Fast-food chain McDonald’s is to pay a rent of about €300,000 for a new restaurant to open shortly in Dublin’s Temple Bar. The multiple has begun fitting out the former Frankie’s steak house and bar at Temple Bar Square which is owned by the restaurant group, Fitzers Holdings Ltd.
Agreement on the new rent comes only weeks before McDonald’s expects to secure a substantial reduction on the €1.15 million rent it is paying for its Grafton Street branch. The outcome will be closely watched by other traders on the street also hoping to have their rents reduced.
The controversial decision by An Bord Pleanála overruling objections by Dublin City Council, Temple Bar Cultural Trust and An Taisce took the property market by surprise because of the number of fast- food outlets already operating in Temple Bar. An Taisce has contended that the decision will reinforce negative perceptions of Temple Bar as a “drinking/fast-food quarter”.
One of the conditions of the planning permission is that the restaurant cannot trade between midnight and 7.30am, unlike the McDonald’s branch on Grafton Street which is free to open 24 hours a day.
The Temple Bar permission was granted for an initial period of three years in order to allow a reassessment of the development on the “character and dignity of the area”.
McDonald’s plans to use the entire 228sq m (2,454sq ft) on the ground floor as a restaurant and takeaway and a further 198 sq m (2,131 sq ft) at first-floor level as restaurant space. Both the basement and the top floor will be used for ancillary services. The two upper floors of the 1880s period building have been in residential use up to now.
Simon Cooper of Savills handled the lease and rent negotiations for Fitzers Holdings while Jack Devlin of O Buachalla advised McDonald’s.
Scarcity value
McDonald’s has been looking for a 50 per cent reduction on its Grafton Street rent following the ending of its 35-year lease on the former Hospitals Trust headquarters. It is entitled to a new lease at open market value.
However, the owners of the 1,858sq m (20,000sq ft) building, Royal London mutual life and pension fund, were expected to seek premiums of at least 30 per cent on the rent to take account of the scarcity value of having a round-the-clock food business on the city’s premier high street. Both sides expect to reach agreement in the coming weeks.
Natalie Brennan of CBRE is acting for Royal London.
