Retail Park Investment Portfolio for Sale Guiding €162 million

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Savills and JLL have just been appointed on behalf of two separate vendors to bring “The National Portfolio” to the market.

The Portfolio comprises 5 well located retail parks. At over 1.1 million sq. ft. the National Portfolio will represent the largest Irish real estate opportunity to come to the market in terms of its overall floor area. The portfolio will be available in 3 lots.

Lot 1 is the highly successful Nutgrove Retail Park in Rathfarnham, South Dublin. Lot 2 includes four major regional schemes namely Letterkenny Retail Park, Sligo Retail Park, Tullamore Retail Park and Deerpark Shopping Park in Killarney while Lot 3 comprises the entire National Portfolio.

The quoting price, excess €162 million, equates to an initial yield of approximately 7.2% and is expected to attract significant levels of interest from domestic and international investors looking for value-add investments in an ever improving retail landscape. The current annual gross income across the entire Portfolio is approximately €12.2 million per annum and offers an attractive WAULT of approximately 10 years.

The portfolio provides substantial scale with over 1.1 million sq. ft. of predominantly retail space spread across five assets. This offers a significant opportunity to an investor for collective asset management opportunities.

The Portfolio

Nutgrove Retail Park is for sale on the instructions of Simon Coyle of Mazars. The scheme is located off Nutgrove Avenue in Rathfarnham, approximately 7 km south of Dublin city centre and 5 km from the M50 Motorway.

The retail scheme comprises approximately 195,000 sq. ft. including 57,000 sq. ft. of office and leisure facilities on upper floors. Nutgrove is currently producing a total rent of approximately €4.1 million per annum with 76% of this income secured by Homebase, Harvey Norman and Aldi. The scheme, which has full occupancy of all retail units, offers an attractive WAULT of approximately 13.9 years.

The highly successful retail park is adjacent to the Nutgrove Shopping Centre and within 200m of the Nutgrove Retail Centre in an area which attracts significant volumes of customers.

Nutgrove Retail Park is being offered for sale as one of the lots with an attractive guide price in excess of €62 million which equates to an initial yield of approximately 6.33%. It is envisaged that this asset will attract the attention of some of the active institutional buyers currently in the Irish market given its quality and lot size.

Deerpark Shopping Park which is also for sale on the instructions of Simon Coyle of Mazars is in the heart of the busy tourist destination of Killarney. The park extends to an overall area of approximately 140,000 sq. ft. and is one of a few retail parks in Ireland with open retail use. Furthermore, the combination of bulky goods and importantly open retail use increases the potential occupier mix for investors.

The scheme is currently anchored by Homebase, Marks & Spencer and Arcadia Group and is adjacent to Tesco Superstore and Aldi. Deerpark is producing an annual rent of approximately €1.55 million and has a WAULT of approximately 4.4 years.

Killarney is a popular tourist destination and according to Tripadvisor, the town is Ireland’s most popular travel destination for 2015, placing it 23rd in Europe.

The remaining three schemes within the portfolio include Letterkenny Retail Park, Sligo Retail Park and Tullamore Retail Park and these are being offered for sale on the instructions of Kieran Wallace and Patrick Horkan of KMPG.

Letterkenny is the largest of the retail parks within the National Portfolio extending to approximately 380,000 sq. ft. in the four phases with 38 units. Similar to Deerpark, this scheme has the benefit of open use retail.  It provides an offer equivalent to a large shopping centre with a strong line-up of fashion tenants including H&M, New Look, River Island, Menarys and TK Maxx. The scheme provides the retail heart of Letterkenny and is the dominant retail offer in the north-west of Ireland and into parts of Northern Ireland.

Other leading occupiers include Marks & Spencer, Homebase, Boots, Argos, Halfords and Smyths.  The scheme also benefits from Dunnes Stores, McDonalds and Lidl which are not part of the sale.

Letterkenny Retail Park is currently producing €3.06 million per annum which is set to increase on expiry of H&M rent free period. The scheme offers an attractive WAULT of over 9 years.

Sligo Retail Park offers the opportunity to invest in a busy retail development which benefits from a strong tenant line up with scope to increase income through letting vacant units. The scheme which extends to approximately 260,000 sq. ft. ground floor provides 15 retail warehouse units and a cluster of 3 food units at the entrance to the park.

The scheme is anchored by Homebase with over 9.5 years unexpired and also includes well known tenants such as Halfords, Homestore & More, Currys, PC World, Harry Corry, Smyths Toys and Mc Donalds. The total current rent is €2.05 million per annum and provides and overall WAULT of 8 years.

The park is exceptionally well located just off the main N4 Dublin to Sligo road and within easy reach of the centre of Sligo.

Tullamore Retail Park is a modern retail park inside the N52 ring road less than 5 minutes’ drive from the centre of Tullamore. Tullamore Retail Park, which extends to approximately 170,000 sq. ft. ground floor. The Park is bookended by Heatons Department Store and Woodies with 7 retail units on the linking parade and a standalone Burger King restaurant in the car park. Other tenants include Argos, DID Electrical, Minogue Furniture and Harry Corry.

Within the car park there is also a Tesco Petrol Filling Station and the scheme shares a common entrance with a large Tesco Extra Format store.  The total rent is €1.47 million per annum with an overall WAULT of 10.7 years.

The guide price for the four regional schemes (Letterkenny, Sligo, Tullamore and Deerpark) which form Lot 2 of the portfolio is excess of €100 million which equates to an initial yield of approximately 7.78%.

Domhnaill O’Sullivan comments “This is an excellent time to invest and acquire retail in scale while rental levels are recovering on the back of improving consumer sentiment. As a retail park portfolio, there are significant synergies in terms of dealing with existing tenants across multiple schemes and more importantly new tenants looking to access the market.”

John Moran of JLL comments:  “The scale of this sale gives investors scope to establish a significant retail park platform in Ireland and to benefit from the rental growth prospects we anticipate in the retail market.”

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