£30m deal for Down retail property 'could be first of many'
THE sale of a major Co Down retail park in a deal worth more than £30m could be followed by further property acquisitions, according to its new owners.
Damolly Retail Park has been sold to Newry fit-out firm MJM Group, which is headed by founder Brian McConville.
And Greg Vaughan, head of property at MJM, said the retail park will bring in rent of more £2.4m each year.
"It's not the first commercial property asset (we have bought). The group has a history of investing in commercial property," he said.
"We feel and Brian feels now is a good time to be investing in the local commercial property market."
And speaking about further expansion plans, Mr Vaughan said: "It works well as it is. In the next two to five years we will look to carry out further investments, and any further opportunities that are presented to ourselves. It's a solid income stream."
He said the average length of current leases among the existing tenants is around seven years.
The Damolly sale was handled by CBRE on behalf of LondonMetric for a sum in excess of £30m with law firm Tughans acting as legal advisers.
Developed in 1999, the park provides over 165,000 sq ft of modern purpose-built retail accommodation which accounts for around 75% of the total retail warehouse floor space in Newry.
The site, which is fully let, includes a range of business tenants such as B&Q, Lidl, Curry's PC World and McDonald's.
MJM Group has also purchased a number of other commercial property assets in the last few years.
That includes the former Shackleton Army base in Ballykelly, as well as properties in Belfast city centre and residential land.
Mr Vaughan said the company has "faith in the Northern Ireland commercial property market".
"There is an opportunity to buy at the moment," he said.
But he said the company was "not particularly" worried about the effect of Brexit on the business. "When we saw the tenants' audits, and saw how they were trading, there's a strong tenant line-up and a solid income stream," he said.
Despite the downturn in the property market, he said Damolly has "stood up really well".
"We know what we can borrow at, and what we can put in ourselves," he said.
Robert Ditty, director at CBRE, said: "Damolly Retail Park is considered one of the best performing out-of-town retail parks in Northern Ireland. Since the Brexit vote and the subsequent fall of the sterling, the number of cross-border shoppers has risen dramatically, making Damolly a particularly strong trading investment."
Kenton Hilman, head of corporate and property at Ulster Bank which financed the deal, said: "MJM is a longstanding client and we are very pleased to support them in this acquisition, which is one of the largest in the Northern Ireland market this year and signifies continued investor confidence in the local commercial property sector."
The latest major retail park sale here comes as fellow Newry shopping centre, The Quays, has started work on a £20m expansion.
It says the growth will create up to 500 new jobs as it benefits from a post-Brexit increase in cross-border retail.