Rents down on Grafton Street

A NEW study of Dublin’s Grafton Street has found that 16 shop units are currently vacant, equating to 2.8 per cent of the overall retail space on the street.

However, rents have fallen heavily from a peak Zone A rate of €9,687 to €10,764 per sq m (€900 to €1,000 per sq ft) in 2006/2007 to €4,305 to € 6,458 per sq m (€400 to €600 per sq ft) in the current market.

Savills’ latest research report, Retail Market in Minutes – Focus on Grafton Street, suggests that the outlook for the city’s principal high street remains positive with a number of retailers still keen to have a presence on the street.

Joan Henry, head of research at Savills, says the research shows that Grafton Street is withstanding the current tough economic climate well, with only 2.8 per cent of the total retail space vacant. This equates to just 9.9 per cent of the units on the street. However, there are a number of shops trading where the leases are still available and when these are taken into account the volume of vacant space drops to 7.9 per cent.

The two department stores, Brown Thomas and M&S, account for 45 per cent of all retail accommodation on the street and when excluded from the study the total amount of vacant space increases to 5 per cent but the number of individual units remains the same.

Of the 16 shops available to let on Grafton Street 12 have floor areas of less than 184sq m (1,981sq ft) available to them. Only one vacant shop has more than 464sq m (4,994sq ft) of floor space.

Larry Brennan, head of retail at Savills, said that a lack of larger stores was the only impediment to a number of big retailers moving into the street.

The Savills report noted that there are now only four individual traders in Grafton Street (Barnardos, RC McCormack Jewellers, Thomas Patrick Shoes and Loft Cafe) with the balance having more than one other business premises in Ireland or overseas.

Visitors to Grafton Street will be well aware of the high representation of of shops selling fashion and shoes. Once the two department stores are excluded, fashion and shoe retailers account for more than 54 per cent of the overall retail space. Jewellers occupy another 9 per cent of the space while mobile phone shops take up 8 per cent of the retail space.

The study also shows that yields which fell as low as 2.25 per cent during the 2006/2007 boom are now in the region of 6 to 6.5 per cent.

A lack of investment activity made it more difficult to predict future trends, the report said. The recent sale of the Boodles store at 71 Grafton Street for €8 million showed a net initial yield of around 6.30 per cent.