Irish Life seeks €15.75m for JD Sports’ Irish distribution centre

Less than two years on from securing JD Sports as tenant on a new long-term lease at unit 35 Rosemount Business Park in Ballycoolin, Dublin 15, Irish Life Investment Managers (ILIM) has instructed agent CBRE to find a buyer for the property. The facility, the first dedicated Irish distribution centre to be operated by the UK-headquartered sportswear retailer, is being offered to the market at a guide price of €15.75 million.

Unit 35 comprises a 91,186sq ft GEA (gross external area) logistics centre on a 1.99-hectare (4.91-acre site). The subject property, which was occupied previously by office supplies specialist Office Depot (formerly Viking Direct), underwent a substantial refurbishment in 2021. The refurbishment which included energy-efficient upgrades, ventilation-system upgrades, fire-safety upgrades and an upgrade of the office area brought the property’s Ber rating from a lowly D2 to a B1 in advance of JD Sports taking occupation. Unit 35 has a clear internal height of 10.53m, four dock levellers and four grade doors, with yard depths ranging from 40 to 48m.

The property is let to JD Sports Fashion Ireland Limited, with a parent guarantee from JD Sports Fashion PLC, on a 15-year lease from September 2021 with a 10-year break option. The sale offers the prospective purchaser annual rental income of €866,267 (€9.50 per sq ft) with about 8½ years to the break option, along with the added benefit of CPI-linked rent reviews with a cap-and-collar of -1 per cent to 2.5 per cent annually.

JD Sports is one of the world’s leading omnichannel retailers of sports, fashion and outdoor brands. The group operates in 3,400 locations in 32 regions and boasts a significant presence in the UK, Europe, North America and Asia Pacific. Unit 35 Rosemount Business Park supplies approximately 40 stores on the island of Ireland, and the e-commerce operation that serves the Irish market.

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Beside motorways

Rosemount Business Park in Dublin is an established logistics park. It is in a primary logistical corridor in Dublin offering immediate access to the M1, M3, and M50 motorways, Dublin Airport and Dublin Port Tunnel.

Should Unit 35 transact at its €15.75 million guide price, the prospective purchaser would be in line for a net initial yield of 5 per cent.

Dublin’s industrial and logistics market continues to be challenged by an undersupply of modern, available stock.

Following a 9.5 per cent rise in 2022, prime Dublin rents have increased to €123.80 per sq m (€11.50 per sq ft), and now stand at €130 per sq m (€12 per sq ft) as of the end of the first quarter in 2023. With the cost of construction materials continuing to rise and with demand continuing to outstrip supply, agent CBRE says it expects to see further upward pressure on rents this year and beyond. The market vacancy rate stands at about 1.3 per cent.

Commenting on the sale of unit 35 Rosemount Business Park, Will Heffernan of CBRE’s capital markets team said: “This is a significant opportunity to acquire a leading logistics investment. JD Sports is one of the world’s largest sporting retailers, and with 35 Rosemount Business Park’s considerable refurbishment in 2021, the property is now sustainably futureproofed providing a B1 BER.”