Having failed to secure a buyer when it was put up for sale by its previous owners Green Reit in 2016, the Arena Centre in Tallaght is being offered to the market once more at a guide price of €45 million.
The sale of the investment by agent JLL comes just more than three years on from its acquisition by UK-headquartered private equity real estate manager Henderson Park, which secured ownership of the scheme as part of its record-setting €1.34 billion purchase of Green Reit.
Located at the junction of the N81 and Whitestown Way in Tallaght, south Dublin, the Arena Centre is a substantial mixed-use development extending to 321,385sq ft in total.
The scheme comprises 99,324sq ft of retail space across eight units, 98,137sq ft of office accommodation, a 119-bedroom Maldron hotel, which includes an adjoining leisure centre, and a central surface car park which provides car parking for retail customers.
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The investment is 98 per cent occupied and offers an attractive weighted average unexpired lease term (WAULT) to break/expiry of approximately 6.8 years and an annual income of €3.77 million.
Should a sale proceed at the guide price of €45 million, the prospective purchaser would stand to benefit from an initial yield of 7.62 per cent.
The Arena Centre’s top three tenants – Woodie’s (Grafton Group Plc), Bank of Ireland and the Maldron Hotel (Dalata Group) make up 91 per cent of the passing rent, creating low-maintenance asset management for an incoming purchaser.
In the case of Woodie’s, its retail unit extends to 54,405sq ft of retail space and includes a large garden centre. The unit has been occupied by Woodie’s as a DIY store since 2007 and has more than nine years remaining on the lease. The well-known retailer also operates its Irish headquarters from office space at the Arena Centre.
Bank of Ireland’s 365 call centre headquarters have been based at the Arena Centre since 2008. The bank recently opted not to exercise its 2023 break option.
The Maldron Hotel (owned by The Dalata Group), the third largest tenant by income, occupies the scheme’s hotel and leisure centre.
All three tenants are on either upwards only or CPI-linked rent reviews providing certainty of income for an incoming purchaser. The Maldron Hotel lease also has an upcoming CPI-rent review which JLL estimates will provide for an uplift of more than 10 per cent on its passing rent.
Located in the heart of Tallaght, the Arena Centre benefits from a large catchment of almost 400,000 people in the south Dublin region.
The scheme is situated close to The Square Shopping Centre, Tallaght Business Park, Tallaght Stadium, Tallaght University Hospital and Technological University Dublin. The location is served by a number of public transport links, including the Luas red line and Dublin Bus.
While Henderson Park would appear, on the face of it, to be seeking substantially less than the €65 million guide price attached to the Arena Centre in 2016, the current sale does not include 63 apartments that were included as part of that original process. Green Reit sold the apartment portfolio to UK-based SeaPoint Capital for €9.25 million in 2017. Also excluded from the latest sale are the Arena Centre’s Lidl store, which is owner-occupied, and a further 167 apartments which are held by a mix of owner-occupiers and private investors.
Henderson Park’s decision to sell the Arena Centre is consistent with its strategy of disposing of certain assets from the Green Reit portfolio and investing the proceeds in its Irish development pipeline.
Brian Shields, who is handling the sale on behalf of JLL, says: “The Arena Centre is a landmark mixed-use asset in Tallaght which benefits from a great location in Dublin’s largest suburb.
“We expect to see good levels of interest from prospective buyers seeking the strong income returns this asset offers which are supported by a strong and diverse tenant profile.”
