retail park, limerick · 2019. 8. 16. · carrickerry ballynacally ennis ballyslattery broadford...

Prime Retail Park Investment Opportunity For Sale by Private Treaty

R E T A I L P A R K , L I M E R I C K

Modern retail park extending to 16,607.8 sq m (178,764 sq ft)

The AssetModern fully let retail park extending to 16,607.8 sq m (178,764 sq ft)

Comprising 7 retail warehouse units

Situated on the Ballysimon Road 4km from Limerick City Centre and 1km from the M7 Motorway, a major arterial route linking Limerick to Dublin

Excellent tenant mix including B&Q, Harvey Norman, Halfords, Home Store + More and EZ Living

Current rent roll of more than €2.3 million per annum

Attractive WAULT of circa 8.4 years

Additional income potential through the form of turnover top-ups and future development opportunities on site with the benefit of P.P

For the avoidance of doubt please note this is a property investment sale and the Tenants are unaffected

C I T Y E A S T R E TA I L PA R K

East Point Retail Park

Northern Trust

Delta Retail ParkBMWAUDI

M7

M7

DUBLIN

LIMERICK CITY

P R I M E R E TA I L PA R K I N V E S T M E N T O P P O R T U N I T Y

N18

N18

M7

M7

M20

R445

R445R445

R527

R511

R511R526

R512

R445 R463

R463R464

R464

LimerickLimerick

Garryowen

Ballynanty

Ballysheedy

Groody Park

Castletroy

Galvone

Dooradoyle

LocationCityEast Retail Park is located approximately 4kms south east of Limerick City, benefiting from extensive frontage onto the Ballysimon Road. The park is positioned just off Junction 29 of the M7 motorway, one of Ireland’s busiest arterial routes.

Limerick City is the regional capital of the south west of Ireland and the third largest city overall. The city has a population of 94,192 as per the 2016 census. Limerick is located approximately 202km south west of Dublin (M7), 102km north of Cork (N20) and 107km south of Galway (M18).

Limerick is one of three cities which makes up the Cork-Limerick-Galway corridor along the west of Ireland and has a population of over 1 million people. The city lies on the River Shannon and is a popular tourist destination, it also acts as a gateway to County Kerry, Ireland’s main tourist destination outside of Dublin.

Limerick is well connected and easily accessible by all modes of transport. It benefits from an extensive road / motorway network with drive times to Dublin in 2hrs 25mins, Cork 1hr 40mins and Galway in 1hr 20mins. There are local city bus services operating as well as expressway routes direct to other towns and cities. There are numerous rail connections from Limerick (Colbert) Station connecting Dublin (Heuston) in 2hrs, Cork (Kent) in 1hr 25mins and Galway (Ceannt) in 1hr 55mins. Shannon International Airport is located 33km to the northwest of the subject property providing various domestic and international connections.

CityEast Retail Park is located within an established commercial location. In the immediate area around the park there is also Garryglass Industrial Estate, Delta Retail Park, Eastway Business Park, East Point Retail Park, Monaclinoe Industrial Estate and Crossagalla Industrial Estate, all located on the Ballysimon Road. City East Plaza, a modern office development is located directly opposite the retail park where Northern Trust are the main tenant.


Catchment Analysis

Limerick

Clarina

Ahane

Craglea

Ballymoylan

Ahane

O’Briensbridge

Nenagh

Dunkerrin

Barrisnoe

Cooleen

Ballagh

Cashel

Tipperary

Tipperary

Kilmallock

Rockhill

Upperchurch

Murroe

Cliggin

Dromkeen

Fedamore

MeanusCarrickettle

CarrigoreillySt Patrickswell

Croom

Milltown(Asceaton)

Rathkeale

Newcastle

Kilmeedy

Curra More

Foynes

Carrickerry

Ballynacally

Ennis

Ballyslattery

Broadford

Shannon

M7

M7

M20

N20

N21

N24

N24

Limerick is well connected and easily accessible by all modes of transport. It benefits from an extensive road / motorway network with drive times to Dublin in 2hrs 25mins, Cork 1hr 40mins and Galway in 1hr 20mins.


Population Growth 2006 - 2016 Household Expenditure

Permanent Households total 80,184

of catchment area is within the A, B, C1 Socio-Economic Group.

51%

Workforce

Population by Age

< 15 years

15 - 24 years

25 - 44 years

45 - 64 years

65+ years

Average Weekly Spend €790

Limerick

Clarina

Ahane

Craglea

Ballymoylan

Ahane

O’Briensbridge

Nenagh

Dunkerrin

Barrisnoe

Cooleen

Ballagh

Cashel

Tipperary

Tipperary

Kilmallock

Rockhill

Upperchurch

Murroe

Cliggin

Dromkeen

Fedamore

MeanusCarrickettle

CarrigoreillySt Patrickswell

Croom

Milltown(Asceaton)

Rathkeale

Newcastle

Kilmeedy

Curra More

Foynes

Carrickerry

Ballynacally

Ennis

Ballyslattery

Broadford

Shannon

M7

M7

M20

N20

N21

N24

N24

2011 216,701

2006 205,362

2016 221,581

+2%+6%

12,927

31,99226,695

4,6321,448

2,490 (not stated)

Per household

0

1

2

34

Total Expenditure

€63,327,489

Housing

€13mGoods & Services

€11m

Food

€9mTransport

€9m

Recreation & Culture

€6mFuel

€3m

Clothing

€2mAlcohol

€2m

52,421

Catchment 221,581 Ireland 4,761,865

46,227

30,001

63,304

29,628

21%

13%

29%

24%

13%

1,006,552

576,452

1,406,291

1,135, 003

637,567

21%

12%

30%

24%

13%

The PropertyCityEast Retail Park was constructed in 2006 and comprises 7 retail warehouse units extending to 16,607.8 sq m (178,764 sq ft) GIA. The scheme is laid out in two detached blocks, the anchor unit occupied by B&Q is a large rectangular shaped building with the other remaining units laid out in an “L” shaped configuration. The retail park sits on a site area of approximately 6.64hectares (16.41 acres) and provides for 525 surface car parking spaces which is free for customers.

Units range in size from approximately

704.00 sq m (7,578 sq ft) to 5,546.2 sq m (59,699 sq ft).

The units are of steel portal frame construction with block work walls and cast in-situ concrete floors with coated metal deck roofs. The current use within the park is restricted to bulky goods.


Tenancy OverviewCityEast Retail Park is let to seven tenants including B&Q, Harvey Norman, Halfords, Home Store + More and EZ Living.

Top 3 tenants by income

Over 75% of the current income is secured against multinational covenants.

The above areas which are calculated on a Gross Internal Area basis were provided by Murphy Surveys. An assignable measurement survey and detailed tenancy schedule is provided in the dataroom.

Unit Trading As Demise Floor Area Sq m

Floor Area Sq ft Lease Term Start End Rent Review Break Contracted Rent Rent Receivable Comment

1 B&QGround 5,378.5 57,894

20 yrs & 1 day 25/07/2005 25/07/2025 25/07/2020 €590,000 €590,000

Abated rent from €1,208,592 per annum to minimum rent of €590,000 per annum plus 5% of Gross T/O in excess of annual Rental Threshold of €11.8m from 1st April 2013 to 24th July 2020. The next rent review on 25th July 2020 will be the higher of €590,000 per annum or the open market yearly rent. Mezzanine 167.7 1,805

2 EZ LivingGround 833.0 8,966

10 yrs 17/06/2013 16/06/2023 17/06/2018 16/06/2020 €130,000 €130,000Mezzanine 549.6 5,916

3 HalfordsGround 669.2 7,203

20 yrs & 1 day 28/10/2005 28/10/2025 28/10/2020 €183,090 €183,090Mezzanine 438.4 4,719

4 Maxi ZooGround 680.1 7,321

25 yrs & 1 day 24/03/2008 24/03/2033 24/03/2018 €186,354 €186,354Mezzanine 23.9 257

5,6,7 Harvey Norman Ground 4,256.4 45,815

25 yrs & 1 day 09/01/2006 09/01/2031 10/01/2021 09/01/2026 €638,520 €638,520 Break Option clause subject to 12 months notice and 12 months penalty. Mezzanine 78.5 845

8,9 Home Store + MoreGround 1,891.5 20,360


10 Home Savers Ground 946.7 10,190 20 yrs 17/05/2018 16/05/2038 17/05/2023 €101,270 €101,270

Rent Deposit Deed- €93,421.58 to act as security and for the future performance of the Tenant. 1/3 will be refunded to the Tenant 21 days after the last day of the second year of the term, 1/3 after the last day of the third year of the term and 1/3 after the last day of the fourth year of the term.

Total 16,607.8 178,764 €2,302,759 €2,302,759


Covenant Strength by Income

Income Profile to Expiry Income Profile to Break

Multinational

€1,727,964National

€574,795

25%75%

€0€130,000

€773,090

€1,399,669

€0€200,000€400,000€600,000€800,000

€1,000,000€1,200,000€1,400,000€1,600,000

0 years - 2 years 2 years to 5years

5 years to 10years

10 years +

€0

€1,411,610

€130,000

€761,149

€0€200,000€400,000€600,000€800,000

€1,000,000€1,200,000€1,400,000€1,600,000

0 years - 2 years 2 years to 5years

5 years to 10years

10 years +

Harvey Norman

28%

B&Q

26%

€638,520

€590,000

Home Store + More

21%€473,525

OTHER TENANTS

€2.3m Rent

Receivable

Site Plan

Future Development

Unit 1A- Planning granted under ref (13/631) for an additional unit extending to approximately 1,427 sq m (15,360 sq ft).

Unit 10A- Planning granted under ref (17/733) for a coffee pod extending to approximately 244 sq m (2,626 sq ft).

Unit Trading As Demise Floor Area Sq m

Floor Area Sq ft Lease Term Start End Rent Review Break Contracted Rent Rent Receivable Comment

1 B&QGround 5,378.5 57,894

20 yrs & 1 day 25/07/2005 25/07/2025 25/07/2020 €590,000 €590,000

Abated rent from €1,208,592 per annum to minimum rent of €590,000 per annum plus 5% of Gross T/O in excess of annual Rental Threshold of €11.8m from 1st April 2013 to 24th July 2020. The next rent review on 25th July 2020 will be the higher of €590,000 per annum or the open market yearly rent. Mezzanine 167.7 1,805

2 EZ LivingGround 833.0 8,966

10 yrs 17/06/2013 16/06/2023 17/06/2018 16/06/2020 €130,000 €130,000Mezzanine 549.6 5,916

3 HalfordsGround 669.2 7,203


4 Maxi ZooGround 680.1 7,321

25 yrs & 1 day 24/03/2008 24/03/2033 24/03/2018 €186,354 €186,354Mezzanine 23.9 257

5,6,7 Harvey Norman Ground 4,256.4 45,815

25 yrs & 1 day 09/01/2006 09/01/2031 10/01/2021 09/01/2026 €638,520 €638,520 Break Option clause subject to 12 months notice and 12 months penalty. Mezzanine 78.5 845

8,9 Home Store + MoreGround 1,891.5 20,360


10 Home Savers Ground 946.7 10,190 20 yrs 17/05/2018 16/05/2038 17/05/2023 €101,270 €101,270

Rent Deposit Deed- €93,421.58 to act as security and for the future performance of the Tenant. 1/3 will be refunded to the Tenant 21 days after the last day of the second year of the term, 1/3 after the last day of the third year of the term and 1/3 after the last day of the fourth year of the term.

Total 16,607.8 178,764 €2,302,759 €2,302,759


BALLYSIMON RD

SERVICE RD

OLD TIPPERARY RD (N24)

SERV

ICE

RDDEVELOPMENT LAND

GARDENCENTRE

NEWLINEARPARK

UNIT 1A

UN

IT

10A

PJ T

HW

AITE

S

FUTURE OPPORTUNITIES

For illustration purposes only


Economy going from Strength to StrengthIreland was the EU’s fastest growing economy in 2018, with output rising by 8.2%. Total employment rose by 2.3% in 2018 and a further 3.7% year-on-year in Q1 2019, with an increase of over 80,000 people at work. Unemployment is currently at 4.6%, close to what is believed to be full employment. Greater numbers at work, coupled with increased earnings and consecutive tax cuts, have led to strong growth of over 5% in real aggregate household disposable incomes in the last twelve months and continued deleveraging which has contributed to a 4.6% rise in households’ net worth.

Retail EconomyThe Q1 national accounts show a 2.9% increase in personal consumption expenditure – still positive but something of a slowdown compared with the growth rates seen in late 2017 and the first half of 2018.

The narrower monthly retail sales measure is also showing growth, but has slowed significantly in the last few months. As of June the index was rising by just 0.1% Y/Y, compared with 6.4% a year ago.

All but the bars and motors sectors captured in the monthly data are enjoying annual sales growth in volume terms (dots above the horizontal axis in Figure 2). Some of the strongest growth is being recorded in electrical (+22.7% 3mma) and furniture stores (+10.0% 3mma). These store types are commonly associated with housing and their performance would appear to reflect the ramping-up of new housing supply – new dwellings completions rose by 25.2% in 2018 by

23.2% Y/Y in Q1 2019 – as well as improved disposable incomes and rising house prices – the latter of which has likely encouraged people to invest more in their homes.

Only newsagents, bars and car dealerships sit to the right of the vertical axis in Figure 2, indicating rising average prices. In all other sectors prices are falling. Indeed, deflation has been a consistent theme in Irish retail for a few years now. One reason is an ongoing compositional shift in the Irish retail landscape towards mid-market and value brands. It also reflects lower input costs for retailers due to a weaker Pound since the Brexit referendum, with a share of these savings being passed on to consumers. However, the continuing disparity between volume and value sales also suggests that e-commerce is improving price transparency, forcing face-to-face stores to be more competitive.

Why Invest in Irish Retail

Figure 1: Household Net Worth By Component Figure 2: Annual Retail Sales & Price Growth by Sector (3-mth Mov. Avg. June 2019)

1,000

750

500

250

0

-250

2003

Q2

2003

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2004

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2004

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2018

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€ b

n

Source: Central Bank of Ireland

Financial Assets Liabilities Housing Assets Net Worth

Dept. Stores

Grocery

Pharmacy

Clothing

Furniture

Hardware

Electrical

Newsagents

Bars

Motors

Specialist Foods

-8

-4

0

4

8

12

16

20

24

-12 -8 -4 0 4 8 12

Sales Volume, %

Price Growth, %

Source: CSO, Savills Research


Indicator Period % Change Y/Y

Live Register July 2019 -12.0

Overseas Trips to Ireland Q1 2019 +5.5

Real VAT Receipts June 2019 +3.7

Real Household Disposable Income (4QMA) Q1 2019 +5.2

Household Net Worth Q4 2018 +4.6

Total Retail Sales May 2019 +1.0

Total Employment Q1 2019 +3.7

Real Personal Consumption Expenditure Q1 2019 +2.9

Real Average Gross Earnings Q1 2019 +2.3

Consumer Credit Outstanding Balances May 2019 +4.7

Consumer Sentiment (3mma) June 2019 -14.2

Sources: CSO, CBI, KBC Bank Ireland/ESRI, Dept. of Finance.

Consumer Economy Dashboard

Retail PropertyOver the 12m to end-June, retail rents rose by 1.5% across the basket of investment grade shops covered by MSCI. This reflects a slowdown compared with 3% Y/Y a 12m ago. As ever with retail there is significant variation by location and store type. Given buoyant consumer demand for electrical goods and homewares, arising from increased household wealth and housing output, the retail warehousing sector has been the best performer. Here rents are rising by 6.5% per annum and capital values have edged up by 1.8%.

OutlookThe economic backdrop remains favourable for retail property. Ireland’s benign cycle of jobs creation, which has been in place for more than five years now, is expected to continue with consensus forecasts pointing to robust growth of 2.2% and 1.9% in 2019 and 2020 respectively. Additionally, as the labour market approaches full-employment, wage inflation is likely to strengthen, which should provide consumers with additional firing power at the tills.

In conjunction with the ESRI Savills Research has developed an econometric model of retail rents in Ireland. In summary, with limited additional rental property being constructed rents are now rising with 1.51% Y/Y rental growth Q2 2019. The model forecasts further rental growth of 3.44% between Q3 2019 to Q1 2021.

Figure 3: Overall Rents Forecast Q2 2018 - Q1 2021300

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x: Q

1 199

6 =

100

Central Forecast 95% Lower 95% Higher

ContactSelling Agents

Savills 33 Molesworth St Dublin 2 PSRA 002233

Brendan Delaney +353 (0) 1 618 1715 [email protected]

John Earley +353 (0) 1 618 1766 [email protected]

Peter O’Meara +353 (0) 21 490 6114 [email protected]

Solicitor

Beauchmaps Riverside Two Sir John Rogerson’s Quay Dublin 2

Maitiú Ó Dónaill +353 (0) 1 418 0657 m.o’[email protected]

DISCLAIMER: These particulars are issued by Savills Ireland on the understanding that any negotiations relating to the property are conducted through them. While every care has been taken in preparing them, by Savills Ireland for themselves and for the vendor/lessor whose agents they are, give notice that: - (i) The particulars are set out as a general outline for guiding potential purchasers/tenants and do not constitute any part of an offer or contract. (ii) Any representation including descriptions, dimensions, references to condition, permissions or licenses for uses or occupation, access and any other details are given in good faith and are believed to be correct, but any intending purchaser or tenant should not rely on them as statements or representations of fact but must satisfy themselves (at their own expense) as to their correctness. (iii) Neither by Savills Ireland, nor any of their employees have any authority to make any or give any representation or warranty in relation to the property. August 2019. Designed and produced by Creativeworld. 01282 858200

ViewingsAll viewings are strictly by appointment through the sole selling agent.

PricingGuide Price excess €24,250,000 (subject to contract), which represents a net income yield of 8.75% after standard purchaser’s costs of 8.46%.

BER Rating

VATWe understand transfer of business relief should apply to the sale.

TitleWe understand that the property is held Freehold.

Data Site www.cityeastretailpark.com

retail park, limerick · 2019. 8. 16. · carrickerry ballynacally ennis ballyslattery broadford...

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