Kennedy Wilson to sell Dublin retail investments worth €14.5m

07 Sep

The international real estate investment firm Kennedy Wilson is to sell four retail investments in Dublin city centre. The Savills agency has been engaged to handle the sale of the properties which have a combined guide price of more than €14.5m. The four investments originally formed part of the €306m Project Opera portfolio belonging to the now bankrupt Treasury Holdings which was bought in 2012 by Kennedy Wilson and included Stillorgan Shopping Centre and the bank of Ireland headquarters on Mespil Road.

Dessie Kilkenny of Savills is handling the sale of the retail assets which include the 3 store at 35 Henry Street; Kentucky Fried Chicken at 16 Westmoreland Street; Costa Coffee at 3 College Green and Paddy Power’s betting shop at 18 Fleet Street.

At €8.25m the 3 store in Henry Street is the highest value asset, reflecting a net initial yield of 4.93%. The four-storey mid-terrace building is located close to O’Connell Street and has an overall floor area of more than 267 sq.m (2,979 sq.ft). The current rent roll stands at €425,000 and new owners will have the benefit of a long unexpired term of more than 15 years with the protection of upwards-only rent reviews.

Savills are guiding more than €3.5m for the KFC fast food takeaway which has an excellent profile on Westmoreland Street. The tenant is leasing basement, ground and first floor space on a 20-year lease from October 2013, with a break option in year 10. The headline rent of €200,000 per annum is stepped for the first four years. The current rent of €180,000 is due to be topped up in October 2017. The investment will show an immediate return of 5.5%.

Trinity College

Also for sale is the Costa Coffee outlet at 3 College Green that is expected to make in excess of €1.9m. It is located opposite Trinity College and close to Temple Bar and will show a return of 5.1%.

Costa is paying a rent of €100,000 for the premises which have a ground floor with seating, a serving counter, rear storage and staff quarters. The basement has an attractive vaulted ceiling with further seating and customer toilets. The 20-year lease from 2010 includes a break option in 2020.

The Paddy Power shop at Fleet Street is the smallest of the four investments with a guide price in excess of €850,000. It is currently producing a rent of €46,600 which will show an income yield of 5.25% after standard acquisition costs.

Dessie Kilkenny said that given the high profile city-centre locations of the retail assets they expected demand particularly from private and non-related property investors to be exceptionally high. The four properties represented a low-risk investment due to their proximity to Ireland’s largest retail locations at a time when the retail economy was performing strongly.