Tesco buys 12 acres in Malahide for major supermarket

Tesco has made its first major purchase of land for a shopping centre in Dublin. The new retail development will be located on a key site close to the end of the M50 motorway at Ayrefield, near Malahide. It is thought the UK group paid between £11 million and £12 million for about 12 acres, where there is planning permission for a shopping centre. Several supermarket giants are known to have been in competition for the site, which was sold by businessman Albert Gubay. He has retained another part of the site for a leisure and fitness centre. Property sources suggested yesterday that the British supermarket chain, Safeway, and its Irish partner, Fitzwilton, may have been one of the under-bidders for the site.

Safeway plans to spend more than £250 million over the next five years to build up a chain of 20 stores in the Republic. Tesco, which took over the Quinnsworth, Crazy Prices and Stewarts operations in the Republic and the North, is likely to seek planning permission for a standalone store of between 50,000 and 70,000 square feet on the Ayrefield site.

The development is likely to include a petrol retail outlet in keeping with a formula successfully developed in the UK.

Ayrefield is acknowledged as a first-class site for a shopping complex because of its strategic location near the M50. It is also within easy access of a huge population in north Dublin. The purchase may well signify the start of an aggressive policy by Tesco to retain its dominant position in the grocery market, particularly against outsiders like Safeway.

With few remaining opportunities available in Dublin for major supermarkets, it seems inevitable that both Tesco and Saveway, as well as other supermarket chains, will be in competition to open a major outlet at the shopping centre under construction at Quarryvale in west Dublin. The developers took the market by surprise last spring when it let the third anchor store to Boots rather than Quinnsworth. The main anchor, Marks & Spencer, handles a specialised range of foodstuffs but does not operate as a conventional supermarket.

It seems inevitable that planning permission will be sought at a later stage for a stand-alone supermarket close to the shopping centre. If planning for such a development is forthcoming, Tesco and Saveway will be the main contenders for it.