A sale and leaseback deal on Swedish firm Ericsson's office building in Clonskeagh has nearly been concluded and two stores in Limerick have been sold, writes JACK FAGAN
THOUGH the investment market continues to struggle because of the banking crisis and the collapse in property prices, sale terms have been agreed on an office investment in Dublin and two retail stores in Limerick city.
A private investor is to pay almost €10 million for an office building owned by the Swedish telecoms equipment maker Ericsson at Clonskeagh in Dublin 4.
The sale and leaseback deal, which has yet to be concluded, will show a yield of slightly over 8 per cent.
Duncan Lyster of Lisney had been seeking €10.05 million for Boole House in Beech Hill Park which he described as “one of the few rack-rented investment opportunities on offer in Ireland”. Ericsson is to sign a new 20-year lease with a break option in year 10.
The 3,941sq m (42,425sq ft) block was built in the late 1990s to a modern specification including raised access floors, suspended ceilings and double-glazed windows.
Ericsson recently completed an extensive upgrading of the upper floors, providing new ceilings, lighting, wall finishes, floors and cabling.
The rent roll of €870,000 reflects a rate €180 per sq m (€16.80 per sq ft). The lease will incorporate a fixed rental increase in five years time to €1 million per annum, increasing the overall return to 9.2 per cent.
In a separate transaction, a trader has paid close to €3 million for two adjoining shops at 67 and 68 William Street in Limerick. Joe Bohan of agents HWBC handled the sale for the Irish Property Unit Trust.
The new owners are expected to begin trading in the former Sasha store which has a ground floor area of 212sq m (2,228sq ft) and an overall area of 406sq m (4,377sq ft).
The adjoining shop, which formed part of the deal, is rented by Dixons at €180,938 per annum. Its lease gives the tenant a break option in 2016.
Sasha had been paying a rent of €191,000 until it closed. William Street is one of a number of city centre areas due to be upgraded by Limerick City Council.
The plan will include the pedestrianisation of O’Connell Street between William Street and Roches Street. The scheme comes at a time when most city centre shops are feeling the effects of a fall-off in consumer spending. This was particularly notable on Sunday in the adjoining Cruises Street where several shops remained closed and others seemed to be doing little business.
It was quite the contrary in Penneys on O’Connell Street which was packed for much of Sunday afternoon as shoppers availed of the low priced fashion goods.
One Limerick-based retail expert said city shopkeepers are bracing themselves for a difficult trading period in the run-up to Christmas because of job losses and reduced earnings.
