Filling investor prescription is €2.5m Grand Parade property with Lloyds Pharmacy as key tenant
Parade 10 Are Street St Off Nos Grand Patrick's Just 8
STRONG investor interest is expected in two fully occupied Cork city centre mixed-use properties, on the market for €2.5m.
Nos 8-10 Grand Parade between them generate a passing rent of €215,000 pa. Rock solid tenants include Lloyds Pharmacy who pay an annual rent of €100,000 and have 20 years left to run on a 35-year lease, with no break option or rent reviews.
Also on a longterm lease, and paying rent of €22,000 pa, is Grand Parade Dental Clinic, established in 2011. The clinic, with seven years left to run on a 10-year lease, has a break option and five yearly rent reviews. Both commercial tenants are on the lower floors of the five storey terraced buildings. Lloyds occupies the entire ground floor and a portion of the first floor (the buildings are interconnected at ground floor level), while the dental clinic has part of the first and second floors.
The residential element is over the upper floors and includes one one-bedroom apartment and four x 2-bedroom apartments, which between them generate €92,376 in annual rent, with tenants on a one-year lease, in a rent pressure zone. Rents in the 490 sq ft-585 sq ft apartments - accessed off Grand Parade and internal stairs - currently range from €900-€1,800 per month, “with scope for uplift”, according to selling agent David McCarthy of Sherry FitzGerald Commercial.
The two buildings are being sold by an individual private Irish investor and the agent expect the buyer to have a similar profile.
“I think the buyer is likely to be Irish, probably a pension fund, given the lot size,” Mr McCarthy said, adding that there’s “nothing really available in the market at the moment”.
The 562 sq m (6,052 sq ft) property is in a prominent position, with extensive street frontage, just off St Patrick’s Street. The surrounding area is home to a number of high-profile occupiers including The English Market, The Capitol, Lifestyle Sports, Homesense, Sosterne Grene, TK Maxx, McDonalds and Dealz.
Mr McCarthy said the period buildings present “a very rare opportunity to acquire a substantial high-profile mixed-use building in the heart of the city centre”.
“There remains a dearth of investment opportunities, and we expect strong interest in the subject property from private investors seeking a compact, easily managed investment, many of whom will be investing via pension funds,” he said.
Further out of town, it’s been reported that Irish property investor Lugus Capital and London-headquartered Patron Capital have bought Blackpool Shopping Centre for just under €50m in an off-market sale. The vendor was US-based investor Varde Partners, who paid €115m for it 10 years ago.
Back on Grand Parade, Mr McCarthy pointed out that the investment opportunity presented by Nos 8-10 was made more attractive by the current strong demand for residential accommodation, “coupled with the fact that the income of €100,000 being produced by the lease held by such a robust covenant as Lloyds Pharmacy is guaranteed for 20 years with no rent review or tenant break option”.
Nos 8-10 Grand Parade, built in 1880, are in a part of the city earmarked for substantial redevelopment, including the pending expansion of Penney’s on St Patrick’s Street and the long-awaited redevelopment by Intersport/Elvery’s of the flagship former Debenhams store, also on main street. Grand Parade Quarter itself is also getting a facelift, with work already underway to create a new public realm that will transform Bishop Lucey Park and link it to a pedestrianised South Main Street. Cork City Council also has plans to build a new state-of-the-art city library. In all, funds upwards of €60m will be pumped into creating a new look Grand Parade Quarter over the coming years.
: David McCarthy, Divisional Director, Sherry FitzGearld Commercial T: 021 4270099 E: david.mccarthy@sherryfitz.ie