RetailSector: After paying in the region of €7 million for the last three shop leases at the Grafton Arcade, the way is now clear for Marks & Spencer to develop a separate store on the site with considerable frontage on to Grafton Street. Jack Fagan reports.
Dublin's Grafton Street looks like getting another major store with the decision by Marks & Spencer to redevelop the extensive Grafton Arcade. It has just acquired complete control of the arcade with the purchase of the leases of three premises occupied by Golden Discs.
Although precise details of the deal with Golden Discs have not been disclosed, it is understood that Marks & Spencer may have paid in the region of €7 million to acquire the three leases which had a considerable number of years to run.
Two of the shops are on either side of the entrance to the arcade while a third, which brings its overall space up to about 139.3sq m (1,500sq ft), is located at basement level. M & S is believed to have been advised by Aidan O'Hogan of Hamilton Osborne King.
The deal clears the way for Marks & Spencer to develop a separate store with considerable frontage on to Grafton Street and the possibly up to 1,858sq m (20,000sq ft) of retail space on three levels.
However, the multiple might well decide to either incorporate the extra space into its already large store or to sell on the vacant premises which, when redeveloped, would have a value of about €75 million.
The other option would be for M & S to let the brand new premises at a rent of about €2.5 million a year.
Several of the big international fashion multiples - including H & M, Zara and the Arcadia Group - would be obvious candidates, as well as Boots which is heavily restricted next door because of the limited retail space available to them.
Over two years ago Boots offered a rent of €2.1 million for what is now the River Island store on the opposite side of Grafton Street. There are relatively few shops on the street with large floor plates.
M & S bought the Grafton Arcade from Guardian Royal Exchange in the early 1990s for about £20 million (€25.4 million).
It then had about 15 small shop units but, as the arcade gradually went out of fashion (like two others on the street), M & S started buying in the leases.
With that task now complete, the company is shortly expected to outline its future plans for the arcade.
