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1,2 & 3 Stephen’s Place, Castlebar, Co. Mayo

The guide price of €1,200,000 reflects a Net Initial Yield (after standard purchaser’s costs of 9.96%) of 7.5%

QRE Real Estate Advisers have brought a rare long-term investment opportunity in Castlebar, Co. Mayo to the market with a guide price of €1,200,000. The property, which the agents point out is an ideal pension investment is situated on Spencer Street in the centre of Castlebar forms part of a wider mixed-use investment known as Stephen’s Place. The entire property extends to approximately 5,651 sq. ft. (525 sq. m.) and is arranged over ground floor, with ample surface car parking to the rear.  

Unit 1 is occupied by DP Realty Ltd t/a Dominos Pizza and comprises an extensively glazed retail unit with collection area to the front with kitchen and storage to the rear. The unit extends to approximately 1,130 sq. ft. (105 sq. m.). Dominos Pizza occupy Unit 1 under the terms of a 20 year and 1 month FRI lease with lease expiry in February 2028. The lease provides for a break option in February 2024. The current passing rent is €18,200 p.a. (which is formally abated) and is due to increase to €35,000 p.a. in February 2024. 

Units 2 & 3 are occupied by Rehabcare and extend to approximately 4,521 sq. ft. (420 sq. m.). The unit has just undergone a brand-new fit-out and is utilised as a ‘best in class’ day centre for people with disabilities. The centre is Rehabcare’s long-term centre for Mayo and the West of Ireland. Planning permission has recently been granted to allow for a change of use from retail to the current use. Units 2 & 3 are let by way of a new 15-year FRI lease to The Rehab Group t/a Rehabcare at a current passing rent of €81,600 p.a. The lease provides for a break option on the expiry of the 10th year of the term. There is a CPI linked rent review (cap and collar of 5%) on the first day of the sixth year of the term and an open market rent review five years thereafter. 

The guide price of €1,200,000 reflects a Net Initial Yield (after standard purchaser’s costs of 9.96%) of 7.5%. However, in the event that Dominos Pizza do not exercise their break option, the net return to an investor will rise to 8.83%. The agents estimate that the Weighted Average Unexpired Lease Term (WAULT) to lease expiry is circa 13.25 years and in the event of break options is still circa 8.5 years. Both leases are Full Repairing and Insuring and both tenants bear responsibility for full local authority rates, service charge and insurance. 

Harry Byrne and Bryan Garry of QRE comment “Given the shortage of similar long term income properties available in the market at present, we anticipate that the long-term income on offer to an exceptional covenant (in Rehabcare) coupled with a strong funding model and brand-new fit-out will be of keen interest to investors right throughout the country. In addition, the reversionary nature of the Dominos Pizza will provide investors with the opportunity to enhance their returns or seek alternative asset management initiatives in the near future.’ 

For further information or clarification, please contact Harry Byrne or Bryan Garry of QRE or  
0868556927 or 0833918649 

written by

May 2022