Avoca’s Kilmacanogue and Rathcoole stores hit the market with €29m price tag

Having paid about €22 million to acquire two of Avoca’s flagship premises from the retailer’s US-headquartered owner, Aramark, in 2017, Irish retail property investor Signature Capital is now looking to dispose of the properties.

The sale of Avoca’s outlets at Kilmacanogue in Co Wicklow and Rathcoole in Co Dublin is expected to provide Signature’s private clients with a healthy return on their original investment. The two properties are being offered to the market by joint agents JLL and TWM, fully let to Avoca until 2047, with Aramark (US) as guarantor, at a guide price of €29 million.

Avoca Kilmacanogue is arguably the retailer’s best-known outlet apart from the company’s original mill in Avoca village. Located just off the N11, the store, which first opened for business under Avoca’s former owners, Donald Pratt and his wife Hilary in 1979, has long proved to be a draw for the affluent and densely populated south Dublin and Wicklow catchment area. It is also hugely popular with tourists and day-trippers travelling to the nearby attractions of Glendalough and Avondale Forest Park.

Avoca Kilmacanogue comprises a distinctive lifestyle and retail premises extending to 2,570sq m (27,663sq ft) on a landscaped site of 6.39 hectares (15.79 acres). Developed over a number of phases, the accommodation includes a large retail offering consisting of convenience, food, homewares and fashion, together with the Sugar Tree Cafe, Fern House Restaurant, a bakery, garden centre, ancillary accommodation and extensive cold-storage facilities.

The site may have longer term potential for residential development, subject to planning permission, according to the selling agents.

Avoca’s Rathcoole outlet is located just off the N7 Naas Road, close to junction 4 of the M7/M50 interchange, and about 16km southwest of Dublin city centre.

Developed in 2007, the property comprises a three-storey building of 3,964sq m (42,668sq ft) on a site of 1.6 hectares (3.95 acres) with frontage to both the N7 Naas Road and Fitzmaurice Road.

The ground floor consists of extensive retail and ancillary space, while the first floor is home to the Egg Cafe and Birdcage Cafe, together with kitchen facilities and balcony seating areas. The second floor comprises modern office accommodation accessed via a dedicated entrance and passenger lift, with a mix of occupiers including Avoca.

Both the Kilmacanogue and Rathcoole properties are let on long-term leases with 21 years left until expiry. The tenant is currently paying total annual rent of €1,680,000. Rent reviews occur every five years and are linked to the Consumer Price Index (CPI), subject to a 3.5 per cent annual cap and -0.5 per cent annual collar, compounded annually.

The rent is guaranteed by Avoca’s parent company Aramark (US). Aramark acquired the Avoca business from the Pratt family in a €66.7 million* deal in 2015.

The next CPI rental uplift is due in September 2027, with the rent payable increasing to €2 million at that time. The vendor is providing a rental underwrite to ensure that the incoming owner will secure a yield of 6.2 per cent based on the asking price of €29 million.

Sean O’Neill of TWM says: “Opportunities of this calibre rarely come to the market, combining the security of such a recognisable tenant with the benefit of long-term secure income. This portfolio offers investors an exceptional opportunity to secure stable and predictable cash flows, making it particularly attractive to those seeking wealth preservation, inflation protection and long-duration income in a premier retail and hospitality asset.”

Max Reilly of JLL adds: “This is an exceptional asset with long-term, inflation-proof income backed by an outstanding guarantor.”

*This article was amended to include the correct price paid by Aramark for the Avoca business. Reports published in 2015 and 2016 suggested the deal carried a lower value of between €51 and €60 million