Joe O'Reilly, the businessman behind Dundrum Town Centre, has been given the go-ahead to build a €100m shopping complex on the site of the former Eircom building on South King Street. Jack Fagan reports

The Grafton Street area of Dublin is to get a much needed boost with the decision to proceed with a large retail complex on the site of the former Eircom Building at 35-45 South King Street.

The €100 million five-storey over basement development is being aimed at a handful of the top international fashion multiples.

Grafton Street has come in for increasing criticism because of its many tatty chain stores and the fact that there is such a heavy concentration of fashion outlets. In recent months the street has seen an unusually high number of traders moving out because of a doubling of rents.

The street is also expected to lose shoppers, at least in the short term, to the newly opened Dundrum Town Centre with its greater variety of traders and exceptionally strong line-up of fashion outlets.

The prospects for broadening the appeal of the Grafton Street area will be greatly helped by the South King Street scheme which, ironically, is to be developed by businessman Joe O'Reilly, the powerhouse behind the development and launch of Dundrum.

He bought the 1980s Eircom building more than three years ago for €32 million with the intention of replacing it with a contemporary glazed mixed-use block.

Dublin City Council planners granted planning permission on two occasions for the retail project in the hope of promoting retailing along the already pedestrianised South King Street, which flanks the St Stephen's Green Shopping Centre. The Planning Appeals Board overruled the first permission for a seven-storey block next to the Gaiety Theatre on the grounds that it would constitute overdevelopment.

A subsequent planning application for a smaller five-storey over basement mixed-use block of 8,055 sq m (86,703 sq ft) also won the support of the city council planners and, though a neighbour again objected, this has now been withdrawn.

This allows Mr O'Reilly to proceed with what promises to be the most interesting retail scheme scheduled for the city centre.

It has been designed by distinguished architect Andrew Wejchert of A+J Wejchert who also handled UCD at Belfield, The Helix at DCU and Smithfield Village and the redesign of the ILAC Centre on Henry Street, Dublin 1.

The new development will include five shop units, two of which will be at ground floor level.

One of them will span the ground and first floor and two will take up ground, first and second floor levels.

A department store complex will span the basement, first and second floors.

A 650 sq m (7,000 sq ft) restaurant on the third floor is already attracting considerable attention. There will also be six apartments on the third and fourth floors.

Neil Bannon of Bannon Commercial is quoting Zone A rents of €4,000 per sq m (€371 per sq ft) - roughly equivalent to those in Dundrum - for the department store, which will have a floor area of 3,000 sq m (32,291 sq ft) and the shop units which will range in size from 500-1,000 sq m (5,381-10,763 sq ft).

Mr O'Reilly has targeted most of the international traders who have begun trading in Dundrum or are planning to open in the second phase this autumn.

Many of these are understood to be interested in having another outlet close to Grafton Street. These almost certainly include Zara, H & M, Esprit and Next.

With Grafton Street under so much pressure from overseas retailers looking for trading opportunities, it was inevitable that attention would turn to South King Street because of its convenience.

The street does not presently attract many shoppers because there are few retail outlets of any consequence on it apart from Richard Alan and the side entrance to the St Stephen's Green Shopping Centre.

This was not always the case. Before the shopping centre was developed there was a row of shops facing on to the street but, in a decision that still baffles many, former city planners allowed Irish Life to demolish the shops and replace them with what is virtually a blank wall.

Around the corner, South William Street is infinitely busier with its mixture of boutiques, restaurants, bars and coffee shops - and a few sex shops to broaden the appeal.