Merchants Quay Shopping Centre

Guiding €12.5 Million

Dublin 28th September 2016 - Joint agents CBRE and Savills are launching Merchants Quay Shopping Centre in Cork to the market, for sale by Private Treaty. The shopping centre currently produces a gross annual rent roll of approximately €1,470,008 per annum. The scheme has a full grant of planning permission in place to reconfigure a number of the retail units internally. With vacancy levels in Cork City Centre at an all-time low, an incoming purchaser is poised to secure a significant foothold on Corks premier retail thoroughfare, and will stand to reap the benefit of a reconfigured scheme catering for retailer demand in turn leading to an increased rent roll.

It is anticipated that Merchants Quay will achieve in excess of the guide price of €12,500,000 which equates to a net initial yield of 11.25% and €285 per sqft capital value. The centre will undoubtedly attract interest from a wide cohort of investors including private equity investors such as Davidson Kempner, Goldman Sachs and Oaktree who are understood to have acquired over 60% of the shopping centres and retail parks in Ireland since 2013, as well as other prominent investors such as York Capital, Davy, Clarendon and Varde to name but a few.

Merchants Quay Shopping Centre is an established and successful shopping centre offering a prime retail experience in the heart of Cork City Centre, originally developed in 1989. Merchant’s Quay is situated in a prominent position on the northern side of Patrick’s Street, Cork’s main retail thoroughfare. The anchor tenants: Marks & Spencer, Dunnes Stores, Debenhams and Supervalu (which are not subject to this sale) have direct access onto the shopping mall. The representation of four major anchor tenants within the scheme ensures the popularity and success of the centre since it opened its doors.

The development is laid out to provide a two level shopping centre which enjoys an annual footfall close to 8,300,000 visitors per year. There are 29 main shop units included in the sale extending to approximately 4,072 sq m in total. A number of the existing tenants in the centre include: Costa Coffee, Boots Dealz t/a Poundland and Laura Ashley. The only pedestrian access to the car park is via the Merchants Quay mall, a significant driver of footfall to the scheme.

Patrick Street has witnessed strong activity over the past year, with a number of new high profile lettings completed with Holland & Barrett, SuperDry, Pandora, Vision Express, JD Sports, Skechers, Specsavers, Sostrene Green and Hairspray. More recently, the development of “The Capitol” will bolster retail demand in Cork City providing approximately 5,000 sq m of retail space which is under active negotiation and is expected to be completed by Q1 2017.

The vendor, Atrium Nominees Limited secured planning permission in July 2015, which involves the reconfiguration of part of the ground floor mall, and entails converting the ground floor mall circulation space into general retail use providing four large retail units located on the left (north) side of the entrance, realignment of the mall from Patrick Street, and repositioning the entrance to the centre abutting the neighbouring property, occupied by Marks & Spencer.

The reconfigured retail units at ground floor level will range in size from 53-338 sq m. A number of existing retail units located on the ground floor level (at the eastern end of the shopping mall) will be retained. The first floor level of the Merchants Quay façade will be enlarged and a number of the ground floor shop fronts will be replaced.

On the first level, planning permission has also been obtained to convert the first floor mall circulation area into general retail use which will then be amalgamated with existing retail space, providing a large sub-anchor retail unit extending to approximately 1,575 sq m. In addition, planning permission has been obtained for material changes to the three storey corner of Merchants Quay and Patrick Street replacing brick cladding and shop front glazing with new glazing.

According to the joint selling agents “CBRE & Savills are anticipating keen interest in Merchants Quay. In 2015 the overall investment spend was €3.58 billion of which the retail investment spend accounted for 28% of market, a significant increase from the previous year. The retail market, at least at the prime end, is now where the office market was in the recovery cycle at the beginning of 2013. Merchants Quay offers a unique opportunity to benefit from this recovery, as well as a strongly performing city centre retail location”

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.

In Ireland, with offices in Dublin and Belfast, CBRE is the country’s largest commercial real estate services company, now employing over 165 employees and offering a full range of property services including property sales and acquisitions, leasing and management, investment, corporate services, debt advisory, project management, consultancy, business rates and compulsory purchase, valuations and research. Please visit our website at www.cbre.ie or www.cbre.ie/ni.