THE SQUARE DEAL
REDMOND SQUARE SHOPPING CENTRE IS ON THE MARKET, OPEN TO OFFERS OVER €2.25M. MARIA PEPPER EXAMINES THE INVESTMENT OPPORTUNITY AND OUTLINES HOW THE LANDMARK WEXFORD DEVELOPMENT ENDED UP IN RECEIVERSHIP
REDMOND Square Shopping Centre in Wexford is entering a new chapter in its 25-year history after being placed on the market by a receiver for a guiding price in excess of €2.25 million.
The complex of 14 retail units, a first floor restaurant, the old Savoy Cineplex cinema and 269 adjoining car parking spaces is being sold by private treaty on behalf of the receiver Grant Thornton by auctioneers Cushman & Wakefield, the commercial partner of Sherry Fitzgerald.
Until it was advertised last week, many people didn’t even know the shopping centre had been placed in receivership in June 2015 as it was business as usual for all the tenants of the retail units including the National Driver Licence Centre, Brian Hall O’ Mahoney Dental Practice, Dragon Heen restaurant, Hidden Hearing, Sports Factory Outlet, Gillian Hayes Property Letting, Nolan’s Stoneworks and Kebab Bytes.
Peter Love, a senior surveyor with Cushman Wakefield, said existing tenants will not be affected by the sale and will continue to trade as the centre is being sold as an investment property with the current receivable rent estimated at €213,731 per year.
He said the receiver is seeking offers in excess of €2,250,000 equating to a Net Initial Yield of 9.09% assuming standard purchasers costs of 4.46%.
The total floor area of the extensive property portfolio is 3,338.sq m (35,932 sq ft) along with 269 car parking spaces adjoining the cinema which closed down eight years ago after the Wexford Omniplex was built on the Rosslare Road at Drinagh.
The empty cinema building was never re-developed mainly due to the cost involved in replacing the sloped floors to make the premises suitable for an alternative commercial use.
Redmond Square Shopping Centre including the cinema was developed by the Wexford businessman Tom Donnelly and was opened in 1990 to complete an overall revitalisation upgrade of the area which included the building of a new Dunnes Stores and the opposite block which incorporates McCauley’s pharmacy and medical centre and O’Brien’s Cafe.
The multi-million pound rejuvenation of the entire square was encouraged by a Government tax incentive scheme designed to revitalise derelict urban areas, with businesses offered an annual double rent figure as a tax credit for 10 years along with a rates rebate for a decade.
The revitalisation scheme was introduced by the Government in an attempt to address the ravages of the recession of the early 1980s although trading continued to be poor until after the mid-1990s.
Up to that point, the North end of Wexford town was a derelict wildnerness with M.J. O’ Connor Solicitors (now Greenacres) being effectively the end of the Main Street. After George’s Street, there was a coalyard, a vacant pub and a furniture store and in the square itself (where Dunnes Stores is now) there was the old Meyler’s Garage which had been closed for many years.
The Redmond Square development ushered in a new era for the North End although it took some time for the new businesses to establish themselves.
Tom Donnelly had developed the Savoy Cineplex for Ward Anderson and the new cinema eventually became a victim of its own success with customer demand creating the need for a bigger premises.
The cinema owners turned to Mr. Donnelly again to provide them with a larger, state-of-theart cinema on the outskirts of town and in order to facilitate this, he engaged in a land purchase transaction which was eventually to lead to Redmond Square Shopping Centre going into receivership.
He bought Birchgrove House, a large residence in Drinagh formerly owned by George Stafford, as the location for the new 9-screen cinema development, secured pre-planning agreement and signed a contract with Ward Anderson to build a cinema on the site.
During the subsequent design and planning stage, he received a letter from Wexford County Council informing him that a protected structure order had been placed on Birchgrove House and there could be no interference with the property.
Mr. Donnelly’s company was left with an expensive site it couldn’t use and a legal contract to build a cinema. It purchased an adjoining site where the Omniplex which opened in 2008 now stands, using the income from Redmond Square as security.
Then the banking crisis came in the mid-2000’s signalling a major recession which affected the shopping centre’s businesses. Meanwhile, the development of other large car parks in Wexford town had reduced income from Mr. Donnelly’s car park.
Rabobank which bought ACC bank where the company’s borrowings lay, began the process of closing down accounts and pulling out of Ireland. It appoined a receiver to the Redmond Square shopping centre in mid-June 2015.
The receiver Grant Thornton placed the shopping centre on the market on September 21 through the offices of Cushman Wakefield and Fenelon Properties in Bray, County Wicklow.