Company pays Pounds 8m for retail portfolio

DUBLIN property company Duke House Properties is to pay close to Pounds 8 million for three shopping centres - Janelle at Finglas in Dublin, and others in Dundalk and Athlone. There has been a fall off in business at all three centres, which are producing an annual rent roll of just over Pounds 1 million.

The sale will allow Merchant Investors Assurance Company to withdraw from the Irish property market after seven years of mixed fortunes.

Robert Neill's Duke House group, which is to retain ownership of the three shopping centres, was heavily involved in the retail market up to a year ago when it managed the Town and County portfolio of retail investments in the provinces.

MI first entered the Irish market in 1989 when it bought a group of shopping centres and a Dublin office block from Monarch Properties for Pounds 23 million. The company made a quick killing by selling on the Nutgrove Shopping Centre in Rathfarnham to Allied Irish Investment Managers for close to Pounds 10 million. It could also have made a handsome profit on some of the other centres but did not sell the Drogheda and Navan shopping centres until the market had slowed down.

This week's decision by MI to offload the remaining three centres to Duke House is not an unexpected move by a company which in the early days failed to show any deep commitment to the Irish market.

The three centres are all facing difficult times ahead. Janelle is trading well below its potential partly because a 10,000-square-foot department store has been closed for about 12 months. It was occupied for a short period by Ben Dunne's company, H and I Supplies, after he split from Dunnes Stores. Five other shops are also vacant in the centre, which is producing slightly under Pounds 200,000 a year.

The Dundalk centre also suffered a major setback when a rival shopping centre, The Long Walk, opened in the town.

One of MI's anchors, Penneys, switched to the new centre, leaving its 20,000-square-foot department store vacant. Half of this space has since been taken up by Quinnsworth but the remaining 10,000 square feet is still empty along with five other shops. Dundalk is producing Pounds 500,000 annually and has been refurbished at a cost of Pounds 1 million.

There is an even bigger question mark over the future of the Athlone centre because tax designated status was granted to another site in the town where developer Owen O'Callaghan plans to build a rival Pounds 20 million shopping centre.