Consortium pays £5m for shops in centre

 

A BUSINESS consortium has paid slightly more than £5 million for about half of the newly-developed Bridge Shopping Centre in Tullamore, Co Offaly.

The deal will provide the six businessmen concerned with a valuable tax shelter and a yield of 8.3 per cent.

Meanwhile, another consortium has pulled out of negotiations to buy the Virgin cinemas opposite the ILAC centre at Parnell Street, Dublin 1, because of a disagreement over who should manage the complex.

The consortium was to have paid over £4 million for the cinemas, which are rented at £350,000 per annum.

Several groups were in contention for part of the Tullamore centre which will produce an initial rent roll of £420,000 per year.

The development has 100 per cent capital allowances because the site was first designated, for urban renewal under a previous scheme rather than the current one which offers only 50 per cent allowances.

The consortium, which has bought 20 shops on the ground floor with a total retail area of 30,000 square feet, will be able to claim £4.25 million in capital allowances.

The tenants, who are all on 25-year leases with five-year rent reviews, include Vero Moda, Benetton, Stanley Newsagents, Poundworld, Dolans Chemist, Japan and Premier Sports.

Dunnes Stores, which is the anchor tenant in the centre, operates a second supermarket at the opposite end of the town.

The Bridge Centre includes a multiplex cinema, which is owned and run by Ward Anderson.

The remainder of the shopping, centre is owned by the developer, Christy Maye, whose other business interests include the Bridge House bar and restaurant in Tullamore and the Greville Arms Hotel in Mullingar. Mr May also operates a restaurant at first floor level in the Bridge Centre where, there is additional retail space available for letting.

Meanwhile, Sheridan Developments is understood to be in negotiations to sell the Virgin Cinemas to another group. The cinemas are trading exceptionally well and carry capital allowances of almost £2 million.

Agents report that the demand for investments with tax breaks was never as strong and supply never as scarce. Because of the high level of interest in these investments, yields have been falling steadily in Dublin, particularly in the Temple Bar area and the International Financial Services Centre where 100 per cent capital allowances are still available.

There has been a particular rush to sell investments in Temple Bar before the current tax year runs out on April 5th.

One agency has forecast yields will hit record low levels later this year.