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Freehold retail unit?

  • 12-01-2012 2:47pm
    #1
    jetski
    Registered Users, Registered Users 2 Posts: 820 ✭✭✭


    Hi all,

    What would you opinion be of such a property?

    Latest price is down to 195k and currently being leased @ 14400 per year and is offered for sale as freehold.

    http://www.daft.ie/searchcommercial.daft?id=84755

    Do you think this would this be a worth while investment?


Comments

  • #2
    finisklin
    Registered Users, Registered Users 2 Posts: 1,524 ✭✭✭finisklin


    Yield of 7.4% is way above what it was during the boom years!

    Is the tenant locked into a long term, water tight lease?

    Given the way retail is at the moment I can only see the rent coming down.

    Tesco UK sales dropped by 2.4%, this is just as an aside but shows how people are not spending. This business has to be also up agin it in that many immigrant are returning home. Best to keep your cash, IMHO.


  • #3
    coylemj
    Registered Users, Registered Users 2 Posts: 25,620 ✭✭✭✭coylemj


    finisklin wrote: »
    Is the tenant locked into a long term, water tight lease?

    Given the way retail is at the moment I can only see the rent coming down.

    Tesco UK sales dropped by 2.4%, this is just as an aside but shows how people are not spending. This business has to be also up agin it in that many immigrant are returning home. Best to keep your cash, IMHO.

    I'd be inclined to agree but for a different reason, the tenant could move premises overnight if he didn't want to renew the lease which by the way is a 'short term lease' according to the entry on daft.ie

    All he has in the way of fittings are refrigerated displays and shelf units which look fairly mobile to me. Even the fact that it's a corner unit doesn't add any value because there's virtually no visibility on the Nth Gt. George's St. side.

    But.... there could be good demand for units in the area because I believe there is a good mix of ethnic shops in that part of Parnell St. I'd go and walk the stretch between Gardiner St. and O'Connell St., if there are no or very few vacant units then the rent on that shop will probably be reasonably firm and it might be a good investment based on the current yield.


  • #4
    RATM
    Closed Accounts Posts: 3,591 ✭✭✭RATM


    My impression of businesses in Parnell St is that they can be rather transient.

    Perhaps better yields in the residental market. For example there's a 2 bed apartment in Waterford City center asking for €40k at the moment. Market rents for 2 beds there are circa €500-€600 per month. Lets allow a rent of €500 x 11 months= €5,500. That's a gross yield of about 13%, provided you can rent it of course- there are a good few vacant apartments there. But Waterford is a big town with its own local economy and a large student population so a much better place to buy than Donegal / Leitrim, etc. At the right price it will rent so even dropping it to €450 per month would still get you a pretty decent gross yield. That said you'd need 5 of these properties for your €200k which means a good deal more work than one tenant alone. There'll be more of these opportunities in the coming months & years, locations and renting prospects are key to taking advantage of cheap prices that offer good yields.


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