Dublin-based Corporate Finance Ireland (CFI) is seeking to put together a syndicate of investors to buy the Athlone Town Centre (ATC) for €345 million.
CFI is seeking to raise €100 million from private investors, with Anglo Irish Bank providing €245 million in bank debt.
The financier is offering 300 shares in ATC under a co-ownership structure, with a minimum investment period of 13 years.
A document circulated to interested investors notes that Bank of Scotland is willing to offer loans for part or all of an individual's equity contribution.
Investors are being asked to stump up €333,333 as equity and to make annual payments of €33,333 to Anglo in each of the first six years to help pay down the bank debt.
The cost of these annual payments will be offset by substantial capital allowance tax breaks attaching to ATC.
CFI has highlighted the potential for tax breaks, and is also promoting it on the basis of Athlone's central location in the midlands and its potential for growth as a gateway under the National Spatial Strategy.
The retail complex will be one of the biggest outside Dublin. Property group Jones Lang LaSalle is advising on the deal.
ATC is due to open on October 18th, and is being built by Kerry-born property developer John O'Sullivan and accountants Jim Keane and Tom Donohue, who are partners in the Russell Browne and Keane accountancy practice.
The retail complex has attracted a number of leading retailers, including Marks & Spencer, Next, Zara, Eason, H&M and Elverys Sports.
It will have an annual rent roll of €11.7 million. Rents will be reviewed every five years, and increase at each review by 4 per cent a year compound.
ATC is expected to produce an initial yield for its backers of 3.9 per cent without tax allowances.
The town centre will comprise 225,000 sq ft of retail space in 67 units covering two internal streets and a central plaza. It will also have access to 740 car-parking spaces.
The investment is being structured as a co-ownership agreement. This gives the bank the ability to sell the entire property in the event that any one co-investor is in default of their loan obligations.
The property will be managed by Glenrye Properties Services Ltd, which also manages the Dundrum Town Centre, Nutgrove in Rathfarnham and The Square in Tallaght. A management fee of 6 per cent of the rents received will be charged.
According to the documentation circulated by CFI, 72 per cent of the cost qualifies for capital allowances, amounting to an estimated €247 million in total.
Investors will be able to avail of capital allowances estimated at €823,333 over the lifetime of the investment, of which half will be available in 2007. The interest rate on the loan has been fixed for 10 years at 4.95 per cent.
ATC is part of a €500 million commercial development being led by Mr O'Sullivan, including a 167-bed Sheraton hotel and 145 residential units.
