Rents set to rise on Henry Street

A new benchmark rent has been set on Dublin's Mary Street that is expected to trigger a fresh round of increases on both Mary Street and the adjoining Henry Street.

Irish Life, which owns six buildings on both streets, as well as a 50 per cent stake in the Ilac Centre, has engineered a 43 per cent rent increase by buying in the lease of the Sasha store for €750,000 and agreeing to relet it at a substantially higher rent.

Landlords frequently use this tactic to establish a rental precedent.

Sasha had been paying a rent of €300,000 for the premises but once the new tenant, Best Menswear, moves in, it will double to about €600,000.

This will equate to a zone A rent of €7,696 a sq m (€715 a sq ft), a long way ahead of the going rate of €5,382 a sq m (€500 a sq ft).

Even the new rent level now set to apply on both Mary Street and Henry Street is still well below the norm on Grafton Street, where fashion retailer Karen Millen set a new trend by paying a rent of more than €1 million - the equivalent of a zone A rate of €10,000 a sq m (€929 a sq ft).

Lisa McGrane of Jones Lang LaSalle, who is advising Irish Life on the Sasha lease assignment, said yesterday that it was "premature to comment on any possible deal".

Meanwhile, Sasha has now reversed an earlier decision to close four of its other best-located stores because of soaring rents and stiff market competition from such international heavyweights as Zara, H&M and New Look.

It originally planned to offload its premises in St Stephen's Green, Blanchardstown, Liffey Valley and Mahon Point and replace them with smaller outlets in less expensive locations.

In 2004, Sasha was bought for more than €10 million by the Cork-based fashion accessories chain Dynasty.

Both businesses were to operate separately.

Since then the owner of Dynasty, Cyril Walsh, has received several unsolicited offers for the company, which is thought to be valued at about €2 million.