AN UNUSUAL retail investment with 13 years remaining on the lease comes on the market today when Savills begin marketing the first Irish discount store opened by Aldi at Parnell Street in Dublin city centre.
The agency is quoting a guide price of €5.25 million for the outlet, which is being sold on the instructions of KPMG receiver Kieran Wallace.
The store is located along a busy stretch of Parnell Street between the Ilac Centre and Penneys, and almost opposite Ireland’s largest cinema complex, Cineworld.
Aldi is paying rent of €386,500 under a 25-year lease dating back to July, 1998. The agreement provides for upward-only rent reviews every five years, with the next due in 2013.
At the price quoted, the investment would show a net yield of 6.8 per cent.
Michael Clarke of Savills is confident the store will appeal to private investors who, he says, are increasingly focusing on modern properties in good locations with long-term leases in place. The store is comprised of several high quality retail units which were combined to form a single supermarket extending to 1,115sq m (12,000sq ft). It has 44 metres of frontage onto Parnell Street and separate access for deliveries via a shared service yard.
Aldi is one of the largest retail chains in the world, with more than 7,000 stores throughout Europe, North America and Australia. There are 400 stores in the UK and Ireland. Of those, about 70 are in this country, employing 1,300 people. Aldi does not disclose its turnover or profits in Ireland but it is known to be expanding rapidly here as an ever-increasing number of shoppers avail of its lower prices.
The group’s turnover for UK and Irish operations in 2008 was £2 billion (€2.4 billion), an increase of £496 million (€594 million) or 32 per cent on the previous year, while pre-tax profits in the UK and Ireland increased from £77 million (€85.5 million) in 2007 to £112 million (€124 million) at the end of 2008.
The Parnell Street site was originally developed by South Dublin Construction, one of the most active residential developers in Dublin in the past 20 years. In the mid-1990s, it won a contract to develop apartments and shops along the Parnell Street frontage of the Ilac Centre.
