Two of the largest institutional investors in the country have acquired a new retail warehousing park under construction near Swords in Co Dublin for £50 million. It is one of the largest property transactions of the year.
The Irish Pension Fund Property Unit Trust and Irish Life Assurance Company have completed purchase terms for the Airside Retail Park, which is to be developed by David Daly's company, Albany Homes Ltd. Ann Hargaden of Lisney advised the two institutions and Jones Lang LaSalle represented the developer.
Last year the planners gave permission for a scaled down retail warehousing park of 194,000 sq ft after An Bord Pleanala blocked plans for a high profile scheme which would have been twice as large.
The site is located along the main Dublin-Belfast road off the first roundabout going north into Swords. It will also be close to The Pavilions shopping centre which is due to open in the centre of Swords next March.
The two institutions buying the retail park are banking on an initial rent roll of £3 million which will give them a yield approaching 6 per cent. Because retail warehousing is viewed as a growth sector, these investments are much sought after by the large funds. Rents in Airside will be between £14.50 and £18.50 with a 2,500 sq ft fast food outlet likely to make £30 per sq ft.
The success of Airside Retail Park will, however, largely depend on the appeal of the traders locating there.
Atlantic Homecare, which is taking the anchor store of 35,000 sq ft as well as a garden centre, is unlikely to generate traffic jams given that it has five other branches in the greater Dublin area alone.
The second largest unit of 30,000 is likely to be occupied by Courts, which is also trading on the Naas Road and in Arnotts. Apart from the two main units, there will also be buildings of 20,000 sq ft, 15,000 sq ft, 10,000 sq ft and 7,500 sq ft.
Albany Homes' original plans for the Swords site, a 350,000 sq ft retail park with British DIY chain B & Q in the anchor store of 110,000 sq ft, would have made it the leading retail park in the country. However, the planning appeals board would have none of it. The board accepted the argument from a neighbouring trader, Woodies, that the inclusion of a super store would have been a "category killer", hoovering up all the trade in the catchment area.
The second ground for refusing permission was that a retail park of this size would have been premature until work has been completed on a new section of the M1, from the airport to a point just north of Swords. This ruling suggests that Albany may be allowed to extend the retail park into an adjoining 10-acre site at a later stage once the new motorway has been completed. The current development will occupy a site of 13.5 acres.
