With no replacement tenant found, the lack of interest in the high-profile former Habitat store off Grafton Street is a major setback for the city centre
THE KEYS of the former Habitat store near the bottom of Dublin’s Grafton Street are to be handed back to the owners after the receiver to the furniture group failed to sell the lease – despite intensive efforts over the past four months to find a replacement tenant.
This lack of interest in the high-profile store will be seen as a major setback for the city centre which is already troubled by a slowdown in retail sales because of the worsening economic situation.
Habitat, which experienced a severe fall in sales as a result of the slowdown in the new homes sector, originally hoped to get key money of €3 million for the spacious store and, when there were no takers, the company was put into voluntary liquidation.
Estate agent Garvan Walsh of Walsh Kelly then embarked on a new campaign to dispose of the lease and, though there was initial interest in it from a number of traders, including German discounter Lidl as well as American clothing giant Abercrombie Fitch and an overseas banking group, no firm offers emerged.
Lidl was apparently unwilling to pay either a reduced €2 million premium for the lease or the annual rent of €1.3 million. Its interest in a city centre location took the market by surprise because most of its stores are either in, or on the edge of, provincial towns or in less well off areas of cities.
Abercrombie had Dublin on its shopping list but after inspecting the Grafton Street area indicated that it would not be doing business because of the street’s poor image and disappointing mix of shops.
The approach from the bank also did not result in an offer as it coincided with the liquidity problems in the banking sector.
The Habitat receiver, George Maloney of accountants Baker Tilly Ryan Glennon, is now to return the keys to owners Paddy McKillen and Tony Leonard of Clarendon Properties which also owns the Powerscourt Town Centre.
The split-level former Habitat store has a retail area of 2,157sq m (23,217sq ft) and a further 1,094sq m (11,776sq ft) of storage space. Its dual frontage on to Suffolk Street and College Green would allow it to be broken into two separate stores if a tenant cannot be found for the present layout.
The key money sought for Habitat was considerably higher than the going rate in Grafton Street which is generally around €400,000 to €500,000. At least four leases are currently for sale on the street, including that of Warehouse at number 37 following its decision to relocate to a new retail complex under construction next to the Gaiety Centre on South King Street. Warehouse is looking for €400,000 for its store which has a retail area of 102sq m (1,100sq ft). Its rent stands at €368,000.
Also for sale at €500,000 is the lease of the Zerup shoe shop which may eventually be redeveloped if present efforts to sell the building are successful. The rent in this case is €336,000.
A short distance away, Lisney is quoting a rent of €520,000 for the former Jack’nJones shop which is available on a short lease of only four years and nine months.
At the bottom of Grafton Street, agent HWBC is set to be more successful with its campaign to let a former bank building owned by Irish Life Permanent. The agency is seeking a rent of €1 million for the redeveloped building which has been extended to 460sq m (almost 5,000sq ft) in a street where large floor plates are notoriously scarce.
