THE IRISH TIMES, FEBRUARY 28 2024
Citypoint scheme overlooking Eyre Square has strong tenant line-up, led by US discount retailer TX Maxx
The Citypoint scheme overlooks Eyre Square in Galway city centre
Ronald Quinlan
An attractive net initial yield of 7.91 per cent underpinned by a strong tenant line-up led by the highly successful US discount fashion retailer TK Maxx is expected to drive the sale of Citypoint, a mixed-use scheme overlooking Eyre Square in Galway city centre. The property was originally developed in 2007 and extends to 7,432sq m (80,000sq) ft across six floors over a three-level basement car park. It is being offered to the market by joint agents TWM and Savills at a guide price of €21.5 million.
Citypoint comes for sale fully occupied with a weighted average unexpired lease term of 6.6 years to the nearest break option and about 8.7 years to lease expiry. TK Maxx occupies 3,716sq m (40,000sq ft) of retail space, while the office accommodation of 1,951sq m (21,000sq ft) is home to the European headquarters of US tech company Mathworks, which has been in occupation since late 2016 and expanded into the reminder of the office space in 2022 as part of the company’s growth strategy. The investment also includes a gym operator trading as Snap Fitness at part ground floor and basement levels, while the upper floors from the third to fifth floor level is operated by the Western Hotel as an aparthotel, with a total of 17 self-catering units with access to external terraces offering impressive views over the city and Galway Bay.
Citypoint is generating total passing rent of about €1.87 million annually. Sixty-one per cent of this income is secured by upwards-only or index-linked leases. The investment’s €21.5 million guide price reflects an underlying capital value of €265 per square foot, which is significantly below the reinstatement value of the building and its three levels of basement car parking.
Commenting on the sale, joint agents Sarah Winters of TWM and Brendan Delaney of Savills said: “It is rare for an opportunity like this to come to the market in Galway with a profile and lot size that will appeal to both national and international investors looking for a solid high-income return. An added incentive for investors is the fact that the purchase price is considerably lower than the reinstatement cost.”