City centre shops in top retail precinct for €4.5 million

Two investments in the highly successful Edward Square shopping enclave in the centre of Galway are being offered for sale this week on the instructions of Bank of Scotland.

Simon Plunkett of Douglas Newman Good Commercial is seeking €4.5 million for the shops, Cara Pharmacy and Warehouse, which will give investors a net initial return of 7.45 per cent. Plunkett is confident of offloading the two investments shortly because of the renewed interest by Irish investors in the repriced retail sector, the scarcity of well located stock and the undoubted success of Edward Square which links up with Eyre Square shopping centre.

A year ago, the remainder of Edward Square was sold to Signature Capital, a Dublin-based investment company, for €27.3 million in a deal which is showing a yield of 8.7 per cent.

On this occasion the two shops are to be offered for sale individually or as one lot. A price of €3 million is being sought for the Cara Pharmacy Building, a mixed-use block with three floors of retail space and two floors of offices. Cara Pharmacy is paying a rent of €200,000 with a potential turnover top-up limited to €225,000 under a 15-year lease from last August. There will be a break option at the end of the tenth year.

The office space on the upper floors is let on a short term licence at €25,000 per annum. The €3 million price tag would show a net initial yield of 7.18 per cent.

The agent is seeking €1.5 million for the Warehouse Fashion store which is currently rented at €125,000 per annum under a 20-year lease from 2007 with a break option in 2023. The yield in this case will be 7.98 per cent.