Dunnes facing debt action by Nama-backed shopping centre

Dunnes Stores has become embroiled in a rent dispute with a Nama-backed shopping centre developer in Drogheda.

Rockmill, which owns the Southgate shopping centre on the outskirts of the town, has hired top Dublin law firm Mason Hayes & Curran to represent it in the dispute, in which it alleges that Dunnes has withheld cash it claims it is owed.

Rockmill's investors include well-known developer Phil Reilly, who runs Shannon Homes Drogheda, which was among the most prominent housebuilders in Dublin during the last boom.

The property company is a client of Nama, with whom Dunnes has had several disputes in recent years.

Nama was unavailable for comment on the dispute with Dunnes, while the retailer did not respond to a request for comment. Mr Reilly had not responded prior to publication to an emailed request for comment.

A glut of retail and commercial developments were constructed in Drogheda during the boom, including Southgate and also Scotch Hall, leading to fierce competition among landlords to sign up tenants. Dunnes signed up as the anchor tenant for the Rockmill shopping centre, which was built just as the crash gained momentum in 2008.

The centre includes 20 retail units, as well as bar , restaurant and other leisure outlets. More than 60 apartments were built on top of the centre.

As well as Dunnes, its other main tenants include Coca- Cola, which has 280 staff working in financial services for its European operations.

Vacant space

According to a recent submission to Louth County Council by a planning consultancy on behalf of Rockmill, it has 2,500sq m of vacant retailing space, and 1,200sq m of vacant office space.

Despite the vacancies, the developers are still planning to push ahead with another development on an adjacent 3.5-acre site, which is also in Nama.

The consultant said it would likely include a hotel and residential development.

Dunnes and Nama recently squared off in a High Court case over disputed allegations that the retailer was employing blocking tactics over the proposed redevelopment of the Square shopping centre in Tallaght.