US investor to offload Cork’s Blackpool Shopping Centre at heavily discounted €49.5m

Having paid about €115 million to acquire Blackpool Shopping Centre in 2014 and then failing to find a buyer for it at €117 million three years later, US-based investor Varde Partners has agreed an off-market deal to sell the Cork retail scheme at about €49.5 million, The Irish Times has learned. The heavily discounted sale of the shopping centre and its adjoining retail park and offices to Irish property investor Lugus Capital and London-headquartered Patron Capital is understood to be close to completion. The €49.5 million sale price represents a 57 per cent discount on the amount paid for the scheme by its outgoing owner a decade ago.

Varde Partners acquired Blackpool Shopping Centre for its part from Nama as part of Project Acorn, a retail portfolio that also included Clonmel’s Showgrounds centre and Balbriggan’s Millfield Shopping Centre. While the portfolio was offered to the market at a guide price of €130 million, Varde is understood to have paid about €171.5 million to secure ownership of it in the face of competition from several parties, including a joint venture comprising Burlington Real Estate and US hedge fund Davidson Kempner. The price paid by Varde represented a 32 per cent premium on the figure sought by the then joint agents, JLL and Bannon.

At the time of its 2014 sale, Blackpool Shopping Centre and its retail park and offices were generating a total of €8 million in annual rental income from a broad range of tenants. Some €6.7 million of the rent was being paid by the scheme’s retail occupiers, with the remaining €1.3 million coming from the development’s office accommodation. Today, The Irish Times understands the overall rent roll is closer to €6 million, with €3 million of this being generated from the centre’s retail park. The other €3 million of income comprises €2 million in rents from the shopping centre and €1 million in rent from the office accommodation.

Located on Cork’s northside, Blackpool Shopping Centre comprises about 26,870sq m (300,000sq ft) of retail and retail park space, along with 10,080sq m (108,513sq ft) of offices and about 1,800 car-parking spaces.

The Retail Park element is anchored by Woodies, Aldi, Boots and Maxi Zoo. The shopping centre comprises more than 120,000sq ft of retail and office space, plus a 75,000sq ft anchor unit owned by Dunnes Stores. Retailers in the centre include New Look, McDonald’s, Peter Mark, Vodafone, Claire’s Accessories, Boyle Sports, McCauley Pharmacy and Holland & Barrett.