RetailMarket: Grafton Street's ability to hold its own against a resurgent Henry Street has received another boost after Warehouse, one of the UK's leading fashion brands, decided to take the remaining space at South King Street, which is being developed by property magnate Joe O'Reilly.
Warehouse will trade alongside European clothing giants Zara and H&M, completing a formidable tenant line-up that is expected to transform the pedestrianised area off Grafton Street into a major retail destination.
The new shopping complex was recently sold to Anglo Irish Bank for €100 million and the institution is marketing it to its private clients on the basis that rents at the centre will rise towards Grafton Street's record levels.
Due for completion in 2009, the investment has been rolled into Anglo's €255 million "select geared property fund", which also holds a significant stake in Arnotts department store and its €1 billion redevelopment plan for the north inner city.
Although Henry Street's radical makeover is at least five years from becoming a reality, the thoroughfare's larger units have already attracted a number of global brands, bolstering the area's appeal and improving crucial footfall rates. In contrast, Dublin's premier shopping street has suffered from what critics condemn as a "slide into mediocrity".
While much of the disapproval has centred on the proliferation of mobile phone shops, convenience stores and health food outlets on the street, market experts consistently point out that the real issue is the shortage of suitable sites. And they claim that international retailers are deterred by Grafton Street's jumble of small-scale shops. According to Kevin Sweeney of Bannon Commercial, the agent that handled the lettings at South King Street, the scheme's expansive floorplates were the "real selling point" as global brands work to "set store-size formats".
Warehouse will have one of its largest city centre stores in the new development, which is next to the Gaiety Theatre on the former Eircom office block site. Annual rent for the 418sq m (4,500sq ft) unit is in the region of €650,000 for a standard 25-year lease with break options in years 15 and 16.
The brand is part of the vast Mosaic group which controls a string of well known businesses, including Karen Millen, Hobbs, Whistles, and Oasis. Its parent, the Icelandic investment company, Bauger, also owns other famous retailers such as the toy store, Hamleys, as well as the speciality teashop, Whittards of Chelsea.
Warehouse occupies a narrow shop on Grafton Street and, as space on the thoroughfare is at a premium, it is widely believed that Mosaic will retain the property for a sister brand. However, it may be some time before news emerges of the new tenant given that Warehouse's relocation is more than a year away.
Although South King Street was pedestrianised seven years ago, the area has failed to establish itself as a retail centre and industry experts are hoping the arrival of fashion giants Zara and H&M will enliven the street and encourage further development along it. There are even hopes that St Stephen's Green shopping centre, long regarded as an under-utilised space, will be overhauled in response to the competition from O'Reilly's scheme. One source claims the centre's inward-facing units are partly to blame for the "lacklustre" performance of the area and says the shops should "front directly onto the street". But he acknowledges the centre's unusually large number of tenants mean any "redevelopment would be complex and difficult to implement".
Aiden McDonnell, associate director of Colliers Jackson-Stops, handled negotiations for Warehouse but declined to comment on the deal.
