Stephen’s Green Shopping Centre bought by Davy for €175m

Irish Life accepts offer for 37.6% stake, giving Davy full control of prime retail property

A fund managed by Davy Real Estate has paid a total of about €175 million for Stephen's Green Shopping Centre in Dublin.

The completion of the transaction in recent days gives the Davy investors full control of the shopping centre, following a period of nearly 13 years in which it had been owned jointly by several shareholders.

Davy Real Estate's acquisition of the property involved the purchases of three separate shareholdings held by Madison International Realty (35.4 per cent), businessman Pierce Molony (27 per cent) and Irish Life (37.6 per cent).

While the combined 62.4 per cent stake of Madison International and Mr Molony was offered for sale quietly in a targeted process by HWBC in June, it is understood Irish Life had, until recently, intended to retain its interest in the centre.


Unsolicited approach

That position is said to have changed, however, after an unsolicited approach from Davy in early November. Having agreed a deal for the purchase of the majority of the St Stephen’s Green retail scheme, Davy informed Irish Life of its interest in taking full control of the property. Following a period of discussions between the parties, Irish Life agreed to sell its stake.

While Irish Life’s decision to dispose of its shareholding brings to an end its longstanding association with Stephen’s Green shopping centre, it continues to hold significant retail interests within its immediate vicinity, with 23 shops under its ownership in the Grafton Street area.

This deal demonstrates that high-quality shopping centres in premium locations are attractive to investors

Stephen’s Green Shopping Centre was developed in 1988 by British Land. It has more than 90 shops over three levels with an overall floor area of 29,728sq m (320,000sq ft), and is currently producing rental income of about €8 million.

Additional space

As part of the sales process conducted by HWBC, potential investors were briefed on the centre’s capacity to accommodate an additional 18,580sq m (200,000sq ft) of space. The majority of this would be office space and built above the existing retail scheme.

Commenting on Davy Real Estate’s acquisition of the St Stephen’s Green scheme, Iain Sayer of HWBC said: “This deal demonstrates that high-quality shopping centres in premium locations are attractive to investors, notwithstanding the rise in online shopping. The centre maintains an attractive range of tenants and benefits from its proximity to Grafton Street. There is considerable scope for refurbishment and redevelopment under its new ownership.”

Agent JLL advised Irish Life on the sale of its shareholding in the centre.

Ronald Quinlan

Ronald Quinlan

Ronald Quinlan is Property Editor of The Irish Times