Friday 23 March 2018

Joe O'Reilly set to 'run the rule' over Liffey Valley in €600m sale

The west Dublin mall is expected to attract significant interest from international investors
The west Dublin mall is expected to attract significant interest from international investors

Ronald Quinlan Commercial Property Editor

The Liffey Valley shopping centre in west Dublin is set to go on sale with an asking price of at least €600m following the appointment by its owners of Eastdil Secured LLC to broker the transaction.

The decision by the centre's owners - a consortium comprising US real estate investor Hines, the Grosvenor Group Ltd and HSBC Alternative Investments - to put it on the market comes weeks after its near neighbour, the Blanchardstown Centre, was sold to US private equity giant Blackstone, or €950m.

It also follows the recent completion by UK property group Hammerson and its joint venture partners, German insurers Allianz, of their €1.85bn acquisition of the Dundrum Town Centre and other major retail assets from developer Joe O'Reilly's Chartered Land.

While Liffey Valley is expected to attract significant interest from international investors, the Irish Independent understands that a number of Irish developers will be exploring the possibility of submitting a bid once it is offered formally for sale.

A source familiar with the matter said they would expect developer Joe O'Reilly to "at least run the rule" over Liffey Valley given that Chartered Land had partnered Morgan Stanley Real Estate Investing on an unsuccessful bid for the Blanchardstown Centre.

A spokesman for Chartered Land declined to comment.

And while the Dundrum Town Centre's new owner, Hammerson, is not expected to make a bid for the west Dublin mall, the possibility cannot be ruled out entirely given the quality of its tenant base, the strength of its performance and the untapped potential of its adjacent 17.3 acre parcel of development land.

Asked in a recent interview with the 'Sunday Independent' if Hammerson was considering further Irish acquisitions beyond its purchase of the Dundrum Town Centre and 50pc stakes in the Ilac and Pavilions shopping centres, company CEO David Atkins said: "Not currently. Obviously [we're] very much focused on taking ownership and management of the current portfolio and then taking forward the very substantial development which will require further capital over the coming years.

"We remain open-minded to other opportunities, but I think for the time being, our focus will be very much on this portfolio," Atkins added. Acknowledged as one of Ireland's foremost shopping centres, Liffey Valley enjoys impressive occupancy levels of 98pc.

It boasts major brand names including Marks & Spencer, Next, Dunnes Stores and Boots among its anchor tenants.

The centre, which sits in a pivotal position at the interchanges of the M50 motorway and N4, has a further 63 stores, four restaurants and a 2,500-seat Vue cinema.

The centre is expected to experience an increase in its rent roll later this year once Penneys commence trading from a new 50,000 sq ft anchor store alongside six new restaurants. Penneys is expected to deliver rental income for the centre of nearly €1m alone.

While the Grosvenor Group, which was one of Liffey Valley's original developers, owns 27.2pc of the centre, HSBC's Alternative Investments and Hines only acquired their 72.8pc stake in February 2014, paying Aviva €253m in the process.

The deal, which included the purchase of development lands with an estimated value of €15m saw Liffey Valley being afforded an overall value of €347.5m.

Irish Independent

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