A 60 per cent increase will bring rents close to Blanchardstown Town Centre levels but below those at Liffey Valley, writes JACK FAGAN

ABOUT 100 of the 120 traders in Dundrum Town Centre in south Dublin are facing rent increases of up to 60 per cent when the first five-year review gets under way in the coming weeks.

The large scale complex – easily the most successful shopping precinct in the country – is understood to be producing an annual rent roll of close to €40 million.

The move to increase rents comes at a time when many high street traders in Dublin city centre are putting pressure on landlords to reduce rents because of a fall-off in consumer spending. Dundrum, however, continues to buck the trend by trading strongly and, unlike the city centre, has little difficulty in finding replacement tenants whenever a shop closes. The centre attracted 18 million shoppers last year, benefitting from its solid, middle class location.

Joint agents Savills and Bannon acting for the centre owners, Castlethorn Construction, have told the first batch of tenants that they will be seeking rent increases of up to 60 per cent, depending on the configuration of each store and its location in the centre. Zone A rents have generally been around €2,600 per sq m (€241.5 per sq ft) though many of the first lettings were at considerably lower figures.

If the management succeed in getting average increases of 60 per cent, the Zone A rate will rise to around €4,000 per sq m (€371.6 per sq ft) – roughly the same as in Blanchardstown Town Centre and below the €4,500 per sq m (€418 per sq ft) already being paid in Liffey Valley.

The average rent for a 185sq m (2,000sq ft) unit at Dundrum will be in the region of €350,000 per annum. The new rent level will be based on what some retailers are prepared to pay to get into the centre, according to a rent expert.

Dundrum’s success as a shopping and leisure destination stems from its exceptionally strong mix of tenants (many with just one store in the Republic), its 48 restaurants and cafés, and its cinema and theatre complex.

Anchor tenants, who normally pay less per sq m because they trade from large units, will also have to pay higher rents from January 1st last but it will be nothing like the 60 per cent rise being sought from other traders.

The House of Fraser is paying an annual rent of about €2.4 million for its 13,000sq m (140,000sq ft) store; Marks Spencer is probably paying around €2 million for 11,612sq m (125,000sq ft) while Penneys is thought to have a rent bill of about €1.5 million for its 5,574sq m (60,000sq ft) unit. Tesco owns its store which extends to 5,574sq m (60,000sq ft).

Other big occupiers include Harvey Nichols (3,251sq m or 35,000sq ft); Zara (2,322sq m or 25,000sq ft) and HM (1,672sq m or 18,000sq ft).