Two major property investment deals worth a combined €60m completed in Cork City

TWO major property investment deals, with a combined value of over £60m, have just been completed in Cork at Eastgate Retail Park, which has been sold to Australian retailer and park tenant Harvey Norman for around 24 million euros, as well as a student complex of 342 beds in the western suburbs by MTU, up to 40 M€.

The Eastgate deal is Harvey Norman’s first property investment in Ireland, where it operates at 16 locations to date, and is also notable as it sees the online and in-store retailer invest in outlets here with co- anchors/other tenants.

Harvey Norman has occupied 48,000 square feet in Cork’s Eastgate business park, where the main anchor is The Range in a 60,000 square foot unit, which arrived five years ago in the largest unit which, at a point, vied with Mahon Point to clinch Cork’s first. B&Q store, which is now in Mahon. Other retail occupiers who are now tenants of the Harvey Norman property wing in Cork include EZ Living, Tubs and Tiles, Airtastic Entertainment Centre, Jysk and Tile Haven.

The Range is the anchor tenant of Eastgate Retail Park, new investor owner and co-tenant Harvey Norman in the 175,000 square foot 35-acre development of the larger 120-acre mixed-use park being developed by the O’Flynn Group. Photo: Eddie O’Hare

The park comprises approximately 175,000 square feet of fully occupied retail space, which sits on 35 acres of the 120-acre Eastgate Global Development, delivered by the O’Flynn Group over the past 20-25 years.

The Eastgate mixed-use development, just east of the Jack Lynch Tunnel and near Little Island, also includes an 800,000 square foot business park, shopping center and shopping village with local services. No other element of the scheme was involved in this recently concluded investment agreement.

Both O’Flynn Group and Harvey Norman declined to comment on the off-market investment deal, with local sources saying negotiations with another third-party investor were underway but had not progressed and Harvey Norman then moved on to the foreground.

Agent Michele McGarry of Colliers acted in the Eastgate deal for Harvey Norman Ireland but would not comment on his client’s behalf, while other sources say the rent could have been order of 1.6 million euros, posting a yield of approximately 6%. However, this unconfirmed rough figure/return is changing as Harvey Norman is now both occupier and owner.

Cushman & Wakefield generally acts on sales and rentals for the O’Flynn Group, but that deal may have been brokered internally by the O’Flynn Group, which also declined to comment.

A sale price of €24m for a retail park investment is circulating in investor circles, without specifically identifying the property as being in Eastgate.

Our records show that O’Flynn purchased the land for the visionary Eastgate project 25 years ago from landowner Billy Ellis for €30/€40,000 per acre or c€4m, excluding the period house which later became part of the entirely separate Radisson. Hotel on the edge of the N25.

The publicly listed Australian company has a business model that sees it invest in property as well as its core retail business, in Australia, New Zealand, Slovenia and now Ireland.

He has a portfolio worth 3.4 billion Australian dollars (2.34 billion euros). It made $9.7 billion or €6.85 billion in sales in 2021, according to its business update, up from 2020.

c A €40 million deal set up in the 340-bed student accommodation development at Melbourn Point, near the MTU campus on Melbourn Road in Cork
c A €40 million deal set up in the 340-bed student accommodation development at Melbourn Point, near the MTU campus on Melbourn Road in Cork
  • Meanwhile, across Cork City, an even bigger investment deal worth an unconfirmed €37-40m has been struck, for a 340-bed student accommodation development fully completed and occupied, Melbourne Point, adjacent to the main campus of Munster Technological University (MTU), first let September 2021.

The sale equates to an average of c€114,000 for each (single) student bed, which rents between €230 and €250 per week, according to the website of Yugo (formerly Uninest) which also runs Melbourn House, Amnis House on Western Rd, and Lee Point at the former site of Beamish & Crawford on South Main St.

Rates at Cork’s three Yugo centers are around €1,000 per month per bed, with apartments ranging from three to eight en-suite bedrooms each.

Rooms at Melbourne Point earn €1,000 a month and the investment deal values ​​them at around €114,000 per bed.
Rooms at Melbourne Point earn €1,000 a month and the investment deal values ​​them at around €114,000 per bed.

The development, with 62 apartments and 340 beds, was built on the former site of O’Mahony Packaging behind Cork County Council’s car tax office, with planning granted to a company Montesa Ltd, then acquired and built by Cork developers CitiStudent Ltd, separate from active homebuilders Citidwell Homes.

The buyer/fund has not yet been identified.