A LARGE grocery store at Balally shopping centre in Sandyford, Dublin, bought some years ago by a company linked to Joe O’Reilly, is being sold on the instructions of Nama.

Mr O’Reilly, whose loans have been passed on to Nama, is believed to have acquired the Balally complex for strategic reasons at the height of the property boom. A site beside it, zoned for neighbourhood use, would have provided an ideal location for a large stand-alone convenience store.

Agent Bannon is seeking €3.25 million from investors for the Supervalu grocery store which will provide an immediate return of 7.75 per cent. The shopping complex has 137 surface parking spaces and is near the Beacon Hospital.

The 1,124sq m (12,100sq ft) shopping complex comprises three adjoining units occupied under three leases with an average of 14-and-a-half years unexpired at a passing rent of €264,000 per annum. The store is one of only a handful of directly operated Musgrave outlets in Ireland. The tenant is a wholly owned subsidiary of the Musgrave Group, a €4 billion company, rather than a franchisee as would be typical.

There are also guarantees in place from Musgrave which extensively refitted the store in the past six months.

Rod Nowlan of Bannon says that unlike many over-rented banks and other grocery investments, the passing rent in this case reflected a reasonable average of €234.75 per sq m (€21.81 per sq ft).