Castlebar Retail Park offers investors 9% yield

Castlebar Retail Park is fresh to the market this week through Colliers International which is quoting more than €9.25 million. Should it make this price the investment will show a return of close to 9 per cent – and this is before factoring in a number of asset-management opportunities.

Situated at the edge of Castlebar, the park comprises eight retail units with a total of about 7,432sq m (80,000sq ft) of space.

The sale also includes an extension site of .97 of a hectare (2.4 acres) with planning permission for an additional 6,689sq m (72,000sq ft) of retail warehousing.

The retail park is anchored by Woodies, which recently regeared its lease and deferred a break option that is now more than eight years away. Other tenants include Halfords and Harvey Norman.

Home Store + More has also recently agreed to take two adjoining units of 1,115sq m (12,000sq ft) plus a new rear extension, which it will fund itself, of 650sq m (7,000sq ft) on a 15-year lease at €190,000 a year. The Home Store + More letting will bring the rent roll at Castlebar to almost €840,000 a year. “At a gentle average rent of around €9.80 per square foot throughout the park, investors will see clear room for rental growth going forward,” said Michele McGarry, Colliers capital markets director.

“An added attraction to the fully let scheme is the existence of planning consent for a drive-through and a coffee pod in the car park.”

Castlebar has a primary catchment of 35,000 people and is second only to Galway city in Connacht as a retail centre. With the seven-year capital gains tax relief scheme expiring in December there should be strong interest from both private and international investors in the retail park. Retail assets have been in demand this year, as evidenced by the sale of portfolios such as Project Acorn, Parks Portfolio and Navan Retail Park.