US investment fund Marathon Asset Management continues to step up its divestment of retail assets across the country, this time putting a Galway shopping centre up for sale, its second such asset in recent months.
Corrib Shopping Centre, located just a stone’s throw from Eyre Square and minutes from Shop Street, Galway’s retail high street, has been put on the market with a guide price of in excess of €18.5 million, reflecting a yield of 8.41 per cent.
The move follows that of the nearby Eyre Square Shopping Centre, which was brought to market by Marathon Asset Management in August at a guide price of €12.75 million. It is understood that the sale of this property is progressing well and is likely to complete shortly.
Anchored by Marks & Spencer and Sports Direct, which recently took a new 10-year lease on the former Debenhams anchor unit occupying more than 6,038sq m (65,000sq ft), Corrib Shopping Centre is also home to Carraig Donn, Peter Mark, Walsh's Pharmacy and Meteor.
The sale consists of the freehold interest in the entire of the shopping centre and a long leasehold interest in the multi-storey car park, for which a profit share structure is in effect. The scheme, which comprises about 9,290sq m (100,000sq ft) of lettable retail space, fronts on to Eyre Street, Bóthar Irwin and Bóthar na mBan, providing extensive street frontage of more than 200m (656ft) to the southwest, southeast and northeast. Neighbouring occupiers in the immediate vicinity include TK Maxx, Dunnes Stores and Galway City Council.
‘Recovering tourism economy’
Corrib Shopping Centre has a current occupancy rate of more than 99 per cent, with just one vacant unit and a weighted average unexpired lease term of 6.7 years to break option and 6.79 years to expiry. With a total passing rent of €1,711,707 a year, this reflects a net initial yield of 8.41 per cent, assuming standard purchaser costs of 9.96 per cent.
Selling agents Cushman & Wakefield and Colliers said the sale offers a "rare chance" to acquire a sizable retail asset located in the heart of Galway city centre.
“The performance of the scheme is evidenced by the recent deal negotiated with Sports Direct committing to a 10-year term. With a 25,000-strong student population, a recovering tourism economy and the recent further easing of restrictions, the timing of this sale is ideal for investors looking to gain exposure to prime city centre retail in the west of Ireland’s capital,” the agents said.
Marathon Asset Management, which built up significant Irish assets, is managing a significant disposal of its retail properties at present. In addition to the two Galway shopping centres, it also recently agreed to sell three of its best-known retail parks, known as the Parks Collection, to developer Pat Crean's Marlet Property Group for about €78 million, as well as putting other assets, including Waterford's landmark City Square Shopping Centre and Manor West Shopping Park in Tralee, Co Kerry, on the market in recent months.
