Supermarkets: A property developer has bought the Tesco supermarket and an adjoining site at 17/23 Upper Rathmines Road in Rathmines, Dublin 6 for over €10 million. The deal will show a yield of under 3 per cent though there is some redevelopment potential.
Brian Cooney of Hamilton Osborne King had been quoting a guide price of over €7.7 million for the investment.
Tesco did not apparently bid for the property even though it has bought in several other retail schemes where it has a supermarket. Most of these have had development potential.
The Rathmines supermarket is let to Tesco under a 35-year full repairing and insuring lease from December 1998 at a rent of €300,000 per annum. The lease provides for five-yearly upwards-only rent reviews, the next to take place in 2008.
The two-storey modern commercial building extends to 1,774sq m (19,095sq ft) and stands on a site of 0.16 hectares (0.4 of an acre) close to the junction of Lower Rathmines Road and Rathgar Road. The supermarket operates on the ground floor while the upper floor is used for ancillary storage and staff services.
There is obvious scope to redevelop part of the site which has 77 surface car-parking spaces. This might well include an extension to the supermarket which is considerably smaller than most Tesco stores.
However, the multiple will be anxious to stay in the densely populated Dublin 6 area where it is in direct competition with Dunnes Stores in The Swan shopping centre. One of the German discount stores is also planning to open beside the shopping centre.
