The Royal Liver Retail Park at the Naas Road in west Dublin is on the market needing a makeover or redevelopment, writes Jack Fagan
Ireland's first purpose-built retail warehousing park, Royal Liver Retail Park at Naas Road in west Dublin, is going for sale today after a long period of declining sales in most of its outlets. The facilities and the mix of traders have not been changed for several years.
DTZ Sherry FitzGerald is quoting €45 million for the investment - representing an initial return of 4.3 per cent - but the selling price is likely to be significantly higher given the obvious potential to redevelop the high profile eight-acre site fronting on to the Naas Road.
Whoever buys the park - and there will be no shortage of bidders for it - will have the advantage of an income stream of €2.167 million until they secure planning to redevelop the site.
One option will be to seek permission for additional retail warehouses and an underground car-park. Alternatively, the new owners may decide to retain the present retail units - totalling 12,051sq m (129,730sq ft) - and use the remainder of the large site for a mixed development which could include a hotel, apartments, shops and basement car-parking.
The availability of the Luas service immediately beside the park will strengthen the case for allowing a high density scheme with a new streetscape along the Naas Road.
Royal Liver's advisers showed considerable foresight in assembling land for the park in the 1980s and, when the new style shopping facility for bulky goods opened in 1990, it was constantly thronged.
The two anchor stores, Homebase and Atlantic, signed 35-year leases and, though it took some time to find suitable tenants for several other buildings, the park traded successfully for years.
However, in time the Liverpool-based Royal Liver failed to capitalise on the great location. Neither the facilities nor the mix of traders changed much over the years despite the emergence of new competition from rival parks. And when Rocca Tiles closed down about three years ago, a replacement tenant was never found despite the buoyant DIY market in the Dublin area.
The decision by Woodies to build a large stand-alone store less than a mile away along the Naas Road had an immediate effect on the level of business in the Royal Liver park but the opening by B&Q of major outlets in Liffey Valley and Belgard Road proved even more damaging.
The park has never recovered since then and, in addition to the vacant Rocca Tiles store, Bargaintown has also been seeking a buyer for its lease.
Despite its highly visible location along the busy Naas Road, Royal Liver park has poor access from the back of the site.
A new owner will undoubtedly try to persuade the planners to permit the opening of a slip road off the Naas Road directly on to the park. This may be allowed because of the increased difficulties faced by motorists since a large section of the Naas Road was given over to the Luas.
Homebase currently pays a rent of €692,007 for a store of 4,160sq m (44,785sq ft) while Atlantic's rent is €486,000 for a building of 2,580sq m (27,773sq ft).
The other main tenants are Bargaintown (€319,000); Reid Furniture (€266,645); Carpet Right (€212,100) and Harry Corry (€191,908).
With all the rents due to be reviewed over the next three years, Sean O'Neill of the selling agents says there is "significant potential" for rental growth.
Rents for the park, he said, were considered low at €15 to €20 per sq ft (€161.4 to €215.2 per sq m) whilst new lettings elsewhere in Dublin were between €30 and €35 per sq ft (€322.9 and €376.7 per sq m).
Royal Liver has offloaded much of its Irish property portfolio in recent years.
Two years ago it secured over €55 million for a range of investment properties on Chatham Street in Dublin 2, including nine shops, the Zerup shoe store at 57 Grafton Street and five retail investments at The Square in Tallaght.
