The Telecom Eireann Superannuation Pension Fund is to prefund most of the retail warehousing to be developed alongside Liffey Valley Shopping Centre at Quarryvale in west Dublin. The fund is paying in excess of £45 million for 170,000 sq ft of warehousing which will be divided among 12 leading retailers. The rent roll is expected to be between £2.75 and £3 million, equating to a yield of around 6 per cent per annum.
Joint developers, Grosvenor Estate Holdings and O'Callaghan Properties, have planning permission to build 309,000 sq ft of retail warehousing near Coldcut Road, about 150 yards from the shopping centre, which is trading exceptionally well since it opened at the beginning of October. It is understood that letting terms have been agreed on eight of the 12 units being financed by the Telecom fund. The names of the tenants are not to be announced for some time but are likely to include PC World, Currys, Smyths Toys, Harry Corry, Textile World, B & Q and Atlantic Homecare.
Swedish home furnishings group IKEA is also known to be interested in renting a unit -its first in the Republic - but as it is looking for a store of 100,000 sq ft, the promoters may prefer a variety of tenants rather than one. Construction work is due to begin by the end of the year and the first units will be ready for fit out by next autumn. Hamilton Osborne King is already involved in negotiations to lease the second phase of the retail park, which will have over 100,000 sq ft on part of the site. Telecom's investment is the largest ever in retail warehousing by an Irish pension fund. With retail parks still in their infancy in the Republic, there have been few opportunities for institutions to buy into retail warehousing. Dublin's two other retail parks at Naas Road and Blanchardstown were developed and held by Royal Liver and Green Property.
Not surprisingly, several institutions had targeted the Liffey Valley development but Telecom's agents, Druker Fanning and Partners and Healey and Baker, moved fast to gain exclusive negotiating rights.
Liffey Valley will expect to emulate the success of Blanchardstown Retail Park, which has strengthened the appeal of the town centre. Green Property has completed 77,000 sq ft at Blanchardstown and is currently building 190,000 sq ft, to be completed next February. Eleven of the 13 units have been let and the first of them, with 5,500 sq ft and let to Time Computers, is being fitted out.
