US-headquartered real estate giant Hines, a fund managed by Davy Real Estate, and a private investor acting in partnership with developer Eamon Duignan are understood to be among the parties looking to secure ownership of two separate shareholdings amounting to a 62.4 per cent stake in Dublin's St Stephen's Green Shopping Centre.
While the majority stake was offered for sale quietly in a targeted process by HWBC in June at a guide price of €130 million, it is understood that the offers received in the first round of bidding may have fallen short of this figure.
A spokesman for HWBC declined to comment on the matter when contacted by The Irish Times.
The subject shareholding is held by New York-headquartered Madison International Realty and businessman Pierce Molony, and comprises individual holdings of 35.4 per cent and 27 per cent respectively.
The remaining 37.6 per cent stake in the landmark retail scheme is owned by Irish Life, and is not being made available for sale as part of the process now being handled by HWBC.
Best positions
Developed in 1988 by British Land, the shopping centre has more than 90 shops over three levels with an overall floor area of 29,728sq m (320,000sq ft), and is currently producing rental income of about €8 million.
It is understood the potential investors have been briefed on the centre’s capacity to accommodate an additional 18,580sq m (200,000sq ft) of space. The majority of this would be office space and built above the existing retail scheme.
While the shopping centre occupies one of the best positions in Dublin city centre at the top of Grafton Street, it has, to date, failed to deliver on its initial promise. Madison International Realty’s decision to buy a minority interest in the centre in 2015 had been seen by some industry observers as a potential turning point, given the company’s track record as an investor in Grade A real estate.
Madison paid €60 million to acquire its 35.4 per cent stake, in the face of competing bids from four rival funds. The price paid represented a premium of 30 per cent on the €45.6 million guide price set by John Moran of JLL when he offered the shareholding for sale.
Should HWBC manage to secure the €130 million it is guiding for the combined 62.4 per cent shareholding in the St Stephen’s Green centre, Madison would be in line for a payout of about €73.75 million. Such a figure would represent a return of 22.9 per cent on the company’s original investment at a time when physical retail is being challenged by the growth of online shopping.
