£12m-plus expected for Royal Liver portfolio

Six prime commercial property investments, including two buildings near the bottom of Grafton Street in Dublin, are to be sold by tender on behalf of Royal Liver Assurance Ltd. Agents Druker Fanning and Partners are handling the sale of the retail and office investments which are likely to make a combined price of over £12 million.

All six investments will be available in individual lots. They are the TSB building at 114 Grafton Street, the adjoining building also occupied by TSB and Spar; two retail buildings in North Earl Street, Dublin 2; three shops adjoining the Swan Centre on Lower Rathmines Road, Dublin 6, and an office building at South Mall in Cork. The sale is the most important of its kind for several years. It comes at the end of a year in which there have been relatively few high-class commercial investments on the market. The six buildings account for less than 10 per cent of Royal Liver's Irish property portfolio. All the properties are showing significant rental growth and capital appreciation after a particularly strong performance by the Irish property market over the past five years.

Royal Liver is taking advantage of the huge demand for investments to realise its gains and rebalance its portfolio. The fund continues to hold prime retail investments, including McDonalds in Grafton Street and the Royal Liver Retail Park off the Naas Road. It is thought likely that the assurance company will divert funds into third-generation offices. Though most funds are now opting for individual lot sizes of over £5 million, the two Grafton Street properties will still be of interest to a range of institutions keen to get a foothold on Dublin's premier shopping street. However, they will have to compete with private investors who frequently settle for a lower yield than the funds. Five of the six properties to be sold by tender on January 21st have single tenants, the exception being the Cork office building which is multi-tenanted.

The two adjoining Grafton Street buildings are held by TSB Bank on long leases. Number 114, a sandstone building with over 2,500 sq ft on the ground floor, is currently producing a rent of £145,000 per annum. The adjoining building, 115, is rented at £115,000 but the TSB has sublet the shop to Spar at £100,000 per annum. Both rents are currently being reviewed. When this exercise is completed, 114 is likely to be sold for over £3.5 million while the adjoining building is expected to make in excess of £2.75 million.

Royal Liver is likely to fetch at least £1.5 million for 26 North Earl Street, a three-storey over ground floor retail buildings which is let to Ann's Hot Bread at a rent of £78,000 per annum. The rent is due to be reviewed next September. At 8 North Earl Street, a corner shop is let to Golden Discs at a rent of £48,000 per annum. This investment should make over £1 million. The three shops at 268 to 274 Lower Rathmines Road are let to a Burger King subsidiary at a combined rent of £102,500 per annum. They shops, sub-let to McNally Opticians, First Active and Alan Hanna Books, are likely to make £14.5 million.

The 18,000 sq ft office building at 1 South Mall is currently producing rents of £155,000 from Royal Liver, Price Waterhouse, R & H Hall and Royal Sun Alliance. Some rents are due to be reviewed. The block should top £2 million.