A DEVELOPMENT SITE for the proposed Opera shopping centre in Limerick city centre, sold at the peak of the property boom for €110 million, is back on the market at a mere €12.5 million. The collapse in value underlines how much even prime retail sites have fallen in cities as well as towns. It also reflects the difficulties in securing funding for large-scale shopping facilities.
The 2005 sale of the rundown, vacant buildings off Patrick Street in Limerick is frequently cited among the great excesses of the property boom along with the €417 million purchase of the Irish Glass Bottle site in Ringsend and the €315 million acquisition of the Millennium Park in Naas.
Estate agents Savills are to launch a marketing campaign today to find a buyer for the 3.2-acre site which has planning permission for a multi-storey shopping centre with 38,541sq m (414,855 sq ft) of retail space and an underground car park. The sale has been called by developers Gerry O’Reilly, Terry Sweeney and David Courtney of Regeneration Developments, whose loans have been transferred to Nama.
The move to sell the site for the proposed €300 million Opera Centre comes only weeks after the Danish bank NIB reached agreement with an Indian-born developer, Suneil Sharama, for him to take control of a partially built shopping centre along the Dublin Road on the outskirts of Limerick city. Liam Carroll’s Zoe Group abandoned the 15-acre site for the Parkway Valley shopping centre about four years ago when its business collapsed. Local planners are now expected to allow an extension of time on the planning permission for the 39,650sq m (426,792sq ft) retail complex.
Coincidentally, the new promoter for that scheme, Mr Sharma, who is based in the North, is more familiar with the site for the Opera centre than anyone else – having quietly assembled the inner-city quarter along with another investor, Sam Morrison, over a number of years before selling it for an astronomical price to Regeneration Developments.
Limerick city planners granted planning approval for the Opera Centre in the hope that it might help to shift the balance back in favour of the city, which has been in serious decline for many years following the indiscriminate development of more than half a dozen shopping centres in the county-council areas adjoining the city boundary.
Footfall in the city centre has dropped dramatically in recent years as big-name overseas traders opted for out-of-town locations, leaving only three high-profile stores (Penney’s, Brown Thomas and Debenhams) with a broad appeal to city shoppers.
Many of the city’s once-thriving retail streets, including Patrick Street, William Street and the modern Cruises Street, have lost both traders and shoppers. Limerick is the only city in Ireland where rents in out-of-town shopping centres are almost twice as high as those in the city.
Much of the decline in city-centre trading is due to the way the county planners allowed the Crescent shopping centre to grow like Topsy. That trend was finally scuppered last year when An Bord Pleanála overruled the county planners and refused the Dublin-based owners (the Kenny family) permission for yet another major store with a floor area of 9,754 sq m (105,000 sq ft) for Marks Spencer.
The new Government’s recent decision to amalgamate the two local authorities is set to change future planning in the city and county. With Marks Spencer still to decide where to open its first Limerick store, Parkway Valley and whoever acquires the Opera site will both be pitching for the UK multiple as an anchor.
One developer who may take another look at the Opera site is Michael Tiernan, whose Arthur’s Quay shopping centre on the opposite side of Patrick Street has become quite dated. However, if linked up with the proposed new shopping complex it has the potential to turn around the city’s fortunes.