The £200 sterling "Zone A" rental barrier is in the process of being breached twice in two deals involving fashion chain Next in Belfast's prime retail street, Donegall Place. The retail rentals being achieved in the city's premier shopping streets are comparing relatively well with Dublin's Grafton Street, which is recording Zone A rentals of just over IR£200 and surpasses Henry Street, which is around the £180 mark.
The consolidation of the retail market in the North has been underlined by the sale of three shops in prime provincial locations by BL Universal, the joint property venture between British Land and Great Universal Stores, netting £3.3 million sterling.
The sale of the three shops, Clinton Cards and Next in Church Street, Coleraine; and the Next shop at Bow Street, Lisburn, by Colliers Jackson-Stops reflects a yield of 5.5 per cent, seen as a new record for provincial retail property in the North.
An investor based in the north-west is understood to have bought the properties.
In a survey on the North's retail market, Hamilton Osborne King's Belfast office reports the breaching of the £200 barrier in relation to contracts over a re-gearing and extension of an existing lease at number 20 Donegall Place by Next. Fitting out is nearing completion and the new rental puts the Zone A level at £200 per sq ft.
At 54 Donegall Place, a similar Zone A rate is reported with the proposed surrender of the existing Next lease and re-letting by the landlord, Prudential, to Footlocker. The next lease on this property is anticipated to be effective from January.
According Colin Mathewson, HOK's director in Belfast: "Belfast city centre still remains the dominant retail location in the North and 1999 has seen a number of important transactions with the £200 sterling Zone A barrier finally achieved. As in previous years, most transactions are on lease assignment basis, with limited new lettings taking place.
"In general terms, the retail market in Northern Ireland during 1999 has been noticeably subdued compared to recent years, with premium levels falling back and rental levels growing at a steady rate. The market continues to be strongest in the greater Belfast area, where a number of key transactions have taken place during the course of this year."
Prior to the two £200 Zone A deals, the biggest rental achieved in the city centre was £175 with a premium of £80,000 paid at the start of the year by Baby Gap for Unit 10 in the Castle Court Shopping Centre in Royal Avenue.
Fashion group Oasis paid a premium of £135,000 and a Zone A level of £170 for a lease from the Halifax Building Society, at 25-27 Donegall Place.
Mr Mathewson reports that other lease assignments in Belfast city centre include: the assignment of the former H Samuel premises to Karen Millen at a premium of £150,000; the former Jumper unit to mobile phone company Orange at a premium of £115,000 and the former Clinton Cards unit to Going Places at a premium of £150,000 and the former She unit in Castlecourt to Angel at a premium of £70,000.
The demand for retail space was responsible for the proposals by separate development groups for three major shopping centres in the city centre. The proposed schemes by the MEPC/John Laing/Dunloe Ewart consortium; Dutch developers Multi Development Corporation; and the Deramore Developments/Land Securities group are under consideration by the Department of the Environment and their consultants, Jonas Driver. A decision is expected before the end of the year.
Meanwhile, Woolworth is understood to have paid £225,000 for a 12,500 sq ft unit in Connswater shopping Centre, east Belfast, and is due to start trading within the month. The letting marks Woolworth's re-invigoration and interest in edge-of-town shopping.
Brian Nixon, of The Whelan Partnership, acted for Woolworth and Jonathan Millan, of Colliers Jackson-Stops, acted on behalf of the landlords, British Land Securities.
