New Zone A rent levels emerging in the centre of €3 ,229 per sq m (€300 per sq ft) will still be only about half the going rate on Henry Street, writes Jack Fagan
The rent roll from Dublin's Ilac shopping centre is set to rise this year from €8 million to €15 million, as tenants face a rent increase of 40 per cent and many outlets are remodelled and enlarged as part of a major refurbishment programme.
The new Zone A rent levels emerging in the centre of €3,229 per sq m (€300 per sq ft) will still be only about half the going rate on Henry Street.
Ten of the 50 traders have already settled for 40 per cent rent increases backdated to last November and others will be coming under pressure in the coming weeks to either agree the new terms or to refer the issue to arbitration.
Owners Joe O'Reilly, who bought British Land's 50 per cent stake last year for €121.5 million, and Irish Life have already spent €50 million of the €60 million set aside for the first comprehensive upgrade of the centre since it opened in 1981.
The final stage - involving the refurbishment of the Moore Mall - will not begin until later this summer when Dunnes Stores vacates its 3,716sq m (40,000sq ft) outlet and opens its new city flagship store on the Henry Street side of the Ilac. The relocation will allow the management to make a number of large shops available mainly to multiples who have been looking for suitable space in the Henry Street area for some time.
O'Reilly and Irish Life have bought in 10 leases to allow adjoining units to be enlarged and, according to Frank Martin, head of asset management for Joe O'Reilly's Chartered Land, they will be acquiring more where it makes economic sense.
Most leases have changed hands at around €50,000. The Ilac has traditionally had more small independent Irish traders than any Dublin shopping centre. Inevitably, some of them will not be able to afford the new rent levels, leaving the way open for the management to amalgamate units. A typical sized shop of 92.9 sq m (1,000 sq ft) will have a revised rent of around €200,000 per annum. A new tenant, Meteor, is already paying that level of rent for a shop of 51sq m (550sq ft).
Even with the refurbishment work still going on, the Ilac has already been given a shot in the arm with the arrival of the big hitter Swedish fashion chain H&M. It is trading strongly from 13,935sq m (15,000sq ft) on three levels along the Henry Street entrance to the centre. Its rent, for one of the best positions on Henry Street, comes to €1.5 million per annum.
Meanwhile, the takeover of the long standing middle market operator Roches Stores by Debenhams and its opening into the Ilac will strengthen not only the UK giant but also the Ilac. The more entrances the Ilac gets, the more business it brings in. When the new Dunnes Stores opens, it will have six.
