Two development companies planning to extend Grafton Street-style shopping into Nassau Street have just acquired additional buildings on Nassau Street to strengthen their hold on one of the best retail pitches in Dublin city centre.
London investors Meyer Bergman and the Dublin-based BCP International Property Fund have agreed to pay in excess of €13.5 million for five further Nassau Street shops running alongside the Morrison Chambers on the opposite end of Dawson Street.
The latest purchase will bring to 14 the number of shops owned by the new consortium along with 7,432sq m (80,000sq ft) of offices on the upper floors next to Grafton Street.
Meyer Bergman and BCP bought the first tranche of properties for €93 million last September with the intention of creating a range of large format stores with retail use on several levels.
International fashion retailers have been finding it increasingly difficult to rent large scale stores on Grafton Street or adjoining streets in recent years.
The exception has been the US’s most famous lingerie company Victoria’s Secret which is to replace BT2 later this year in one of the most prominent stores on Grafton Street.
Meyer Bergman and BCP purchased the latest row of shops from Ardstone Capital, an independent Irish property company, which bought the investment over two years ago for around €10 million. Savills advised the new owners.
The five shops at 1 Dawson Street and 27 to 32 Nassau Street are currently producing a rent roll of close to €700,000 which is due to rise further through a turnover top-up agreement.
The shops are at street and basement levels and have a combined floor area of 1,068sq m (11,500sq ft).
Portfolio
The portfolio includes the landmark former banking hall, Morrison Chambers, which has a handsome entrance right on the corner of Dawson Street.
Costa Coffee is renting the ground floor, paying a base rent of €100,000 as well as 15 per cent of the gross turnover after the rent has been discounted.
The upper floors of Morrison Chambers are mainly used as offices and are separately owned.
The main income producing shop included in the sale is operated as a food outlet by KC Peaches (Ireland) Ltd at a staggered rent which was due to rise to €200,000 by last month.
The company's 15-year lease includes a break option in 2018. Both KC Peaches and Costa Coffee benefit from their trading positions beside the busy side entrance to Trinity College.
The three other buildings included in the sale are Trinity Sweaters which pays a rent of €105,000, Trinity Crafts (€80,000) and Kevin & Howlin (€60,000).
The new owners can expect a yield of around 5.25 per cent on their latest purchase.
