A private investor has paid €7.2 million – €1.2 million above the guide price – for the Avoca Handweavers store on Suffolk Street in Dublin city centre. The investment will show a return of 5.8 per cent.
Meanwhile, a marginally larger commercial building 150 yards away at the junction of Andrew Street and Trinity Street has been sold separately for about €3.7 million.
Agent Savills secured a dozen offers for the Avoca mini-department store – half of them from overseas individuals and funds – in a fast-moving sale which underlined the pent-up demand for well-located retail investments in the city.
Distressed sales
The vast majority of distressed asset sales over the past year have been modern office blocks much favoured by Irish and overseas funds because of the likelihood of rent increases over the next few years due to a supply shortfall.
Davy Property handled the sale of the Avoca building for the family of the late Frank O'Kane, a wealthy businessman who founded Mercury Engineering. He died unexpectedly in 2009 while walking in the Dublin mountains. Davy Property also recently sold the former EBS building in Westmoreland Street for Mr O'Kane's relatives.
The Avoca store, just off the bottom of Grafton Street, has built up a steady following over the years and carries a mixture of fashion and furnishings. It also has an extremely popular food hall on the second floor and a delicatessen and coffee shop in the basement. It is one of 11 stores operated by Avoca in Ireland.
The four-storey over basement mid-terrace building has an overall floor area of 864 sq m (9,303 sq ft) and is let on a 25-year lease from 1999. The 11 years remaining on the lease do not include a break option. The current rent of €430,000 is due to be increased to €440,000 from next December. The area around Suffolk Street is set to get a major boost early next year when fashion giant H&M opens a new store in the former National Irish Bank which fronts on to College Green and backs on to Andrew Street.
Nigel Kingston of Douglas Newman Good Commercial handled the sale of the four-storey over-basement block which is currently used as an information office and exhibition centre by the Department of the Environment. The €3.7 million selling price is a long way from the €8 million paid for it by a private investor before the property crash. There were eight bidders chasing the property on this occasion.
The Department of the Environment is currentlypaying a rent of €340,000 under a lease that is due to run out in May 2015. The department is apparently prepared to pay a penalty in return for a surrender of the lease. Either way, the building which extends to over 1,000 sq m (10,763 sq ft) is likely to end up as a fashion store or restaurant with public use of the ground, basement and first floors.
