The sale of the Boodles store confirms the higher income returns now available on the street, writes JACK FAGAN

THE SLOW moving retail investment market has been given a boost with the sale of Boodles jewellery store on Dublin’s Grafton Street for close to the asking price of €8 million. The income yield is in the region of 6.4 per cent.

The buyer is a London-based private investor, one of several from the UK chasing Irish investments since values toppled by over 40 per cent in the past two years.

The corner four-storey over basement building is at the junction of Grafton Street and Harry Street and is producing a rent of €530,000 per annum. That figure is likely to be increased on review in June, to bring it into line with at least one other store on the street. The present rent equates to a Zone A rate of €7,825 per sq m (€727 per sq ft).

However, after a recent rent review at the nearby Monsoon shop, the Zone A rate was increased to €8,611 per sq m (€800 per sq ft). This leaves the way open for the new owner of Boodles to seek at least an equivalent, if not higher, rent. The 25-year lease runs from 2005 without any break options.

Joe Bohan of selling agent HWBC says the strength of the Boodles covenant proved an important ingredient in the sale. A similar store on New Bond Street in London could be expected to sell at a yield of around 4 per cent.

Boodles is one of the UK’s most prestigious jewellers, having been in business since 1798. Apart from the Bond Street store, it has other London outlets in Sloan Street, Royal Exchange and Harrods.

Friends First has owned 71 Grafton Street for a long period and in 2005 it paid €400,000 compensation to the UK-based Speciality Retail Group for surrendering the lease on the shop which was then occupied by Suits You. Once Boodles moved in on a long lease, the value of the building soared. FC Reit, which manages the Friends First property portfolio, also recently agreed a new 20-year lease with Laura Ashley, the home, furniture and women’s fashion chain, on Grafton Street. The rent has been increased from €700,000 to €950,000 for the five-storey premises which has a retail area of 603sq m (6,500sq ft). The last retail building to sell on Grafton Street was the Tommy Hilfiger store which made €25 million when it was acquired last September by the German banking group, DekaBank. The yield in this case was 6.5 per cent.