A local investor has secured a net initial yield of 9.66 per cent after paying €1.33 million for a retail park in Gorey, Co Wexford.
The deal for Knockmullen Retail Park, handled by Stephen Conway of Colliers International, underlines the attractive returns being secured on provincial retail assets.
In February, for example, a majority stake in Navan Shopping Centre was sold to a fund controlled by Davy at a yield of about 9-9.5 per cent. One of the people involved in that transaction said: “Sure, where else in Irish property would you get a return that good right now?”
Knockmullen was put on the market at €1.3 million and its sale price equates to a low capital value of just €65 per square foot. It is producing a rent roll of about €139,000 but this could increase if two vacant office units are let.
The park, built in 2005, extends to about 1,858sq m (20,000sq ft) and includes six retail units and two office units arranged around a good-sized parking area. Its tenant line-up includes Expert Electrical, Sally Salon Services and Bray Vet.
A softening market for provincial retail assets is reflective of the challenges facing traditional retailing from the march of ecommerce.
