£14m for Dundrum centre
Less than four months after selling Dun Laoghaire Shopping Centre for £20 million, Ireland's largest pension fund is also to dispose of Dundrum Shopping Centre in Dublin 14.
The sale comes weeks after a planning application was lodged for a rival shopping centre at the opposite end of the village.
Although agents Jones Lang Wootton are not quoting a guideline price at this stage, the investment is likely to make about £14 million when it is sold by the Irish Pension Fund Property Unit Trust (IPFPUT).
At this price, new owners would get an initial yield of 5.4 per cent. However, the return would rise to 6.6 per cent once a round of rent reviews are carried out mainly in November of next year.
The centre is currently producing £805,148 from 38 traders.
The rent will rise to £816,000 when one vacant unit at first-floor level is let and will increase further to around £1 million when next year's reviews are completed.
The principal anchors, Tesco and Penneys, account for nearly one-third of total income. Their leases have about nine years to run. The other main tenants include Ulster Bank, Bewleys, Lifestyle, A-Wear and the EBS Building Society.
The Dundrum centre was developed by businessman Charlie Kenny in 1971 and sold to IPFPUT six years later. It has 90,247 sq ft of retail space on two levels, comprising a supermarket, department store and 35 shop units. There is also a three-storey office block with 6,270 sq ft and surface parking for 350 cars.
The centre has produced a handsome return for IPFPUT over the past 21 years and continues to trade exceptionally well. The new owners will almost certainly enlarge the centre to capitalise on its position as the focal point of Dundrum town centre. The complex occupies a site of 4.2 acres which has frontage on to the main street and will also face on to the Dundrum relief road when it is completed by the year 2002.
The shopping centre is located in the heart of a huge middle class community which has seen its spending power increase significantly over the past few years.
The main town centre in Dundrum will be greatly expanded if planning permission is secured for a £190 million complex proposed by Castlethorn Construction. The company plans to build a 350,000 sq ft shopping centre, of which Crazy Prices will occupy 45,000. However, the Minister for the Environment has blocked the development of any supermarkets over 32,000 sq ft until an expert committee examines the long-term implications of allowing any further large scale developments of this kind.
The planning application for Dundrum also includes a 150-bedroom hotel, a multiplex cinema, a range of leisure and social facilities and a multi-storey car-park for 3,000 cars.
IPFPUT plans to retain its two other shopping centres, Roselawn in Castleknock, Dublin 15, and Wilton in Cork. A plan to expand the Cork centre is currently under appeal with An Bord Pleanala.