THE Bank of Ireland Pension Fund is seeking around £17 million for Merchants Quay Shopping Centre in Cork only eight months after selling Stillorgan Shopping Centre and three other properties in Dublin for £45 million.

Merchants Quay is not being advertised for sale at this stage, but according to well placed sources it has been offered to a number of institutions by Ian French of agents Hamilton Osborne King. Analysts are assessing the merits of the centre and particularly the opportunities for rental growth but an imminent sale is apparently unlikely.

The institutions are certain to focus on the reasons why rents have not kept pace with the upward movement in rental values throughout the country over the past few years.

The Cork centre was completed in 1989 and initially experienced trading difficulties because of the severe effects of the economic recession on Cork. The first rent review yielded only a nominal increase, no more than 5 per cent for some traders. However, with the city centre complex now trading strongly, the prospects for rental growth appear much brighter. Rents in Cork's main retail thoroughfare, Patrick Street, have been hardening in recent months and some agents expect them to move from £80 to £100 per square foot later this year. Even if rents hit the £100 mark, they will still be a long way behind Dublin's Grafton Street where some rents have risen to £190 per square foot.

Merchants Quay is currently producing a rent roll of £1.25 million from 45 shops which occupy 46,000 square feet of space on two levels.

The two main anchors, Dunnes Stores and Roches Stores, own their own units. Dunnes has 80,000 square feet, while Roches trades out of 120,000 square feet and also owns the integrated ear park with 800 spaces. Marks and Spencer is a major tenant which recently expanded its food hall to cater for an increasing volume of business. Its 60,000 square foot store on two levels was acquired over two years ago by Treasury Holding as part a larger portfolio of properties sold by Irish Life.

The Bank of Ireland Pension Fund is obviously anxious to avail of the current enhanced investment values to unload the Merchants Quay centre. As the largest single retail investment in Cork, it will only appeal to some of the largest institutions involved in the Irish market. It is also possible that two or three funds may come together to acquire it.

The Bank of Ireland Pension Fund is expected to seek out smaller retail investments as well as prime office investments if it finds a buyer for the Cork centre..

Merchants Quay has a strong line-up of tenants including Laura Ashley which is paying a rent of £130,000 for a 3,000 square-foot store at ground and first floor level.

Other traders include Adams, which is paying £95,000 for 2,400 square feet on two levels; Hayes Cunningham Robinson, paying £56,000 for 2,200 square feet; Vision Express, paying £55,000 for 2,000 square feet; Meadows and Byrne, paying £53,000 for 1,500 square feet; Hamburger Inn, paying £50,000 for 2,400 square feet; Thoughts, which is also paying £50,000 for 1,000 square feet; Knickerbox, paying £40,000 for 1,750 square feet and Paco's ladies fashion shop which is paying £30,000 for 600 square feet.

The Stillorgan centre was bought by Castle Market Holdings, a joint venture company between Treasury Holdings and the UK-based Jermyn investment bank. The portfolio acquired from the bank pension included the 30-year-old centre which has a rent roll of over £3 million, and the adjoining Baumanns' yard, which will make it easier to provide extra car parking. The package also included Blakes restaurant and two other restaurants on a 1.5-acre site which is rented at £209,000. A fourth element was an office block, Liffey House, in Tara Street, Dublin 2, which has since been sold to the tenants Dublin Corporation, for £3 million.