The profitable City Square Shopping Centre in Waterford is expected to undergo a major revamp if, as expected, it is sold in the coming weeks to either an Irish or overseas fund.
Joint agents DNG Commercial and JLL are quoting a guide price of €22.5 million for the standalone centre which is producing an annual rental income of €1.7 million. The investment will show a net initial yield of 7.23 per cent even before it is restructured and extended.
The centre was developed in 1994 by Sisk and sold a year later to IBI Property Nominees Ltd.
Though most of the 35 shops and kiosks continue to trade strongly, the management recognises the need to extend the complex and amalgamate some of the shops to boost trade further.
A number of leases due to run out will allow for the creation of a significant number of larger units and open the way to a better tenant mix.
Simon Plunkett of DNG Commercial estimates that it will cost in the region of 2.5 million to avail of the planning permission to reposition the frontage of the centre and proceed with a two-storey extension which will create a further 1,600sq m (17,222sq ft) of retail space.
Four shops needed to facilitate the extension have been taken back by the management.
Four more are also vacant in the centre which has an overall floor area of 5,150sq m (59,309 sq ft) apart from the two anchors, Dunnes Store and Debenhams, both of them trading over two floors.
The other tenants include River Island, JD Sports, Peter Mark, Burger King, GameStop, Emobile, Holland & Barrett and Mulligans Pharmacy.
River Island is paying a rent of €173,500; GameStop is paying an abated rent of €125,000 rather than the contracted rent of €165,000; Burger King, €150,000; JD Sports, €130,000; Specsavers, €120,000; Eircom/Meteor, €90,000; Peter Mark, €80,000; Holland & Barrett, €70,000 and Mulligans Chemist €65,000. The highest contracted rent of €258,250 was agreed by Cards & Things but has been abated to €160,000.
Shoppers at the centre have direct access to 450 car parking spaces at two basement levels which are owned separately by an investor.
City Square forms part of the main retailing pitch in the centre of Waterford with pedestrian access from three prime entrance points – Peter Street, Michael Street and Arundel Square. The main outdoor shopping area of Barronstrand Street is little more than a minute’s walk away.
The selling agents estimate that City Square attracts an average footfall of about 100,000 per week. Official figures show that no less than 330,475 people live within a 60-minute drive of Waterford.
