Dublin's thriving retail investment market is to get another shot in the arm with the planned sale of the Tesco store at College Green and the Knobs & Knockers building at the corner of Nassau and South Frederick streets.
Agent TWM is seeking in excess of €4.1 million for the Tesco Express outlet, which shares the six-storey over-basement block with IT Solutions. Close by, Melford Property Consultants will be looking for bids over €950,000 for the well-known Knobs & Knockers building, which has three upper floors of vacant office space.
The two sales come as estate agents report an increased level of inquiries from businesspeople and wealthy families looking for retail investments priced at less than €5 million in Dublin’s vibrant south inner city. Most properties are selling for well above the the guide prices because of considerable competition and the scarcity of investment opportunities.
Tesco pays a rent of €62,000 per annum for 386sq m (4,156sq ft) at ground and basement levels. It has break options in 2023 and 2028
Only last week Lisney secured €2.75 million at auction for the Nourish health food store at 16 Wicklow Street. The selling price was €350,000 – 14.58 per cent – above the guide price. The new owners will settle for a net yield of 4.19 per cent, according to Christopher Belton of Lisney, who handled the sale.
Spacious floors
The Tesco building will be much sought-after not only because of its spacious floors and high rental yields, but also its location opposite the former Central Bank, which is to be redeveloped to accommodate a range of fashion stores, offices, restaurants and cafes. Dublin City Council plans to pedestrianise and upgrade College Green and ban buses and taxis from the area look set to change much of the character of the city centre.
The Tesco building has an overall floor area of 938sq m (10,000sq ft) and brings in an annual rent roll of €222,000, offering the new owner a net initial yield of 5 per cent. At a €4.1 million valuation, the capital value will work out at €406 per sq ft.
Tesco pays a rent of €62,000 per annum for 386sq m (4,156sq ft) at ground and basement levels. It has break options in 2023 and 2028. Meanwhile, IT Solutions occupies 551sq m (5,941sq ft) on the five upper floors at an annual rent of €160,000. Both the tenant and landlord have break options in 2022.
Citing a shortage of investments of this calibre and lot size, Patricia Ward of TWM said she expects a high level of interest from both private and institutional purchasers. Commercial properties offering certainty and location confidence continued to attract capital.
Confident
Melford Property Consultants, set up five years ago by Andrew Watt and Aisling Leddy, is equally confident of attracting a high level of interest in the Knobs & Knockers building at the corner of Nassau and South Frederick streets. The four-storey over-basement has an overall floor area of 156.58sq m (1,686sq ft).
Knobs & Knockers pays a rent of €54,500 for 71sq m (7,65sq ft) at ground and basement levels. Overhead, and separately accessed on South Frederick Street, are three storeys of offices in need of upgrading but which would prove easy to let because of their prime location overlooking Trinity College.
The already strong footfall will be considerably strengthened by the planned redevelopment of many of the existing shops on Nassau Street and the lower part of Dawson Street.
