DUTCH private investor has brought his Irish property portfolio to £20 million with the purchase of Longford Shopping Centre for about £2.9 million. The deal will produce a net yield of 8.8 per cent, which should show a significant improvement when the first rent reviews take place within three years.
The rent roll from the two-year-old centre is currently £288,000, but because the complex is located in a tax designated area, the new owner will also be able to claim annual allowances of £25,000 for the next 20 years.
The Limerick-based Tiernan Properties developed the shopping centre two years ago and sold the 50,000-square-foot anchor unit to Quinnsworth. The supermarket multiple has just received planning permission to provide an additional 15,000 square feet of space. A sister company, Penneys also trades out of the centre from a store of 30,000 square feet.
The sale involves 21 retail units with about 16,000 square feet. Average rents at around £20 per square foot would have been higher but the retail market was on the slow side when the shops were let. The tenants include Life-style, Kylemore, National Lottery and Spectra.
Liam Lenehan of Hamilton Osborne King handled the sale for Tiernan Properties. Patrick Curran of Harrington Ban non, who acted for the purchaser, said his client believed there were extremely good prospects for capital and rental growth. Another reason for opting for the investment was the long leases available in Ireland in comparison with the short leases on the Continent.
Tiernan Properties is one of three shareholders in a company developing a new £25 million shopping centre in Athlone, Golden Island Shopping Centre, which is due to open this autumn.
The same Dutch investor and a partner have paid £1.7 million for a newly developed warehouse of 26,000 square feet at Swords Business Park in north Dublin. The unit, which includes 9,000 square feet of offices, is rented by Frans Maas, the worldwide freight distribution company, under a 25-year lease.
The current rent of £180.000 will produce a gross yield of 8.25 per cent for the investors. The rent works out at £6 per square foot on the offices and £5 on the warehouse space.
Frans Maas has a five-year option on an adjoining site of 1.4 acres, where there is planning permission for an additional warehouse of 25,000 square feet.
The company has paid £130,000 for the option. Julian Caplin of chartered accountants Caplin Meehan advised the vendor in this case.
