Monday 23 April 2018

Cavan cinema and retail development goes on the market for almost €2m

Bannon are quoting €1.95m plus VAT for this retail development in Cavan
Bannon are quoting €1.95m plus VAT for this retail development in Cavan
Peter Flanagan

Peter Flanagan

BANNON and Crotty Auctioneers are seeking just under €2m for a cinema and retail development in Co Cavan.

The Townsparks in Cavan Town has been put on the market with a sale price of €1.95m excluding VAt.

At that price, the property would carry an initial yield of some 15pc.

The building is located in the retail core of the Town and has direct access to the Town Centre car park.

The property has a contracted rent of €292,876 per annum and is anchored by The Odeon Cinema which occupies 1,568 sq m and accounts for just over a quarter of the scheme's total contracted rent.

In addition to the cinema the property has four individual retail units and bowling alley all of which are occupied and leased at an annual rent of €213,645.

Dealz, the UK discount retailer, account for another 22.5pc of the schemes income.

Several high profile occupiers are adjacent to the development, including Tesco, Dunnes Stores and Boots.

This is the latest in a number of provincial retail developments which have come to the market in recent weeks, as owners begin to divest.

In April, NAMA put on the market three shopping centres with an asking price of €130m.

The "Acorn Portfolio" includes Blackpool in Cork, Balbriggan, Co Dublin and Clonmel, Co Tipperary. million. At that valuation, the portfolio will show an initial yield of about 9.5pc.

A number of international investors are thought to have shown interest in that portfolio.

Meanwhile UK lender Lloyds is understood to be preparing to sell the Bloomfield shopping centre in Dun Laoghaire, the Douglas Court shopping centre in Cork and part of Eyre Square centre in Galway.

Lloyds financed the shopping centres during the boom but is now off loading its "non-core" assets, including most of the property it controls in Ireland.

While a final sale date has yet to be agreed on, the properties are expected to be formally put on the market before the end of next month.

Any sale is likely to cost Lloyds. The bank will likely have to offer the centres at a significant discount to the original value of the loans if it is to find a buyer quickly.

He also reports that all the shopping centres close to the M50 including The Square in Tallaght are currently well let or practically fully occupied.

However some provincial town centres are suffering badly. CBRE's latest survey of high street retail vacancy shows that five out of the nine towns surveyed still suffer from double digit levels of ground floor vacancy.

Kilkenny was the only major urban centre to show a contraction in ground floor high street vacancy in Q1 2014 compared to Q3 2013.

Tourism appears to be a key factor as towns such as Killarney, Galway and Kilkenny experience the lowest levels of ground floor vacancy on their high streets, ranging from 2pc to just over 3pc in Q1 2014.

In the high streets of Belfast, Sligo, Cork and Limerick, vacancy levels ranged from 12.3pc to 16.3pc but Athlone's was as high as 21.6pc. In Dublin it was 8.3pc.

In Dublin, there have been a slew of major deals including the sale of Liffey Valley shopping centre.

At a lower level, individual units are being sold at secondary retail developments around the country.

Three units at a shopping centre in west Dublin were recently put on the market with a combined value of close to €300,000.

Those are located at the community shopping centre in Bawnogue, Clondalkin.

In Dublin, some Grafton Street rents are as much as 60pc below their 2007 peak.

She cites the recent lease for McDonald's fast food outlet at 10 Grafton Street for which the annual rent will be €600,000, equating to a Zone A rent of approximately €4,843 per sqm.

Numerous retailers have received sharp rent reductions in recent months, with some having their rent cut by as much as half by moving premises on the street.

On Henry Street, the drop in rents has been as much as 70pc since the crash, although rents are beginning to stabilise now after five years of steady falls but there scope is seen for strong growth inthe weeks ahead. Shopping activity has increased in the past year, say analysts.

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