A private investor has outbid eight others to buy a Tesco-occupied store in Terenure, Dublin 6W, for more than €3 million – more than €700,000 above the guide price. The yield will be about 5.25 per cent, according to Ross Fogarty of selling agent Knight Frank.
The store opened for business just over a year ago and is let to Tesco Ireland on a 25- year lease from last September. The current rent of €150,000 per annum is due for review every five years in line with the Consumer Price Index. Additional revenue of €15,635 per annum comes from two billboards on the site.
The lease includes break options in years 10 and 15, leaving the new owner with an unexpired term of about 8.75 years.
Mr Fogarty said the strong bidding for the investment from high net worth individuals underlined the shortage of similar properties with grade A tenants.
Store spec
The Tesco Metro store formerly traded as Quinlan's bar. It was entirely remodelled and renovated last year to facilitate the letting to the supermarket multiple.
It has a ground floor retail area of 675sq m (7,265sq ft), with a further 360sq m (3,874sq ft) of ancillary space at first floor level. The overall site extends to 0.179 of a hectare and can accommodate 33 cars.
Although Tesco is beginning to feel the effects of strong competition from German discounters Aldi and Lidl, there is still a huge investor appetite for its stores as underlined by recent sales in Roscrea, Rathmines and Crumlin.
Agents Bagnall Doyle MacMahon advised the purchaser of the Terenure investment.
