The commercial market throughout Galway city and the west of Ireland has proven to be resilient throughout 2023. In the first quarter of the year, the commercial market stabilised after an unprecedented 2022 which saw some major challenges as a result of the ongoing conflict in Ukraine. What began as a steady start in 2023 turned out to be one of the most active within the commercial section of O’Donnellan & Joyce in recent years, regardless of rising interest rates and market uncertainty.
Shane McDonagh, who leads the commercial department within O’Donnellan & Joyce, commented: “We have witnessed a record year within the commercial sector with various sales and lettings throughout the city and across the Connacht region.” The most notable trend was that there were multiple bidders on a majority of assets.
This was evident with the sale of the one of the most prominent buildings within Galway city, The Galway Arms Inn. A 10-bedoom guesthouse and licenced premises, the property attracted strong interest from local and national investors which was sold by online auction. With an attractive reserve price of €1,000,000, the property attracted 14 registered bidders who varied from investors to local publicans. After a vigorous and transparent online bidding process, the property sold in excess of €2,000,000. As well as achieving a significant sales price, the property was sold within five weeks of being launched onto the market.
Hospitality was certainly at the forefront of the commercial sales within Galway city in the past 12 months. A variety of iconic landmark buildings were offered to the market, and O’Donnellan & Joyce was acting sole agent on each. No better address than No 1 Eyre Square, which comprised Richardson’s Bar and was offered for sale as a result of the owner's retirement. The building is a prominent public bar and regarded as one of the most recognisable buildings overlooking Eyre Square. Similar to other sales, the property attracted both local and national interest. The sale concluded within Q3 of this year in the region of €2,500,000 and is due to reopen in early 2024 under it’s new ownership.
Other city centre sales of significance were Cookes Bar & Restaurant at 28 Abbeygate Street, and Blake's Castle on Quay Street, both of which were offered with vacant possession and located in prominent positions within the city. Cookes Bar was acquired by a local investor who intends to regenerate and remodel the building while retaining most of its original character and charm. The building is rumoured to be one of Galway city's oldest structures. The property achieved in the region of its asking price of €1,250,000. Blake's Castle is located in the heart of the tourism district of Galway city and previously traded as various hospitality businesses. Being offered with a guide price of €1,250,000, the property attracted multiple bidders and sold more than 30 per cent above its asking price. The property was acquired by an owner occupier and has recommenced trading.
With demand being high within Galway city, assets of the of county also proved resilient and in demand. A prominent filling station at Tuangraney, Scarriff, Co Clare was offered to the market with vacant possession by way of public auction. With an attractive guide price of €600,000, several bidders registered for the auction with an owner occupier acquiring same for €830,000.
Other notable transactions included the sale of The Orchard Creche in Corofin, Co Galway. This impressive building was formerly a monastery and is steeped in history. The owners invested many years of hard work and funding to create a magical creche environment which caters for a huge portion of the local population of pre-school children. The property was offered to the market along with the well established business, on a three acre site, and sold for in the region of its asking price of €1.2 million to a local family with extensive experience in the industry. This creche sale marks the third successful 'going concern' transaction that Aaron O’Reilly of O’Donnellan & Joyce has managed over the past 24 months with previous noteworthy sales including Stapleton’s Childcare Centre in Loughrea and sister premises in Craughwell, Co Galway.
B&Bs and larger homes have proven to be attractive investments for those in the hospitality sector due to a rise in domestic travel and the shortage of available residential properties. With a rise in domestic tourism and a resulting increase in hotel prices, B&Bs have become a popular alternative for those seeking more affordable accommodation. In addition, the demand for emergency accommodation has also driven pent-up demand for larger residential units.
One such property that came to the market in 2023 was Brook Lodge B&B on Newcastle Road. Ideally positioned just off the Quincentenary Bridge and adjacent to both Univeristy of Galway and UHG, this property attracted enormous attention and resulted in a sale price well in excess of the €1.25 million guide. With multiple national and international bidders, the activity on this sale is a clear example of the level of funds that are available in the market for properties of this nature.
In addition to creche and B&B sales, Aaron O'Reilly has also managed the sale and letting of a number of other commercial premises around Galway city and county. Industrial units in the Liosbaun and Ballybane industrial estates have proven to be in demand in recent years with high occupancy rates and low stock driving strong investor interest. Recent sales include a unit in Kilkerrin Park, Royal Rock Business Park and Liosbaun Industrial Estate. In addition, lettings of a number of prominent units in the suburbs include the former Seacrest Surgery in Knocknacarra, and office units within the city centre. “Good quality stock is hard to come by these days as workers return to offices and logistics businesses seek additional storage and processing units," he said. "Brexit, Covid and indeed the ongoing conflict in Ukraine have all contributed to a shift in the way business is being conducted and we have seen a number of big brands open operations in Galway as a result. We have a long list of qualified buyers and tenants seeking suitable properties in order to advance their businesses in 2024.”
With rising interest rates and a lack of tradesmen, 2023 was always going to be challenging for development land. O’Donnellan & Joyce were delighted to conclude a sale for a significant city landbank at Coolough Road, Menlo which comprised 5.38 acres entirely zoned for residential development. The team also handled the sale of a prime landbank of 1.55 acres on the Cappagh Road, Knocknacarra which is earmarked for residential development.
As well of sales, O’Donnellan & Joyce handled a variety of significant lettings within Galway city and the western region. Two lettings of note were 27 Willaim Street, a self-contained retail unit in the heart of the retail thoroughfare of Galway city, and a purpose-built drive-through unit in Nenagh, Co Tipperary. The property at William Street was let to Krispy Kreme which have proven to be a welcome addition to the high street and was let in an off-market transaction. The drive-through unit was let to McDonald's which took up the lease in September 2023 and commenced trading in November 2023. Shane McDonagh commented on the importance of personal relationships within the industry: “The letting of both 27 William Street and the drive-through unit in Nenagh were conducted in an off-market transaction as a result of built-up relationships with agents in the industry. With technology and AI taking a hold of certain industries, personal connections are pivotal within the industry.”
The transactions outlined above show the diverse range of sales and lettings that were successfully handled by O’Donnellan & Joyce within a 12-month period. From high street investment properties and portfolio sales, to educational and childcare facilities along with various development lands, the company boasts the knowledge and expertise across all sectors.
Its advisory services have also expanded throughout 2023 as a whole. Having the benefit of being based on the ground within Galway city along with having in-depth knowledge of the entire west of Ireland, O’Donnellan & Joyce have acted as valuers and negotiators for national firms and State bodies from Limerick to Sligo.
Having being engaged to carry out several rent reviews and lease negotiations from the beginning of last year, there appears to be strong appetite from retailers and SMEs to remain active and present within the city centre and surrounding suburbs.
Last year exceeded all expectations within the commercial sector and has proven that even in a time of uncertainty, demand for well-located commercial properties will outweigh supply. With a number of prime instructions awaiting to be launched to the market, 2024 has all the makings of a similar year.
