WANT TO buy almost half a street in Dublin's south-inner city? Investors lucky enough to have access to ready cash or bank credit are about to get a chance to buy five adjoining retail buildings on Castle Market, the busy Victorian shopping and dining enclave that links Drury Street with South William Street.
Domhnaill O'Sullivan of Savills is seeking offers over €2.7 million for the fully let parade of shops that were bought by property developer Bernard McNamara in June 2007, for about €12 million. The investment is now being sold on the instructions of receiver Declan Tate of RSM Farrell Grant Sparks, who is acting for Nama. McNamara has debts estimated at €1.5 billion following the property crash.
The Co Clare developer beat off stiff competition to buy the five redbrick buildings from two other property developers, Francis Rhatigan and Chris Jones of Ellier Developments, just as the market moved into dangerous territory.
The Rhatigan/Jones partnership also sold five other buildings on the same pedestrianised street to private investors, netting about €33 million in all from a retail portfolio they had bought only four years earlier from Green Property for €13 million.
McNamara had to settle for an initial return of only 1.68 per cent on the Castle Market investment. If Savills now manage to achieve the asking price of €2.7 million, the yield will be a much-improved 9.1 per cent.
Domhnaill O'Sullivan says the buildings are "not dramatically over-rented" - the contracted rents with upwards-only reviews clauses come to €257,000.
Interestingly, Savills plan to offer the five shops for sale in individual lots if they fail to attract an overall buyer. Even with the immense scarcity of bank debt, there are bound to be any number of investors willing and able to take a punt in one of the most fashionable parts of the city centre.
The largest and best located of the five buildings is No. 10/11 at the junction of Castle Market and Drury Street which is occupied by Ann Tucker's Costume store. The contracted rent for the 147sq m (1,582sq ft) building is €60,500.
Next door Crown Jewels has a contracted rent of €54,500 for the building which extends to over 83sq m (893sq ft). No. 23 Castle Market is let to Susan Smith's The Harlequin business at a contracted rent of €42,000 per annum. The overall floor area is slightly above 86sq m (926sq ft).
The long-running Murphy Sheehy company has a contracted rent of €52,500 for 85sq m (915sq ft) of space in No. 15. The smallest of the five buildings, with over 80sq m (861sq ft), is La Maison Des Gourmets, whose rent is €47,500.
Whatever buyers end up paying for any of the five stores, it is likely to be a long way from the prices paid for two corner buildings on the opposite side of the street in 2007. The former Cookes restaurant - now Gourmet Burger - was bought for €5.8 million while the old Helen McAlinden store cost €4.78 million.
The €12 million paid by McNamara for the five buildings was small potatoes compared to some of his purchases in May 2007. He paid €288 million for the 3.8-acre Burlington Hotel and grounds, and before that teamed up with Derek Quinlan to pay €412 million for the 24-acre Glass Bottle site at Ringsend.
