Limerick portfolio a shot in the arm for static regional market
Published 15/06/2014 | 02:30
A PORTFOLIO of commercial properties in Limerick has hit the market in what will be one of the most closely watched sales in the sector there.
BNP Paribas Real Estate have been retained as agents along with Rooney Auctioneers of Limerick for the City Central portfolio in the city.
It includes the Savoy Hotel in the centre of Limerick along with the City Central Residences and another six retail units.
The portfolio is being sold on the instructions of the receiver William O'Riordan, from PwC.
The portfolio is being offered in three lots, according to BNP's Peter Flanagan.
Lot one is the hotel, which BNP are guiding for around €3.75m, while the apartments and retail element of the portfolio make up the second lot, which should attract a price of €9.75m.
The apartments and the shops are currently producing an annual rent of €1.235m, which equates to a gross yield of 12.12pc.
The tenants of the retail units will not be affected by the sale.
The Savoy Hotel comprises a five-Star, 94-bedroom hotel that was completed in 2007 and originally traded as a Marriott-branded Hotel after it opened.
The hotel has five junior suites and 89 bedrooms, which come in a mix of double and twin rooms.
There is also a bar and restaurant at ground floor level, and a lounge area and two private lounge areas at first floor level.
In addition, there are 10 meeting rooms at second floor level and a leisure centre at basement level.
The City Central Residences, on the other hand, comprise a wholly owned apartment block with 84 units producing a gross rental income of around €660,000 per annum.
The retail units of the investment lot are made up of six modern and high-profile retail units, which are accessible from Bedford Row and Henry Street and produce a combined rental income of €575,000 per annum.
The final lot covers the entire portfolio, which has been given an asking price of €13.5m.
Gordon Kearney, from Rooney Auctioneers, commented: "The sale of the City Central portfolio presents an opportunity to acquire a modern city centre investment portfolio alongside a purpose built hotel of five- star quality.
"The portfolio is best in class in terms of investment and hotel opportunities in the midwest region".
The hotel was built by the Fordmount Property Group in 2007, but that construction company fell into receivership, along with two of its subsidiaries, in late 2009, reputedly with liabilities estimated at €200m.
The sale of this portfolio is likely to be closely watched because it is one of the few major regional commercial portfolios to come to the market in recent years.
There has been huge interest in major hotels and other large developments in Dublin, especially from overseas investors.
As yet, though, that interest has yet to translate into solid purchases in the provincial markets from those same investors.
As a result, few major developments in a "walk in" condition have come to the market so far. But as shown by this opportunity, that situation could be finally beginning to change.
The success or otherwise of the City Central portfolio will find itself viewed an acid test to asses the state of the investment market away from the capital.
Sunday Indo Business