According to Grainne Rothery, the shopping heart of Dublin – Grafton Street – is out of spots.
The Dublin’s shopping heart – Grafton Street – is currently out of places for new retailer’s shops. This makes the city authorities think of the construction of new shopping spots around the street, and they are already being planned by the market.
Grafton Street has always been a favourite place for all the famous retailers entering Ireland, but nowadays the stakes are really high. As the report by Knight Frank says, there was a 25% rise of prices for renting spots in the A section during the last year, and now the cost is €6,500 per sq. m.
According to Lisa McGrane, the director of the JLL retail agency, the shops located farther from the core of the shopping centre of the city are going to pay about 60% of the overall cost.
Retailers & Other Stories and Victoria’s Secret secured reasonably large units — at about 1,000 sq m and 2,000 sq m respectively — but the street is generally short on larger units. No 72 Grafton Street, which is being renovated, is a notable exception, with a retail area of 866 sq m.
In most cases, retailers seeking larger box sizes have had to look further afield. For example, H&M and Zara occupy a South King Street development next to the Gaiety Theatre. H&M has a 2,300 sq m store, while Zara’s is 2,800 sq m.
H&M also has a 2,300 sq m premises in what was previously a National Irish Bank branch on College Green. Abercrombie & Fitch is a near neighbour on College Green, where it’s located in a 2,000 sq m unit that was also previously a bank. Superdry occupies a 1,200 sq m store immediately behind Abercrombie on Suffolk Street.
Retailers with smaller requirements have also been driving demand off Grafton Street. “There is a huge underlying market for smaller units in the 110 sq m range,” said Darragh Cronin of Savills.
Premium brands such as fashion retailer Joules and shoe shop Loake have opened on nearby Wicklow Street. “And a lot of other brands would like to locate there too,” said Cronin.
Cronin cautions that the configuration of the units on Wicklow Street, Exchequer Street and others off Grafton Street thoroughfares can be a problem for potential tenants. “Quite often units are advertised with 120 or 130 sq m, but that’s over multiple floors,” he said. “The space needs to be on one level at ground floor.”
Some brands don’t necessarily want to be on Grafton Street, said McGrane. “If they can be at the bottom end of Wicklow Street, opposite Hermes and other high end brands in Brown Thomas, it is an acceptable location,” she said. “There are some very nice brands there now like Louis Copeland, Joules, Kiehl’s (beauty products) and Camper (shoes and accessories).”
McGrane said a couple of units on Wicklow Street and Exchequer Street have changed hands recently, with premiums of about a year’s rent being paid.
With demand strong, the proposed redevelopment of Nassau House on the corner of Nassau Street and Dawson Street is keenly anticipated. Owner Meyer Bergman lodged a planning application at the end of September to demolish the building and replace it with a mixed-use office and retail scheme to include 7,728 sq m (gross floor area) of shopping space over three floors at lower ground, ground and first floor levels.
“That will be a significant addition to the retail landscape if it gets planning,” said Eoin Feeney, executive director — retail transactions at BNP Paribas. “There’s an opportunity for the Grafton Street prime retail sector to start stretching left towards Dawson Street.”
The development also presents an opportunity, he said, to create an upmarket destination along the lines of Regent Street in London. “Grafton Street is full of mass market retail,” he said. “The nearest thing to Regent Street in Dublin is probably Wicklow Street where there are some very nice brands. But the shops are just not big enough.
“Nassau Street is probably the only site that can deliver a significant volume of retail space in one go. And that would improve the rest of Dawson Street.”
Nearby the retail element of Green Reit’s One Molesworth Street, at 13-17 Dawson Street, is scheduled for delivery in the third quarter of 2017. The retail space, which runs over the lower ground and ground floors, is being offered as a single unit with more than 1,700 sq m of space or as two separate stores of equal similar size.
Niamh Sheahan, associate director, retail, at CBRE, the agent on the scheme, said the focus is on attracting high-end retail occupiers, including sports, homeware and fashion brands.
While the scheme is somewhat isolated from the main retail area, Sheahan stressed that it is just 130 metres from Grafton Street. “There’s evidence of other MSU [medium-sized unit] occupiers trading off Grafton Street that are performing exceptionally well,” she said. “For example, H&M and Abercrombie & Fitch on College Green and Topshop on St Stephen’s Green.
“This is closer than some of the other MSUs, like H&M. We haven’t had high-profile retailers on Dawson Street in the past because the right opportunities haven’t been available for them.”
Cronin said a homeware or fashion brand or a mixed department store could change the dynamic of the street. Aiden McDonnell, associate director, head of retail at Colliers, believes larger stores on the street will be in demand.
“With increased online retailing, we’re going to see retailers having 20 branches instead of 200 branches, but they’re all going to be flagship stores,” he said. “They can’t go into Wicklow Street and Clarendon Street and Drury Street. The only possibilities for bigger store spaces are in Nassau Street and Dawson Street and those environs.”
On Chatham Street, on the opposite flank of Grafton Street, Lone Star is understood to be appealing against An Bord Pleanala’s decision to overturn the planning for a mixed-use scheme, including 2,880 sq m of retail and office space.
The scheme backs onto its existing South King Street development. Cronin said the development would be a huge add-on to the retail aspect of the area, benefiting other units.
Friends First recently agreed to buy the nearby Madrid portfolio, which was assembled by Bernard McNamara and includes nine units in and around South William Street and Clarendon Street. Head of property at Friends First, Claire Solon, has said that part of the fund’s investment strategy is to look at redevelopment opportunities and refurbishment projects.
At the Trinity College end of Grafton Street, Irish Life has secured planning permission to demolish office buildings behind Nos 112 and 113, to build new retail accommodation in their place and to renovate the original buildings at the front.
“New market entrants will start coming more and more into the market where they can get units that have very strong footfall — maybe not as much as Grafton, but quite often at far more discounted rental levels,” said Cronin.
“For the first time in a long time, we’re seeing proper, more quality premium offers going off Grafton Street and not just a mixed bag of retail of varying quality.”