These centers had a pre-property-crash valuation of between €400 and €450m.
It is expected that overseas funds will show interest in this deal as it is an excellent investment opportunity in the provincial retail market that is improving.
The centers in the portfolio are spread across six counties and include MacDonagh Junction in Kilkenny, Athlone Town Center, Tipp Town Centre in Tipperary, Gorey Shopping Center in Wexford, Orwell Shopping Center in Templeogue and Westside Shopping Center in Galway.
The new owners could expect a net return of around 7.34%, based on the rentals of €8.8m and a purchase price of €115m.
JLL research indicates that the Irish Property Index shows an increase in retail capital values, which has resulted in a rise of 32% since the property collapse. However, it remains 58% below the market peak, which means it is at a turning point in its cycle.
The Athlone Center is responsible for 60% of the portfolio and is expected to sell for slightly above €61m, although it was previously valued at more than €300m. It is expected to obtain another €13m from the apartments based alongside the center. The apartments currently produce rental income of around €1.3m. The net rent roll of this center is €4,866,746, and it is due to increase during the latter part of the year with the occupancy of TK Maxx.
The center is currently anchored by Marks & Spencer, and includes tenants such as Zara, Topshop, River Island, Next, Tommy Hilfiger and H&M. The Athlone Center opened during 2007. It has 66 individual stores, comprising a floor space of 1950m², with several external offices and shops.
It is understood that JLL have placed a value of about €17m on the 50% share of the main arcade at McDonagh Junction, and full ownership of several offices and stores on site. The center opened prior to the crash during 2007 and currently receives rental of more than €3.1m. Of this amount, €1,250,000 will be payable to the new joint owner. The center is anchored by Dunnes Stores, who own the premises they occupy. Other tenants include River Island, H&M, Next and TK Maxx.
Dunnes Stores is the anchor for two of the other centers in the portfolio, Tipp Town and Gorey.
Gorey has 24 stores, with an overall floor space of 3251m². Tipp Town boasts nine retail units in a space of 1835m². The rental income at Gorey is €708894, with a valuation of €8m. Tipp produces rental of €169833 and is valued at around €2m.
The only Dublin center in the portfolio is the Orwell Shopping Center, located in Templeogue. It produces rental income of €540000. The Horkan Family’s Supervalu, along with its other two rental stores, account for €320000 of this income. The center has a 100% occupancy rate, with an average weighted lease period of 12.6 years. The Orwell has been valued at €6.5m.
John Moran from JLL agents is marketing the portfolio on behalf of Stephen Tennant and Paul McCann from Grant Thornton, the appointed AIB receivers.
