Neighbourhood shopping centre sells over guide price
A private Irish investor has purchased Orwell Shopping Centre in Templeogue, Dublin 6W, for about €7.8m, which was in excess of the €7.5m that was guided by agents CBRE.
The fully let neighbourhood centre is anchored by SuperValu and produces a net rental income of €537,000, which suggests a gross initial yield of about 6.9pc and a capital value of about €326 per sq ft.
Sandra Walsh, of sales agents CBRE, said that there was strong interest from both private investors and real estate companies, including those who were attracted by its development potential.
"The level of interest showed that there is demand for retail investments which have good covenants and tick the boxes for investors," she added.
SuperValu's accommodation includes its 7,883 sq ft ground-floor store and 6,780 sq ft of offices on the first floor. It has traded very strongly as the centre's anchor and has a weighted average lease period (WAULT) in excess of 11 years across a number of leases.
In all, Orwell Shopping Centre's combined floor area extends to 2,216 sq m (23,853sq ft) spread among nine fully rented retail units with WAULT of 9.2 years to run on a number of leases.
The mix of tenants is complementary to the anchor and includes a pharmacy, butchers, hairdresser and newsagent. SuperValu accounts for almost half of its rental income. Its income includes €31,800 from two telecoms masts.
Ms Walsh also says that the centre has strong reversionary potential, which should further enhance the medium-term return profile for the purchaser.
Most of the centre is single storey situated on a large site with a generous car park which provides about 95 surface car parking spaces. Consequently it is considered to have development potential subject to planning permission.
The SuperValu section is the only part that is two storey, while the parade of other retail units is single storey. A current planning permission until 2020 allows for the extension of the scheme to increase the retail space at ground-floor level and provide additional office space at first-floor level.
Surrounded by large housing estates such as Templeogue Wood, Glendown and Cypress Downs, Wellington and others, this busy local shopping hub benefits from an immediate catchment population of mainly middle-income families. The development is situated around 8km south-west of the city centre and about 6km from Tallaght. The area is very well connected by a number of bus routes and is less than five minutes from the M50 motorway, providing connectivity throughout Dublin.
Ms Walsh also pointed out that there is no direct competition within the immediate area. "The tenant mix and 100pc occupancy demonstrates how the centre meets the needs of its catchment," she added.