This afternoon, LaSalle Investment Management, part of the Jones Lang LaSalle group (NAMA’s Head of Portfolio Management, John Mulcahy’s former employer) has announced the purchase from NAMA of a shopping centre in Dumbarton in Scotland. The 120,000 sq ft Artizan shopping centre (pictured here) had been associated with Northern Ireland developer, Jermon Developments, though it is unclear at this stage if that company was involved in the sale. The price paid is confirmed by LaSalle to be GBP 4.85m (€5.5m). The shopping centre has substantial vacancy at present – said by LaSalle to be 33 % vacant by estimated rental value (“ERV”) and 54% vacant by net leasable area.
LaSalle report a Net Initial Yield of 13.6 per cent and a Triple Net Yield of 11.2 per cent. The price and yield might raise some eyebrows, though Scotland and Northern Irelandhave had a poor recovery from the collapse in UK commercial prices in 2007. Even today prices have only recovered across the UK to the extent of being 35% off peak values, and with regions like London and the South-East of England performing well, it is inevitable that some regions will still be in excess of 35% off peak.
Still, completed shopping centres in regional towns (21 kilometres fromGlasgow) for €43 per square foot. Might give some in Ireland pause for thought.
UPDATE: 27th July, 2011. Irish media catches up with the deal today. The Independent reports that the purchase is of a leasehold interest and is the seventh acquisition of a shopping centre by LaSalle in the UK “since 2009”. The Irish Times reports that the centre had previously been purchased by Jermon in 2006 for GBP 17.8m.