The increase in rents at the Jervis centre will be in line with rental trends on Dublin's high streets where intense competition for large stores continues to drive up rents, writes Jack Fagan
The 45 traders in the Jervis shopping centre off Mary Street in Dublin 1 are facing rent increases of between 50 and 100 per cent when its second five-year review gets under way in the coming weeks.
The increases will be largely in line with rental trends on Dublin's high streets where intense competition for large stores continues to drive up rents.
David Potter of Savills Hamilton Osborne King, who is advising the owners of the Jervis centre, says it is one of the few shopping centres in the city with a range of large trading units of 371.6-464.5sq m (4,000-5,000sq ft). "This is a much sought-after size category in the Henry Street/Mary Street area and is not available in the Ilac centre."
Even before the reviews take place, the centre is producing a rent roll of over €15 million from the 30,657sq m (330,000sq ft) of retail space. Rent increases to be sought will range from 75-100 per cent on the ground floor and around 50 per cent on the upper floor. Zone A rents on the ground floor are around €3,500 per sq m (€325 per sq ft) while those on the first floor average about €2,000 per sq m (€186 per sq ft).
Potter has opened discussions with a number of tenants but has not, so far, reached agreement with any of them. Some of the reviews will inevitably go to arbitration. The rent reviews are complicated because almost every shop in the centre has a different size and configuration, and many of them are located on the first floor where Zone A rents range from €2,000 to €3,000 per sq m (€186 to €279 per sq ft).
The main anchor tenant, Debenhams, pays a rent of €2.25 million for a 10,219sq m (110,000sq ft) store on four levels. Another anchor, Tesco, has a rent of €635,000 for a basement supermarket of 3,251sq m (35,000sq ft).
Other major tenants include Next, which pays €644,000 for 577.7sq m (6,219sq ft) at ground and basement level, and Lifestyle whose rent is €440,000 for a unit of 557.4sq m (6,000sq ft).
Dixons, which has a well located store on the ground floor, has apparently refused an offer of several million euro from the owners of the centre to surrender the lease of its premises which extends to 848.7sq m (9,136sq ft), including storage. Had the UK multiple bowed out, its space would have been allocated to several high-end women's fashion chains.
However, the owners have managed to find space on the first floor for Bershka and Stradivarius, two sister companies of Zara. Dixons only managed to get into the Jervis centre after paying €500,000 key money to Fosters menswear for the unit.
One UK giant that will not be troubled by the upcoming rent review will be Marks & Spencer, which was in the area long before the Jervis centre, but which wisely decided to open into the complex, essentially becoming one of the anchors without having to pay the rent.
The Jervis centre is one of the great success stories of Ireland's property boom. The three-acre former hospital site was bought for a steal at £5.97 million in 1994 by Paddy McKillen and Padraig Drayne. The 102,193sq m (1.1 million sq ft) development was built at a cost of £76 million and opened at a time when many UK multiples were looking for a foothold in Dublin.
The developers agreed a sale and leaseback on the integrated 750-space car-park. The runaway success of the Jervis centre has allowed the two promoters to greatly enlarge their property portfolios.
