ShoppingCentres: A former horse grazing farm on the edge of Swords in the early 1990s has been developed into a highly successful facility whose commercial end value could easily hit the €1 billion mark, writes Jack Fagan
Eircom Superannuation Fund displayed an uncanny foresight when it decided to forward fund the Pavilions shopping centre in the new Fingal capital town of Swords in 1999.
The investment - brought to it by its property adviser Irwin Druker of agent Druker Fanning & Partners - has paid off handsomely and the fund is about to reap the rewards from its early involvement in the site.
Leading developer Flynn & O'Flaherty, which originally bought the former horse grazing farm on the edge of Swords in the early 1990s, also did well on the project, delivering on time a high quality centre that works exceptionally well.
That company has since gone on to develop an equally impressive residential quarter on the old Phoenix Park Racecourse which has been one of the best selling developments in the Dublin area.
Because of the success of the Pavilions and the huge growth in its valuation, the centre and its remaining undeveloped lands are set to be sold for over €500 million.
The sale has been prompted by the fact that the capital appreciation in Swords - and an equally impressive performance by other properties held by the Eircom fund - has left it with no option but to restructure the portfolio by reducing its weighting in property.
Most pension funds hold no more than 11-13 per cent of their assets in property; Eircom's property holdings are clearly out of line in a fund with overall assets of €2.5 billion.
In addition to the Pavilions, the Eircom fund also holds an investment of around €150 million in Liffey Valley Retail Park; €100 million in two modern office buildings at the Sweepstakes in Ballsbridge, Dublin 4, and a €70 million stake in another office block at Adelaide Road which is let to AIB.
With Dunnes Stores as the main anchor, the Pavilions had little difficulty in lining up other major traders, such as Superquinn, TK Maxx and Argos.
It now has 65 shops and restaurants, including Boots, HMV, Mango, Pamela Scott, Golden Discs, Easons, H Samuel, Benetton Clarks, A Wear, Peter Mark and Footlocker.
The first phase has a gross floor area of 74,320sq m (800,000sq ft) with 46,450sq m (500,000sq ft) given over to shopping and the balance in a multi-storey car-park.
The Eircom fund is developing 14,864sq m (160,000sq ft) in the second phase of the Pavilions which will deliver a much sought-after leisure facility - an 11-screen multiplex cinema accommodating 2,000. The complex has been pre-let to Movies @ Swords Ltd, the same Irish company that is running a similar complex at Dundrum Town Centre.
The strong trading reputation in Swords is expected to attract some of the top fashion multiples into the second phase, including Zara, H&M, Pull & Bear, Hugo Boss, Timberland, Tommy Hilfiger, Lacoste and Monsoon. Other tenants likely to be targeted are Warehouse, Schuh, Principles, Arcadia, Pepe, Next, Game and French Connection, as well as a number of restaurants and food outlets.
