Liffey Valley shopping centre could make €500m

With Dublin's largest suburban shopping centres at Dundrum and Blanchardstown about to be taken over by overseas owners, the newly extended Liffey Valley shopping centre in west Dublin may also end up on the international property market.

Leading figures in the Dublin investment sector are convinced that the fast-improving centre will also be offered for sale later this year after the two rival shopping facilities were sold for better than expected prices.

US investment company Blackstone bought Blanchardstown for €950 million while the UK's Hammersons and Germany's Allianz Real Estate paid €1.85 billion for Dundrum and for 50 per cent of the Ilac in the city centre and The Pavilion in Swords as well as a development site off O'Connell Street. The three existing investment companies with an interest in Liffey Valley will also be anxious to capitalise on the ongoing recovery in the Dublin commercial property market and particularly in the retail sector.

Informed sources suggest they will be hoping to secure in excess of €500 million for the centre which has a rent roll of around €30 million from more than 80 stores including Marks & Spencer, Dunnes Stores, Next, Boots and the 3,500-seater Vue Cinema.

HSBC Alternative Investments are by far the largest shareholders in the centre having paid €253 million alongside co-owner Hines for a 72.8 per cent stake more than two years ago. The remaining shareholding is held by the UK property giant Grosvenor Estates. The Liffey Valley rent roll is to get a further boost later this year when Penneys begin trading from a new 4,645sq m (50,000sq ft) anchor store alongside six new restaurants. The Penneys store, expected to bring in a rent of close to €1 million per annum, forms part of an ongoing €26 million extension – the first significant retail expansion in the Dublin area since the property crash nine years ago. The new three-storey building will add 10,500sq m to the original centre, bringing the overall floor area up to about 57,100sq m (614,612sq ft).

Liffey Valley benefits greatly from its pivotal position on the M50 and its 3,000 surface car parking spaces. However, it is at a considerable disadvantage to nearby Blanchardstown in that it does not have a full scale supermarket. Tesco had been expected to rectify this shortcoming after buying an adjoining six-acre site during the boom for a figure reputed to be in the region of €30m.

The UK multiple says this supermarket "continues to be on our property road map" but it is thought unlikely that the project will proceed anytime soon because of Tesco's trading difficulties and the strong competition here from its rivals, SuperValu, Dunnes Stores and the two German discounters Aldi and Lidl.

Some investment advisers are convinced that the owners of Liffey Valley will not put the centre on the market until they receive planning approval from South Dublin County Council for a major expansion to include an Olympic standard ice skating arena with a capacity to host events for 2,500 people. Council planners have sought additional information about the two to three-storey extension of the centre which would bring in two major anchor tenants and up to 60 new shops and restaurants. The 51,545sq m extension would also include a 1,800 space multi-storey car park.