Penneys to pay €6m for Independent House

Thriving clothing retailer Primark is to strengthen its trading position in Dublin city centre by acquiring the disused Independent House on Middle Abbey Street. The retailer is understood to have agreed purchase terms at around €6 million for the 1920s building sold in an off-market deal in 2003 for €26 million.

Primark operates a large Penneys store on O'Connell Street which adjoins the rear of Independent House on Princes Street. There is a second, and larger, Penneys outlet on nearby Mary Street.

City planners will be hoping that a Penneys presence on Middle Abbey Street could lead to the rejuvenation of a street that had been expected to boom with the arrival of the Luas service but instead has attracted significantly fewer shoppers in recent years.

Independent House was to have formed part of the “Northern Quarter” retail district planned by Arnott’s before the department store was taken over by the banks in 2010.

Jonathan Preston of Savills, appointed asset manager of Independent House by receiver Kieran Wallace of KPMG, said yesterday he had no comment to make about any sale.

The five-storey building served as the HQ and printing works for INM up to 2003 when it was sold to a company headed by property developer Paddy Kelly and businessman Niall McFadden, a shareholder in Arnotts.

Although a company owned by Arnotts held 50.1 per cent of the voting rights in Independent House, the department store apparently treated the arrangement as a joint venture rather than a shareholding. Arnotts only recognised its share of income or expenditure attributable to the joint venture rather than having the asset on its books.

Otherwise, the acquisition was banked with Anglo Irish Bank on a "without recourse" basis with a view to the debt being paid down by the earnings and value being derived from the property as part of the Northern Quarter. That highly ambitious project with an estimated cost of €750 million has long since been abandoned and Arnotts is expected to be offered for sale shortly.

Separately, Arnotts spent around €100 million on acquiring all the properties on a 5.5-acre site from Henry Street to Middle Abbey Street and from the rear of Penneys on O’Connell Street to Liffey Street. An Bord Pleanála cleared the way for the Northern Quarter in July, 2008, and approved a 149-bed hotel on the site of Independent House. However, the board specified that all works to the block, a protected structure, “shall be carried out in accordance with best conservation practice” as detailed in the Department of the Environment’s guidelines.

An estate agent familiar with the 6,967sq m (75,000sq ft) building said that while the planners would want to retain the façade, the “collection” of rear buildings would probably be demolished to make way for new retail facilities.