As the sales of several of Ireland’s regional shopping centres currently edge towards completion, developer Gerry Barrett has decided to seek a buyer for Scotch Hall in Drogheda. With a private investor now said to be weighing up the acquisition of the Marshes Shopping Centre in nearby Dundalk and French investor Corum closing in on the purchase for €18.5 million of Tullamore Shopping Centre, Barrett’s company, Hallscotch Ventures, is offering Scotch Hall to the market through agent Colliers at a guide price of €21 million.
The proposed sale comes just five years after the Galway developer worked with Irish investment house Cardinal Capital to refinance the loans associated with the Drogheda scheme from Deutsche Bank.
Developed in the early 2000s, Scotch Hall Shopping Centre forms part of a wider mixed-use scheme in Drogheda town centre which also includes apartments and the well-known D Hotel. The sale itself comprises 15,794sq m (170,000sq ft) of retail space together with the adjoining multi-storey car parks which provide 631 car-parking spaces. The sale also comprises an incomplete block with an expired planning consent, which offers the incoming purchaser further scope for additional residential or commercial development. Also included within the centre is a former distillery building which the selling agent says could lend itself to a number of uses including food and beverage.
Scotch Hall Shopping Centre is anchored by a substantial Dunnes Stores. The store, which is owner-occupied by Dunnes, extends to 7,804sq m (84,000sq ft) and is complemented by a range of local and international retailers, including Lifestyle Sports, River Island Waterstones, GameStop and Holland & Barrett. All told, the centre is currently producing €2.29 million in annual rental income with a weighted average unexpired lease term of just over five years. Both the centre’s current average weekly footfall of 42,000 and its rental income have the potential to grow significantly, according to the selling agent, once various asset management initiatives are implemented.
The proposed measures include the completion of the centre’s five-screen cinema and the letting of the remaining vacant units.
The sale also includes potential development opportunities on the 1.3-hectare (3.3-acre) site adjacent to the shopping centre. While this land has planning permission for 275 apartments, together with additional retail accommodation and a creche, prospective purchasers will note that the proposed scheme is currently the subject of a judicial review. Separately, an office block located along Marsh Road has the benefit of full planning permission for 21 apartments.
While Colliers is quoting a guide price of €21 million for all elements , allowing a price of €20 million for the shopping centre element of the scheme would provide the purchaser with an immediate net initial yield of 10.41 per cent rising to 12.29 per cent upon completion of the necessary asset management initiatives.
Michele McGarry, who is handling the sale on behalf of Colliers, says: “We expect strong interest in the sale of Scotch Hall which is a leading shopping centre investment that’s underpinned by an excellent mix of national and local retailers together with an unrivalled opportunity to enhance value with value add opportunities which will drive footfall and rental growth.”
