Up to last year leases on Grafton Street were attracting premiums of up to €1.4m – now one trader is offering to pay someone over €300,000 to take on its lease, writes JACK FAGAN.
IN ANOTHER sign of declining fortunes on Dublin’s Grafton Street, international fashion giant Warehouse is to hand back the lease of its store on the street after failing to sell it to other traders.
Owner Aviva, which recently took over Hibernian, is now expected to remodel and refurbish the building before putting it back on the market.
Agent Colliers Jackson-Stops originally sought a premium of €400,000 for the shop at number 37 but, despite a six-month marketing campaign, there were no takers.
With the 15-year lease due to run out next month, Warehouse has now elected to surrender it to the landlord.
The sharp slippage in consumer spending is being blamed for the fall off in premiums, even in the city’s most important high street.
The change of fortune on Grafton Street has been as swift and painful as the recession itself. Up to last year, shops on the street were attracting key money of up to €1.4 million (paid by Karen Millen) and only last October Aldo, a Canadian shoe and accessories retailer, agreed a premium of €650,000 for the lease of the former Nine West shop at 83 Grafton Street.
Aldo will be paying an annual rent of €636,000, a 77 per cent increase on the previous rate of €359,500.
Warehouse has been paying a rent of €368,000 for its much smaller store which has a retail area of only 102sq m (1,100sq ft). Last November, the trader moved around the corner to a new purpose-built retail building on South King Street where it is renting 371sq m (4,000sq ft) at a cost of €600,000. Zara and HM are in the same building.
Mervyn Ellis of commercial agent HWBC said Aviva planned to double the volume of retail space in the former Warehouse building by opening up the first floor to shoppers in line with the special planning guidelines for Grafton Street published by Dublin City Council. The work is expected to take about six months to complete.
Of the seven other leases available or for sale on Grafton Street, only one trader is offering a reverse premium to offload its premises.
Nick Crawford of Douglas Newman Good Commercial is attempting to find a replacement tenant for shoe retailer Zerup by paying €300,000-plus to a trader prepared to take over the lease. The other Grafton Street leases available are Dunnes Stores, Grafton Crafts, O’Briens Sandwich Bar, Korky’s and ICS.
Though capital values on Grafton Street have fallen by anything up to 50 per cent over the past year, there are no signs yet of a slippage in rents on a street that surprisingly remains the sixth most expensive thoroughfare in the world despite its somewhat tatty image.
A year ago the rent on Bewley’s Oriental Cafe was increased by 93 per cent – from €750,000 to around €1.475 million.
That business will shortly face stiff competition from the London café/restaurant group the Wolseley when it opens a “Viennese-style” eatery close by in the former Habitat store. Wolseley is renowned for its food, service and good value, and the fact that it is to rent in a convenient but cheaper secondary location – rather than a high street – should give it considerable advantages over Bewley’s Oriental Cafe.
Wolseley will be paying around €500,000 for 464.5sq m (5,000sq ft) at the College Green side of the old Habitat building and a further 232sq m (2,500sq ft) for kitchen and storage space in the basement. Larry Brennan of letting agent Savills is handling negotiations for the former Habitat space at the Suffolk Street end. This area of 1,114sq m (12,000sq ft) is expected to rent at €850,000 per annum.
