British Land is believed to be planning to offload a substantial stake in the St Stephen's Green Shopping Centre in Dublin. Sources in the investment market suggest it may be prepared to sell up to 60 per cent of its equity in the centre which has been trading exceptionally well in recent years. The company refused to comment on the move.
British Land is thought to have valued the complex at over £160 million after several years of unprecedented growth in the Dublin commercial market. A report from London yesterday indicated that a UK institution is the front runner to take a major stake in the centre. However, Irish Life has also apparently signalled its interest in acquiring a significant equity holding which could vary from 30 to 60 per cent.
The centre is probably producing a rent roll of over £6 million per annum.
About five years ago, Irish Life tried to persuade British Land to exchange equity in the St Stephen's Green Centre for a stake in the ILAC centre, but the proposal was firmly rejected by the London-based company. The 300,000 sq ft centre at the top of Grafton Street has three floors of shops, which are all occupied. Units on the main floor would attract key money of £150,000 to £200,000. The zone A rents for these shops are between £130 and £145 per sq ft compared with £275 recently agreed for a shop at the bottom of Grafton Street. The availability of a multi-storey car-park at the rear of the centre has been a boon.
British Land sold The Swan Shopping Centre, Rathmines, about two years ago after failing to turn it around and boost its value to any great extent. It holds a 50 per cent stake in Dunloe Ewart's Cherrywood development in south Dublin. British Land and its partner, Hardwicke, were responsible for most of the office developments in the main phase of Dublin's International Financial Services Centre.
In the UK, it has taken steps to reduce its gearing by selling four City buildings into a £375 million sterling joint venture with WestLB, the German bank. Like other property companies, British Land has suffered because the unpopularity of property companies on the stock market. In recent weeks, the stock market has been valuing the company at 40 per cent below the value of its assets.
