US investment firms buy shopping malls in Navan and Mullingar

Two more Irish shopping centres have been acquired by US investment groups.

Davidson Kempner has purchased a majority stake in Navan Town Centre in Co Meath for about €62 million, while Oaktree has been the top bidder at €12 million-plus for the Fairgreen Shopping Centre in Mullingar, Co Westmeath.

Joint selling agents Cushman & Wakefield and Savills expect the Navan investment to show a net yield of 7.31 per cent, while Mullingar is due to produce a return of 8.13 per cent on the net operating income. Loans underpinning both shopping centres were bought by CarVal when the market crashed.

Irish portfolios

The two centres have been managed over the years by local developers Duignan & McCarthy and continue to trade successfully largely because of a strong line-up of traders.

Davidson Kempner has been one of the most active overseas investment groups in the fast-changing Irish property market.

In one deal, it paid €170 million for a portfolio of retail parks, including Nutgrove in Rathfarnham, Letterkenny in Co Donegal, Tullamore in Co Offaly and Deerpark in Killarney.

Oaktree, the world's largest distressed debt investor, has also built up a substantial Irish portfolio. Two years ago it joined Nama and construction firm Bennet Group in a €450 million venture to develop offices and apartments in the Dublin docklands.

Two-thirds interest

The Navan sale includes Duignan & McCarthy’s 66 per cent interest in the centre, which was originally developed in 1980 by Phil Monahan’s Monarch Properties. It was extended several times since then.

The balance of the shares in the retail centre are held by Irish Life.

Duignan & McCarthy’s shareholding generates an operating income of €4.7 million from the Navan centre, which has an overall retail area of 23,225sq m (250,000sq ft).

The highest rent – €478,000 – is paid by Marks & Spencer for a food and fashion store owned by Duignan & McCarthy and extending to 2,230sq m (24,000sq ft). The other main shops owned jointly by Duignan & McCarthy and Irish Life are New Look, which pays a rent of €451,000; Heatons (€450,000); Boots (€400,000); Argos (€280,000); Easons (€250,000); River Island (€200,000); Dealz (€300,000) and Jack & Jones (€135,000).

The largest single rental contribution is the €1.2 million earned from two multistorey car parks. The centre is also anchored by Tesco, two Dunnes stores and Penneys.

Fairgreen shopping centre, which dates from 2005, is producing a net rental income of €920,000. The 9,754sq m (105,000sq ft) centre has eight large stores. These include New Look, which pays the top rent of €230,000.

Crowd puller TK Maxx pays a rent based on turnover, while the other tenants include Dorothy Parkins (€180,000); Dealz (€140,000); Elverys Sports (€120,000) and Costa Coffee (€55,000).