Department store on the cards for city centre corner site

RetailSector With the Hibernian Group moving to a new HQ, its offices at the corner of Nassau and Dawson streets could be redeveloped, writes Gretchen Friemann

A substantial slice of property at the corner of Dublin's Nassau and Dawson streets could be redeveloped into a department store within the next few years following the Hibernian Group's decision to relocate its headquarters to Park Place.

The insurance, life and pensions company is understood to be in talks with a number of developers about the future of the city centre site which will become largely vacant when Hibernian consolidates its operations at a newly constructed office scheme at Upper Hatch Street in November.

Currently the three buildings on the Dawson and Nassau street corner house 15 separate retail outlets on the ground floor, including House of Ireland, Oasis, Harriet's House and the Lemon creperie.

As all of the retail tenants are on multi-year leases, any move to convert the property into a department store would involve complicated negotiations and a series of potentially expensive lease buy-outs.

However, sources close to the company claim Hibernian is seriously considering the department store proposal and would prefer to redevelop the site rather than sell it on to a syndicate or developer.

Typically, institutions prefer to hold high-yielding property and normally dispose of buildings that are ripe for redevelopment.

But the shortage of good investment stock in the market means Hibernian would have little chance of replacing the city centre property with a comparable acquisition.

One source suggested the company could negotiate a land swap with a property developer but it's understood the untapped value of the three buildings opposite Trinity College has persuaded the institution to hang onto the property.

Hibernian occupies 4,645sq m (50,000sq ft) of the 7,432sq m (80,000sq ft) site and, as it owns the three blocks outright, it will not be under any pressure to conclude a deal.

It's understood the company is also assessing whether a department store would maximise the rental income from the property.

Over the past few years a number of department store retailers, such as John Lewis, have been looking to open in Dublin city centre but have been unsuccessful due to the lack of suitable sites between Grafton Street and Henry Street.

While a development in the tourist heart of the city would be in demand, some sources claim a higher yield could be achieved through a multi-tenant scheme, such as an arcade or shopping centre.

In addition to the 7,432sq m (80,000sq ft) land bank on Dawson and Nassau streets, Hibernian also owns and occupies two office blocks on Haddington Road, totalling 6,968sq m (75,000sq ft).

The company will also have to decide whether to sell or relet the two buildings when it moves to its new 18,581sq m (200,000sq ft) headquarters at Park Place in November.