investment market report.
More than €609 million was spent by investors during that period, with 15 retail deals accounting for €186 million of sales.
The sale of the Sports Direct premises and the recent sale of the retailer Next's flagship store on neighbouring Henry Street – those two deals are valued at more than €64 million – accounted for more than 10 per cent of the investment market.
Other notable retail deals included the sale of a 25 per cent stake in the Pavilions Shopping Centre in Swords, which was acquired by Irish Life for €71 million, and the sale of Royal Liver Retail Park for €25 million.
Aside from retail, offices remained the top performing investment asset class, with €283 million invested in the sector during the period across 13 deals.
The highest value transaction was the sale of Charlemont Exchange in Dublin 2 to Korean investors managed by Vestas Investment Management for €145 million.
Rented to WeWork, the offices are expected to show an initial yield of 4.5 per cent.