Mac Donagh Station Shopping Centre

trishw78 wrote: »

fingers crossed HMV take over Zavvi... HMV Took over the Zavvi in Dundrum

The rental downturn means some tenants are not paying rent and, in one case in Kilkenny, the landlord is now owed more than €600,000.

The Sunday Tribune has obtained documents showing the rent arrears at MacDonagh Junction, a shopping centre in Kilkenny which opened in November 2007.

"Tenant arrears are a significant issue for all retail centres at the moment, including MacDonagh Junction," according to documents recently circulated by stockbroking firm Davy, whose private clients invested in the centre.

The total quarterly rent from the centre is €1.17m, including the Zavvi unit which surrendered its lease after going into liquidation. Davy's investors' share of the quarterly rent is 45.5%. The documents, seen by this newspaper, show that tenant rent arrears of more than 90 days stood at €284,000 in April, suggesting total rent arrears of more than €620,000. Five tenants account for more than 50% of the arrears, the documents state.

Davy Private bought its share in the centre for nearly €69m including costs, and funded it using nearly €46m of bank debt and more than €23.1m of equity. The debt was provided by AIB with €40m fixed for 12.5 years at an all-in rate of 5.37%, €3.5m fixed for seven years at 6.24% and €2.3m on a three-month Euribor.

Rent on the unlet units when the centre opened was underwritten by MacDonagh Junction Developments Limited (MJDL), which developed the centre, for two years as part of the deal. When the centre was bought, just under three-quarters of the units by area were let. That figure now stands at 80%, according to the documents.

Three tenants at the shopping centre had entered examinership or administration or went into liquidation "and a number of other tenants are experiencing difficulty".

They have drawn up a plan to recover the arrears, secure existing tenants and let vacant space, including the units where tenants may not survive.

"The objective of the plan is to get the centre fully let, even if this means taking a temporary hit on rent," it states, adding that "tenants are being allowed pay rent quarterly on condition they're made on time".

Davy told the investors that they expect to recover all of the arrears and also stated that Penneys is in advanced discussions to take the unit at the back of the centre, which would form its second phase.

Davy also pointed out that MJDL continues to have obligations to the Davy investors. These include that Davy's investors have the option to "put any unlet units back on MJDL if unlet after two years for price they paid for them". In addition, if the vacant units are let at a "rent lower than what was capped up at, the purchase price is recalculated based on reduced rent and MJDL refunds the difference to investors". Finally, "MJDL is responsible for letting costs associated with the unlet units such as fit out costs and tenant incentives".

The MacDonagh Junction case is by no means unique but is illustrative of the state of the market. Some shopping centres are seriously struggling, including one in the south-east where the anchor tenant is reputedly not even making its bread and milk quotas, a sign that footfall is nowhere near expectations.

hithere10 wrote: »

Why is there still no topmen/topshop up there that's what it needs badly

KatCookie wrote: »

I think that the article doesnt clearly state that they are actually creating a new Carrig Donn shop in MacDonagh, it seems to me that Carrig Donn might just be expanding their shop on High Street and it just got added to that article...