The recent premium of £186,000 paid for a retail premises on South Anne Street, Dublin 2, underlines the increasing drawing power of the secondary streets around the central shopping artery of Grafton Street. UK men's fashion chain Envy paid the key money for the former Acquiesce store at 31 South Anne Street, which has 1,600 square feet of space on the ground floor and an equally large area at basement level. The current rent is £64,000 per annum.
The high premium paid is the latest manifestation of what could be described as the "Grafton Street Effect", where large premiums and high rents on Grafton Street, combined with the growth in the retail market, have conspired to make the arteries off Grafton Street increasingly attractive to retailers.
"You could argue that Grafton Street is gravitating towards a very English high street profile," says Aidan McDonnell, the Dublin agent who advised Envy. "For more specialised people and independents, the opportunities are really in hanging on to the coattails of Grafton Street."
There are also financial considerations: the streets off Grafton Street are cheaper for retailers to move into. "Premium levels are such in Grafton Street that many occupiers are effectively being priced out of the market," says Larry Brennan of Hamilton Osborne King. "There is also the fact that you are looking at vastly different levels in Zone A rents."
"You can't get on to Grafton Street," says Ben Pearson of Douglas Newman Good. "The average traders aren't going to be willing to pay £300,000£350,000 to get on to Grafton Street." Rents in Grafton Street are also significantly higher than in side streets. Zone A rents currently run up to £200 per square foot in Grafton Street, compared with up to £60 per square foot in adjoining streets.
"It's kind of a tidal effect," says Mr Brennan. "As the retail market has greatly improved in the last couple of years, the core retail area has expanded out to South Anne Street and Wicklow Street. It's supply and demand." There is a constant demand for outlets in Wicklow Street, which frequently change hands for up to £100,000. According to Ben Pearson, premiums on the street have doubled in the last year.
"Wicklow Street is a good example," says Mr Brennan. "You've had Kookai recently, Past Times is reporting exceptionally good trade and other stores like Morgan are also trading very well. Their turnovers would be nothing compared to what their turnovers would be on Grafton Street but their cost base compared to turnover makes it a very favourable proposition."
Aidan McDonnell believes Wicklow Street is one of the most interesting streets at present. "I think Wicklow Street is a perfect model. What I see now is an improving retail offer there. Each month there's a fresh face or an improving new face. There's a nice mix of women's wear, young people's fashions, older fashion, good independent traders like jewellers, interesting ones like Past Times and Tower Records. It's quite exciting compared to what it was three or four years ago. The changeover from Switzer's to Brown Thomas has also had a positive effect on Grafton Street and its environs, particularly Wicklow Street. "It definitely has been helped by Brown Thomas, which I would regard as an international-class store," says Mr McDonnell. "It can compete with anything in the UK or on the Continent. It's a very fine store. The car-park is bound to improve Wicklow Street and you also have the Trinity Street car-park on the other side."
Mr McDonnell now believes that South Anne Street could enjoy a similar renaissance, particularly if a rumoured development at its Dawson Street junction goes ahead.
The only obstacle for larger retailers is the availability of suitably sized premises. The South Anne Street store acquired by Envy was unusual in that it is located in what is primarily a food-oriented street and it was of sufficient size to attract a UK retailer.
"I often say to UK retailers that Dublin has not had the same rebuilding process as UK towns and cities, particularly those affected by the Blitz, so we cannot generally satisfy the requirements of UK retailers," says Mr Brennan. The southside of Dublin tends to provide sparse pickings in terms of large retail premises, while northside areas, such as Henry Street - which has also enjoyed a resurgence in the past year, enhanced by the arrival of the Jervis Centre - are generally more suited to larger retailers. "There's very little around and there has been very little available for some time," admits Mr Pearson.
"The prognosis for Wicklow Street and Anne Street is very good and Grafton Street is very healthy," concludes Mr McDonnell. "If anyone has a premises for sale, I'll take it off them today."
