Life assurance company, Friends First has acquired the majority stake in the Blackrock Shopping Centre.
Friends First previously owned 34% of the Blackrock Shopping Centre through an internal fund and it has now, through the Friends First Irish Commercial Property Fund (the Fund), acquired the remaining 66% of the centre from Musgrave Operating Partners Ireland, in a deal signed this week.
Commenting on the deal, Eugene Gibney, head of Friends First’s Investment Division, said: “We are delighted to be in a position to acquire the majority interest in the Centre in an ‘off-market’ transaction and we plan to further invest in this asset to drive footfall at this prime location. The Irish commercial property market has become increasingly competitive in recent months, with a large pool of local and international investors, chasing a limited supply of prime retail assets, so this opportunity delivers real value for our investors.”
The Blackrock Shopping Centre (which includes adjacent offices) is currently generating a rental income in excess of €5m per annum and based on the acquisition price, this is an implied overall initial yield of 9.3%. Musgrave Operating Partners Ireland is the anchor tenant in the Centre and the sale of Blackrock Shopping Centre will have no impact on the day to day operations of the current tenants of the centre. The offices are multi-let, with Zurich Insurance occupying the majority of space.
On completion of the purchase, the initial yield for the Friends First Irish Commercial Property Fund will improve to 7.87%. With most of the units occupied at the centre, the acquisition will reduce the fund’s vacancy rate by capital value from 7.59% to 6.62%.
Friends First is actively reviewing other similar market opportunities. “We are delighted to be able to deliver this transaction which significantly enhances the value of the Friends First Irish Commercial Property Fund while allowing us to deliver an improved yield to our investors,” added Gibney. “In addition, the centre offers a range of improvement options from minor reconfiguration works to a more fundamental upgrade of the infrastructure to enhance the shoppers’ experience,” according to Gibney.