Five city centre shops in single €8m lot

Five retail units located in Morrison Chambers at the junction of Dawson Street and Nassau Street in Dublin city centre are to be offered for sale in a single lot at about €8 million, a price that will give a new owner a net initial return of 6.58 per cent.

Jacqueline Fitzpatrick of Jones Lang LaSalle is handling the sale for Lone Star, which acquired the shops as part of AIB's Project Kildare, which was sold by Nama.

The five shops at 1 Dawson Street and 27/32 Nassau Street are currently producing a rent roll of €548,000, which is due to increase further through a stepped rental increase and a turnover top-up agreement.

The shops are at street and basement level covering an area of 1,068sq m (11,500sq ft). The upper floors of the early 20th-century Morrison Chambers are mainly used as offices and are separately owned.

The retail units include the landmark former banking hall now occupied by Costa Coffee, with the main entrance on the corner of Dawson Street and Nassau Street.

The tenant, MBCC Foods (Ireland) Ltd, is paying a base rent of €100,000 as well as 15 per cent of the gross turnover after the rent has been discounted. There is also a break option in 2021 on the building which has double-height ceilings and decorative cornicing.

The main shop is operated as a food outlet by KC Peaches (Ireland) Ltd at a rent of €170,000, which is due to increase to €185,000 by May 2014 and to €200,000 by May 2015. The company’s 15-year lease provides for a break option in 2018.

The three other tenants are Trinity Sweaters, which pays a rent of €105,000; Trinity Crafts (€80,000); and Kevin & Howlin, (€60,000 per annum).

Jacqueline Fitzpatrick said it was rare for five adjoining shops to go for sale in an exceptionally busy area of the city, just 100 metres from Grafton Street and directly opposite a busy entrance to Trinity College. Both KC Peaches and Costa are believed to attract much of their business from the college.

Lone Star is expected to offload other properties from the Kildare Project, which had a nominal value of about €650 million at a near 60 per cent discount. The portfolio comprised about 70 loans secured by an underlying collateral pool of more than 400 properties, including hotels, nightclubs, shopping centres and offices in Dublin and the regions.

About 90 per cent of the properties in Kildare are located in Ireland with the balance in the UK.