As the threat posed by the Covid-19 pandemic continues to recede, the sale of Galway city’s Eyre Square Shopping Centre is expected to see “solid demand” from international investors.
Developed originally by the McInerneys in 1991, the landmark retail scheme is being offered to the market by agent Colliers on behalf of US investment giant Marathon Asset Management at a guide price of €12.75 million.
While the overall scheme consists of more than 70 shops and kiosks, the sale itself comprises eight retail units and control of the centre together with the freehold common area units. The eight retail units boast a strong tenant lineup, including JD Sports, Great Outdoors, Specsavers, Diesel, Starbucks and Vero Moda. The units are currently producing rental income of € 869,200 per annum with a weighted average unexpired lease term of 6.24 years to break. The incoming investor will have an opportunity to immediately increase the rent roll on letting the two vacant units.
Rent roll
The common area units comprise a number of short- and long-term rolling licence agreements and include kiosks, store rooms, telecoms masts and general mall income. They are located over both floors of the centre and generate a current rent roll of €160,202 per annum. The units have had a consistently-high occupancy rate, according to the selling agent, with average income over the last five years of about €220,000 per annum. The kiosk operators include Café Express, Mark Twain and Over The Moon, with store rooms predominantly occupied by larger retailers who have a presence in the centre. The mast income is derived from a number of well-known mobile providers, namely Meteor Mobile, Esat Digifone and Vodafone.
The guide price of €12.75 million equates to a net initial yield of 7.34 per cent and a reversionary yield of 8.64 per cent, after allowing for standard purchaser’s costs.
Eyre Square Shopping Centre occupies a high-profile location at the heart of Galway city. The building forms part of a combined shopping centre with both Corbett Court and Edward Square Shopping Centre, with access provided directly from Eyre Square, Williamsgate Street and Castle Street. Anchored by Dunnes Stores and Penneys, the centre enjoys a strong mix of local, national and international retailers and ordinarily has a footfall of some 270,000 visitors a week. That number is expected to increase, as Penneys is expanding in the centre and increasing the size of its footprint by about 50 per cent. The fast-fashion giant's new store will comprise 5,574sq m (60,000sq ft) of retail space over the centre's ground and first floors.
Michele McGarry of Colliers says: “With the current strong demand from both international and domestic buyers and the rarity at which we see good-quality product in Galway and indeed in all locations west of the Shannon, we expect to see solid demand for Eyre Square Shopping Centre.”
