Green Property is to sell the Killarney Outlet Centre after operating it for the past 18 years. Property adviser CBRE is guiding €11.5 million for the shopping complex which is producing a rental income of about €1 million a year.
Although it offers well-laid out shopping facilities and is located next to the bus station and the railway station, the centre has had challenging times over the years as Green Property strove to find the right mix of traders.
Its anchor tenant, Nike, pays a rent of €110,000 for a factory outlet extending to 678sq m (7,297sq ft). The other major players are Leading Labels, which pays €80,000 for 585sq m (6,300sq ft); Pavers Shoes, which pays €75,000 for 288sq m (3,100sq ft); DV8, which pays €60,000 for 371sq m (4,000sq ft); and The Works, which pays €60,000 for 213sq m (2,300sq ft).
Other tenants include Claire's Accessories, Holland & Barrett, Tiger and Trespass. The centre also benefits from having food and beverage retailers Costa Coffee and O'Briens.
CBRE reports that 4.5 per cent of the overall retail area of 8,407sq m (90,497sq ft) is currently vacant and almost all of it is on the first floor. The centre is broken into 39 retail units ranging in size from 932sq m to 678sq m (1,000sq ft to 7,297sq ft).
The agency acknowledges that there is “significant potential for rental growth” once the next owners embarks on “active asset management”. Whoever buys the centre is also expected to introduce longer lease terms for individual traders instead of the current leases of five years.
Capital value
If the centre sells for the asking price of €11.5 million, it will work back to a capital value of only €127 per sq ft.
The outlet centre has two entrance points on opposite sides of the centre and 230 parking spaces on the overall site which extends to 2.08 hectares (5.14 acres).
Fiona Kennedy of CBRE said the centre had performed "exceptionally well" in recent years attracting high-quality retailers. However, she said there was significant potential for rental growth which can be achieved through letting the vacant space.
Niamh Sheahan, the letting agent for the Outlet Centre, said there was an excellent asset management opportunity to lease the vacant units "and introducing complementary users which will further enhance the tenant mix in place".
