8 October 2019
By Elaine Murphy
Well known bookmakers Paddy Power are in the process of selling off their 14 retail shops across the country, including in Cork. Auctioneers Savills have been given the responsibility to showcase the portfolio in the market, with a guided price point of €6.3 million or above.
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Sale and leaseback is part of a trend to move online
The parent company of Paddy Power, Flutter Entertainment PLC is planning to take a new lease on each one of these 14 properties. Every lease will be for 15 years, with rent reviews every 5 years. In addition, every lease will come with a tenant-only break option, once 10 years of the term are through.
The portfolio is expected to be a pretty attractive one for entities interested in investing into a spread of lucrative properties, 8 of them being in Dublin, including Cardiffsbridge Road, Parnell Street, Finglas Village, Clondalkin, Ballymun, Artane, Crumlin and Upper Baggot Street. The other properties are situated in Tralee, Thurles, Maynooth and Drogheda. The portfolio also comprises of Paddy Power betting shop based out of Cornmarket Street in Cork City Centre.
With the growing popularity of online casinos in Ireland, Paddy Power has also been gradually moving a lot of its business to Internet in the past few years. The company’s CEO had spoken openly about this decision earlier this year.
Speaking to the media earlier this year, the company’s CEO Peter Jackson had emphasised that going forward they will be focusing their energies only on the online business in Ireland. He clearly mentioned that Paddy Power will not be undertaking any sort of massive expansion steps in terms of their retail footprint. He had said, “I think we get much better returns from growing our online business, which is where you have seen the focus of growth for the past few years.”
As per Savill’s, the auctioneers, the Paddy Power portfolio is such that it will offer investors the ideal opportunity to acquire a select and unique group of Paddy Power properties that have been self-occupied by them for a very long time. These properties are situated in Cork, Dublin and in several leading provincial towns, offering an initial combined net rent in the vicinity of € 480,000 per year.
Flutter Entertainment PLC had posted group revenues to the tune of £ 1.873 billion in 2018, and employs more than 7500 people worldwide. Their year-on-year revenue rose by an impressive 17% during the first quarter of this year.
A spokesman for the company told the press that they are selling their entire portfolio for a leaseback deal that will help them get rid of their remaining freeholds in their Irish estate. They clarified that this step has nothing to do with the Gambling Tax Bill and will not impact their trading hours, staff or customers in any way.