With private investors scouring the market for well located commercial properties, there is likely to be strong competition for two excellent retail buildings going for sale in Dublin and Galway.
Hibernian Group expects to secure around £1.2 million (€1.52m) for The Sweater Shop, at 9 Wicklow Street, Dublin 2, while in Galway, a price of over £1.7 million (€2.16) is being quoted for two adjoining retail units beside the Brown Thomas store at William Street in Galway.
These are precisely the type of solid investments being sought by business and professional people at a time when interest rates are falling to historically low levels and the equity markets are still experiencing considerable uncertainty.
While commercial investments under £5 million (€6.35m) have been slow to come on the market this year, there is a general expectation that supply will increase quite significantly in the new year as life funds offload some of their properties to facilitate investors wanting to cash in their property bonds. This is likely to happen once the quarterly revaluation of properties takes place in January, according to some agents.
Palmer McCormack is handling the sale of the single-let Wicklow Street building which is producing £43,000 (€54,600) per annum. It is for sale by private treaty. At that asking price, investors would get a net initial yield of 3.31 per cent but this would almost certainly move to 6.05 per cent when the rent is reviewed next August. The 35-year lease runs from 1982 and provides for a personal guarantee. The four-storey over basement building has 2,558 sq ft of floor space including 912 sq ft on the ground floor.
The Galway property has a superb location along the busiest stretch of the pedestrianised William Street. The two retail units and overhead accommodation are producing a combined rental income of £88,200 (€1,119,90).
Tony Joyce of local agents O'Donnellan & Joyce is to auction the investment in one or two lots on November 23rd.
The main building is rented by Dublin Wholesale Manufacturing Jewellery, which trades as Lazlo Jewellers.
The current rent of £61,200 (€77,708) is expected to rise to close to £100,000 (€126,973) when it is reviewed next July.
The well-kept building has a combined area of 1,645 sq ft which includes 540 sq ft at street level.
The second retail unit trades as an upmarket shoe store and is rented at £27,000 (€34,282) per annum. There is a combined floor space of 1,097 sq ft including 538 sq ft at street level.
